*Reduced 9/15/21 – Asking Price: $700,000*
The seller would like to take advantage of another business opportunity. His remodeling business continues to burst at the seams with new business but he is burning out. This is why he is willing to offer the business for less than 2x cash flow.
*Seller Financing Available! Seller is Motivated!*
Founded in 1996, the Company serves Southeast Michigan, offering services ranging from small to large additions, whole house remodels, kitchens, baths, basements, porches, decks, and even historic preservation.
The Company is certified by the EPA as a Lead-Safe Certified Firm, while several of the staff have completed the Certified Renovator training course. The Company boasts a vast portfolio of completed projects and raving customer testimonials. The Company’s remodeling craftsmanship extends beyond aesthetic improvements, expanding into improvements in design to optimize structure and functionality.
The Company maintains strong relationships with subcontractors. The Company works with 38 separate subcontractors and maintains over 13 separate relationships that have lasted at least 15 years each.
The Company’s constant top objective is and has always been quality—whether it comes to employees, subcontractors, suppliers, or products. They offer a three-year warranty to back this mission. The Company’s subcontractors will not install a product they know will not last for years to come.
The facilities include two buildings totaling 5,247 square feet in space. The office building was built in the 1950s and includes 2,047 square feet of space with 9-foot ceilings. The warehouse building was constructed in the early 2000s and features 3,200 square feet of space with 14-foot ceilings. The Company is located on a busy thoroughfare and has excellent visibility. The buildings are in excellent condition with an estimated value of $600,000 (this value would need to be validated by an updated real estate appraisal in due diligence). The Owner is flexible to sell or lease the facilities to new ownership.
Real Estate: Owned—5,247 total square foot facilities in a high-traffic area. The Owner is flexible to sell or lease the facilities to the new owner(s).
2020 Rent: $66,000
Total Building Size: 5,247 square feet between two buildings. The office building contains 2,047 square feet of space, and the warehouse building contains 3,200 square feet of space.
Facilities: Two buildings total 5,247 square feet. The office building was built in the 1950s and includes 2,047 square feet of space with 9-foot ceilings. The warehouse building was constructed in the early 2000s and includes 3,200 square feet of space with 14-foot ceilings. The warehouse features 5 drive-in doors. The buildings are in great condition.
Seller Financing Available: Yes
Seller Note: Limited Seller-Financing Available for Qualified Buyers.
Number of Employees: 3 Salaried, 4 Hourly
Year Established: 1996
Support/Training: Ownership is willing to provide reasonable and customary transition assistance.
Reasons for Selling: The Owner would like to retire.
(1) Established Brand in a Fragmented Market: The Company operates in a community-oriented area, where residents prefer to spend locally. Within the remodeling industry in this area, residents have limited options. Customers can choose a small one- or two-person specialized local crew to complete the job or go with a larger, less specialized, and non-local company. Few companies are operating in the middle ground where customers are looking for mid-sized operators who offer a variety of services and are locally based. The Company is one of these few companies operating in this middle ground. Most competitors in the area are small crews specialized in one or a few services, whether that be kitchens and bathrooms, roofing and windows, decking, etc. The Company can provide the same quality as a specialized shop while offering a vast array of services.
(2) Consistent Repeat Customers: The Company consistently drives 30% of revenue from repeat customers. This is due to the Company’s established reputation for quality products and professional service, as well as the wide variety of interior and exterior service offerings. A customer who hires the Company for one service, such as a kitchen remodel, and is happy with the finished product, is very likely to return when they need a new deck or addition to their home. The remodeling industry displays high levels of relationship-based selling. The Company thrives off of established relationships.
(3) Sophisticated Marketing Efforts: The Company orchestrates a sophisticated and effective marketing strategy for a business in the remodeling industry. The Company uses a combined effort of events, Internet marketing, print, radio, referrals, signs, trucks, television, etc., to drive additional revenue for the Business. While many competitors are focused on dated marketing efforts, the Company has adapted well to new trends.
(1) Hire a Superintendent: The current Owner of the Business is operating as the Company’s Superintendent. He oversees the remodeling process from planning to completion. This is a very time-consuming role, and the new owner(s) could benefit by offloading this work to a newly hired Superintendent. A qualified Superintendent could take away a significant time requirement from new ownership and free up time to focus on higher-level and strategic business decisions.
(2) Hire Two Salespeople: In addition to operating as the Company’s Superintendent, the Owner is also the only salesperson on the team. These are roles that warrant at least two full-time employees. Being split between these roles, the Owner has not been able to dedicate the time to each position that they deserve. If the new owner(s) were to hire two salespeople, this could free up much of their time to focus on higher-level business decisions and transition into the role of President/CEO. The lack of a dedicated salesperson impacted the Company in 2020. All marketing efforts were shut down in June 2020 due to COVID-19, and without a full-time salesperson, the Company could not drive enough business to match the revenue of previous years. This could be correctable with the hiring of salespeople in addition to boosting marketing efforts. With the addition of a Superintendent and two salespeople, the Owner estimates the Company could return to and exceed $3.5M-4.0M in revenue.
(3) Implement Technology and Software: Since its founding in 1996, the Company has continually sourced new products to ensure the highest quality for its customers. One area the Company has not been on the cutting edge of is the implementation of technology. The Owner notes that this is primarily due to his personality and lack of desire to deal with new technology. Software such as Builder Trend and Houzz Pro are examples of project management software platforms built for the construction and remodeling industries. The addition of one of these project management software packages could significantly reduce the time required for tasks, including job bidding, billing, budgeting, scheduling, etc. Additionally, the Company could benefit from updated marketing methods. Expanding into social media and running aggressive ad campaigns could drive additional business to the Company.
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