This industrial distribution and sorting enterprise is comprised of three separate companies headquartered in West Michigan. The Owner founded The Companies in 2007 with the vision of creating a better industrial distribution company. The three businesses feed to each other, as they have a one-stop-shop structure, allowing customers to buy general or customized products, and take advantage of sorting, quality, and inspection services all in the same place.
Company A is a Maintenance and Repair Overhaul (MRO) industrial distribution company. Company B is an industrial manufacturing distributor of specialty engineered components to meet specific customers’ needs. Company C is an industrial sorting, quality, and inspection company. The Companies are highlighted by the team’s expertise and experience within the industry, exceptional customer service, and long-lasting relationships with suppliers that can be passed on to new ownership.
The Companies have a diverse customer base across automotive, office furniture, construction equipment, contract manufacturing, metal fabrication, tool & die shops, individual customers, and other fastener companies. With a proper sales force, updated websites, and the remaining open capacity, The Companies could easily produce $5M in sales this year and $10M in five years through Company A alone.
After nearly 15 years of ownership, the Owner is ready to transition into the next phase of his life. He is open to the idea of staying on as a salesperson and assisting The Companies with the transition process. He is confident that The Companies could run smoothly with the Companies’ key managers at the helm. To maintain current Business performance, the new owner(s) could work 15 hours per week in a semi-passive role, allowing the Operations Manager to run The Companies. The new owner(s) could also be more heavily involved, working hand in hand with the Operations Manager to grow the Business through an improved sales force and marketing strategy.
Buyers will be required to have a minimum of $300,000, solid credit, and industry or related experience to qualify for SBA 7a financing.
2019 EBITDA: $662,887
2019 Inventory: $535,582
Real Estate: The Owner owns the Companies’ four buildings through two related real estate holding entities.
Rent: The Companies paid a $96,469 rent expense in 2019.
Total Building Size: The Companies’ four buildings comprise approximately 21,200 total square feet with 1,450 square feet of office space.
Seller Financing Available: Yes
Seller Note: Limited Seller-Financing Available for Qualified Buyers.
Number of Employees: 16
Year Established: 2007
Facilities: The Companies’ four buildings comprise approximately 21,200 total square feet with 1,450 square feet of office space. The Owner owns the buildings through two related real estate holding entities.
Support/Training: The Owner is willing to assist the new owner(s) with transitional matters. The Owner is also open to the idea of staying on as a salesperson.
Reasons for Selling: The Owner would like to retire and spend more time with family.
One-Stop-Shop: The Companies supply general products, customized products, and sorting, quality, and inspection services for customers all in the same location. This is not customary within the industrial manufacturing and distribution industry. The ability to handle all the customers’ needs in a one-stop-shop fashion provides current customers and potential customers even more reason to choose The Companies.
Competitive Advantage: As opposed to national suppliers, Company A can quickly and more personably react to customers’ needs given that it is a privately-held company that is more flexible and responsive than other corporate-owned companies. These corporate-owned companies do not have the product expertise or the geographical proximity to the customers that Company A has, making it easier to stay connected with customers and build upon an already excellent word-of-mouth presence.
The Ability to Cater to Specific Customer Needs: Customers can go directly to Company B with any problems/tasks/inquiries, and Company B will provide a solution. The expertise and ability to take on challenging tasks have won the business of reputable and well-known customers such as Toyota and Honda.
Robust Machinery and Simple Solution: Company C has original machines created by the Owner that provide a sorting solution to inspect and confirm products’ quality. It is a simple solution for customers to work with Company C rather than other companies dealing with the complicated problem of developing an internal quality/inspection process. Most companies would instead outsource the quality, inspection, and sorting process.
Outstanding Reputation and Relationships: The Companies have an exceptional reputation in Michigan, and the Owner has built longstanding relationships with customers and vendors – giving the new owner(s) stability and confidence:
- Customer Service and Trust: Customers trust and appreciate The Companies’ top-tier customer service. They would rather work with the Companies’ as opposed to the big players in the industry.
- Parts Per Million (PPM): The Companies’ have achieved one of the industry’s premier rankings for Parts Per Million (PPM) at 0 PPM – a measure for how many defective parts per one million parts distributed. ISO audits have been perfect to nearly unbelievable standards.
- Easy to Operate: Company B and Company C run itself for the most part. The Companies’ Operations Manager runs The Companies for the current Owner. The Operations Manager is seasoned, knows/understands the Business and industry, and is an excellent supervisor.
- Supplier Relations: The current Owner has formed excellent relationships with suppliers. He can pass on all the supplier relationships he has built, information, and details to the new owner(s)
Supplement Management: The Companies lack a robust management team concentrated on growing sales. The Owner focuses all his time and energy on The Companies’ administrative work. If The Companies can find an experienced owner that is goal-oriented and willing to oversee the operations, they could see a 20% to 50% increase in sales. This correlates with implementing a greater sales force presence and marketing strategy. The Owner is ready for retirement and does not have the energy to aggressively grow The Companies; therefore, he has not pushed for rapid growth.
Update Websites for the Three Companies: The Companies are currently lacking an online presence. Company A is the only one of the three companies that has established a professional and effective website to draw and attract customers’ attention, but this website could use an update. By creating a greater online presence, The Companies could draw more traffic and increase their outreach.
Implement a Sales Team & Marketing Strategy: In addition to updated web presence, The Companies can reap many benefits from adding a greater sales force to the team, such as accelerated growth and increased market outreach. The Companies have maintained steady business strictly through word-of-mouth, showing that their services are reputable and can sell themselves. Adding a sales force and marketing strategy could significantly enhance sales and accelerate the rate at which The Companies grow.
Vending Machines: The Companies could reduce costs while creating more “accountability” for maintenance, repair, and operations (MRO) product inventory by utilizing vending machines. Rather than just stocking shelves and allowing employees to retrieve and manage their use of tools, fittings, personal protective equipment, and other MRO goods, The Companies could use these vending machines to stock, dispense, and track these items to decrease costs.
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