This profitable Company is a reputable electrical contractor offering diverse services, including industrial, commercial, and residential work, maintenance support, utility contracting, and substation work. The Company’s day-to-day operations are 75% bid work and 25% time and material jobs (small projects to troubleshooting calls) from long-term customers and general contractors.
The Company is overseen by the 100% owner. The shop foreman and office manager handle most of the day-to-day operations. The owner works, on average, 30 hours per week, with his most valuable role being quoting large projects. The owner shows up to work every day because he enjoys the work; however, being physically present at the facility is not necessary to effectively run the Business. Over the last three to four years, the owner has taken more time off and away from the office while giving more responsibility to the managers and employees. Over the last few years, the owner has taken 6 to 10 weeks of vacation per year.
The shop foreman and office manager are excellent managers. The shop foreman and owner have a longstanding relationship (20 years), and the owner has groomed the shop foreman to manage the Company effectively. The owner is confident that a new owner could work 10 to 15 hours per week while maintaining the same market share due to the Company’s outstanding managers. The owner is turning 50 this year, and he would like to relocate to Key West, Florida. The owner is willing to stay on to help transition the Business to a new owner.
Buyers will be required to have a minimum of $100,000, solid credit, and preferably industry experience to qualify for SBA 7a financing.
Real Estate: Owned – The owner owns the Company’s facility, and he is open to selling or leasing the building.
Total Building Size: The building was originally built in 1984 and the owner added another 4,000 square feet of warehouse space in 2019 to the original 6,800 square foot building. The building’s total size is now 10,800 square feet. The facility has 1,800 square feet of office space with a men’s and women’s restroom, two offices, and one 400 square foot open office. There is another restroom for employees, break room, and kitchenette in the back part of the office.
Number of Employees: 8 employees
Year Established: 2002
Facilities: The owner owns the Company’s facility (10,800 square feet).
Support/Training: Ownership is willing to provide reasonable and customary transition assistance.
Reasons for Selling: The owner would like to move to Florida and start another business. He has been in the electrical industry for 31 years, and he is ready to take a step back.
(1) Skilled Management Team Allows For Semi-Passive Owner Involvement: The owner has an exceptional shop foreman and office manager who oversee the Company’s day-to-day operations with the owner’s support. Over the last couple of years, the owner has taken off about 6 to 10 weeks per year. The owner has complete confidence in the current managers’ abilities to run the Company, and he believes that a new owner could operate in a semi-passive role if he/she desired.
(2) Diversified Service Capabilities and End Markets: Unlike most electrical contractors in the area, the Company can do residential, commercial, and industrial work. The Company has the in-house capabilities for bucket truck work, trenching, bending conduit up to 4-inch rigid, and many other services. Not many electrical contractors have all these capabilities. In addition to its diverse service capabilities, the Company is comfortable working on any projects, whether its banks, healthcare buildings – hospitals, schools, houses, retail, hotels, industrial facilities, or commercial buildings. This gives contractors the confidence that the Company will deliver on any project, thus allowing the Company to be competitive on almost every bid.
(3) Strong Employee Morale and Stability: The Company has done an excellent job retaining its key employees in a tough labor market. The shop foreman started working for the owner as an apprentice at the age of 18 before the Company was established. 22 years later, the shop foreman is still working alongside the owner – leading the team and day-to-day operations of the Company. Although the Company is affected by the tough electrician labor market, especially amongst the current economic/environment conditions, the Company has employed and retained exceptional teams because of its training and benefits programs. The Company provides training for its electricians through the local college, where all apprentices are enrolled in the electrical program. The Company pays for all the apprentices’ classes. In addition to training, the Company provides exceptional benefits compared to other electrical contractors in the area. The Company offers medical, dental, vision, HSA, retirement IRA with 3% matching, holiday pay, and vacation pay. It is these benefits and training programs that have attracted and retained skilled electricians and managers over the years, further solidifying the Company’s reputation as a go-to electrical contractor in the area.
(4) Longstanding Reputation Amongst Customers: The Company was established in 2002 and was built from the ground up on the principles of honesty and integrity. The Company follows through on each task it agrees to with the customer. If the owner says he will do a job for a certain price, then the Company will follow through with excellent work at the quoted price. The owner believes he built this business from nothing to what it is today solely on his electrical abilities and treating customers fairly and honestly. All customers give the owner and Company the same feedback, “the Company does a great job for the price they said. The owner is an honest business owner and will always look out for the customers’ best interest even if it means making less money doing so”. There are a few reasons why customers use this Company instead of other electrical contractors, and it is not always price. The Company’s goal is to make all general contractors look good as far as electrical tasks and services are concerned.
(1) Add Full-Time Estimator and Journeyman Electrician: Adding a full-time estimator could double sales for the Company over the next couple of years. The owner currently turns down many bids, mainly because he and the shop foreman do not have the capacity to handle all the bid work. The owner does minimal bid work (only large projects), and the shop foreman is only doing estimating on a part-time basis. If a full-time estimator were brought in to focus on estimating and submitting bids entirely, the Company could grow significantly through these efforts. Additionally, if the Company were to bring on a full-time estimator, a journeyman electrician would need to be a simultaneous hire. If a full-time estimator is bringing in double the amount of leads, the Company will require a journeyman electrician to help service the projects that are won. The Company has many reliable apprentices, and two will be a journeyman in a year. Apprentices are easy to come by; however, the Company needs a journeyman electrician to teach the apprentices and take the lead on complex projects. It would be beneficial if the Company hired a journeyman electrician from another district/region such as Grand Rapids because their relationships could be used to increase projects, opportunities, and referrals.
(2) Implement a Dedicated Salesforce and Marketing Strategy: The Company does not have a salesforce, nor does the Company spend money on marketing. Although the Company has developed a solid reputation and revenue stream through referral business, the Company could benefit from hiring on a salesperson or developing a relationship with a sales representative. The Company could also form a website (the Company currently does not have one) or market the Business name better with local organizations, such as Associated Builders and Contractors and other organizations. Additionally, if the Company wanted to expand into other areas such as Grand Rapids, Holland, Grand Haven, and Kalamazoo, the Company could implement target marketing initiatives to expand the Company’s geographic presence.
(3) Unparalleled Facility Capacity with Substantial Tools and Equipment Portfolio: The Company’s facility and tools/equipment portfolio is outstanding compared to most other electrical contractors. The Company’s facility compares with a majority of the largest electrical contractors in Michigan, let alone the local area. The Company’s 10,800 square foot facility is estimated to have a value of $630,000. Additionally, the Company has the equipment and tools to handle any job that comes its way. The Company’s current facility and equipment could handle $10M in sales per year; it could easily be $5M without additional marketing or salesforce. The reason that it has not increased to this level is primarily due to the owner being content with $2M in sales per year. He is satisfied with how the business has developed. However, if a new owner is eager to grow the Company within the first couple of years, the Company’s equipment and facility have enough capacity to take on additional work and increase revenue. Personnel would be the one constraint to address, but the facility capacity and equipment already in place provide significant catalysts for growth in the near future.
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