8502 Building Services Company for Sale

Price: $2,099,000

Location: San Jose, CA

Industry: Building Maintenance Services

Listing ID: 8502

Listing Description

The Company provides specialty cleaning services to most types of commercial buildings, residential buildings and homes:  window cleaning, gutter cleaning, pressure washing and awning washing.  Window cleaning is limited to 4 stories – the Company does not do high rise buildings.  75% of revenues are from commercial and residential buildings, while 25% are from residential homes.  Roughly 60% of revenues are from window cleaning, 25% gutter cleaning and 15% pressure washing and awning washing.   The Company has 7 crews, each with a supervisor who reports to the owner.  The Company has an exceptionally good safety record, earning it a low mod factor and reduced worker’s comp insurance premims.

The business was founded in 1990 by the present owner, who has organized and developed the business infrastructure so that any good business person can manage it.  In August, 2015,  the Company acquired the assets of another similar business and still gets business from that website, phone number and customer base.  This helped revenues grow by $268,000 from 2015 to 2016 with an increase in SDE from $560,000 to $757,000.  The owner forecasts 2017 business performance to be better than 2016 due to implementation of a price increase and continued strong demand from new and existing customers.

The Company operates from an office building with a fenced, paved parking lot for all the vehicles, a large garage for storage and a small storage shed.  The business owner is the landlord and will make a new long-term lease with the business buyer.

The business earnings have enabled the owner to acquire sufficient real estate investments and other assets that he desires to sell the business and retire.  He has an active personal life, coaching volleyball and basketball.

8502 Overview V1.3 6-12-17

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Listing Details

Down Payment: $524,750

Total Sales: $1,912,994

Cash Flow: $757,424

EBIT: $586,768

EBITDA: $596,924

Accounts Receivable: $75,000

FFE: $80,000 (Included in Price)

Inventory: $2,000 (Included in Price)

Lender Pre-Qualified?: Yes

Terms and Conditions?:

Seller desires all cash. This business is preapproved by 7 SBA lenders for an all cash transaction with 25% down.

Reason For Sale:

Retirement

Training & Support:

4 weeks at 10 hours per week

Operation

Year Established: 1990

Year of Last Acquisition: 1990

Days & Hours of Operation: 7:00 to 3:00 M-F for cleaning crews; 8:00 to 4:00 for office

Owner Hours Per Week: 45

Non-Owner Payroll: $744,148

Employees: 22 FT, 1 PT

Managers: owner

Location

Security on Lease: 4000

Monthly Rent: 4000

Square Footage: 1459 office + 400 garage + 112 shed + large basement

Facilities Information:

Business occupies ground floor of 2-story building. Upstairs is a residential occupied by a tenant. There is a separate entrance for the tenant and utilities are on separate meters. The property has a large paved, fenced parking lot for all the trucks, There is a 400 square foot garage, a 112 square foot storage shed and a large basement for storing equipment and supplies.

The business owner owns the real property and is offering a new 5-year lease at $4,000 per month plus tenant's share of real property taxes and insurance; tenant to be responsible to maintain the property. $4,000 security deposit.

Summary

Historical Summary:

Present owner founded the business in August, 1990, and built it up to its present level.  He purchased the building in 1999 and moved the business to its present location.

Owner Qualifications:

New owner does not need special skills or knowledge except for general business management and supervision skills.

Competition:

This is a highly fragmented market in which most competitors are “mom & pop” – very small.  They are not able to qualify to do work on larger multifamily or office properties because they don’t have the experienced manpower, reputation or insurance to qualify.  There are a few very large, national competitors, but they focus on high rise class A buildings and don’t go after the size and type properties served by this business.  The company has many customers that are property management companies for multifamily and residential complexes; some have been clients for 10 to 20 years.  The company has hundreds of customers, some of which are single family homeowners.

Potential Growth:

The downtown San Jose area is poised for adding 8,000 residences and over 6 million square feet of office space over the next several years.  There are many growth initiatives that could accellerate the growth of this company including active marketing such as direct mail, telemarketing, digital marketing, social network marketing, telemarketing, referral network development, upgraded and optimized website, home improvement trade shows.  The present oowner has no active marketing programs because he has been very satisfied with organic growth over the past years, which has been impressive.

Financing/Terms:

PRICE   TERMS 
Asking$2,099,000  SBA Loan$1,574,250
Down Payment$524,750  Term10 years
Inventory Included$2,000  InterestPrime + 2.75%
Other Debtnone  Payment17,477.40

Final terms may vary according to the SBA lender and the final purchase price.