Two Ways To Operate: Occupational or Managerial
It’s rare to find a good profitable business in the $200,000 price range. To find one that requires only a part-time commitment and with immediate expansion potential is even rarer.
This business has been conducted more like an occupation, due to the nationwide travel preferences of the owner. He and his wife love to travel in their RV, so it was a natural to tie that to making good money by working weekends during their trips.
Now that they are ready to retire, it has become clear that not every business buyer is as interested in traveling as they are. True, the business will work that way, but what if the buyer has a family and prefers not to travel for months at a time?
That’s why we have looked hard at whether this business could be re-configured so the work would be done by a technician while the owner stays at home. It turned out that, not only could it be reconfigured, but the scheduled profits were higher this way! We’re calling this the “Management Model” vs. the historical “Occupational Model.”
This business is priced according to its historical cash flow, but it is being presented as an opportunity to realistically increase the cash flow (by a forecasted 46%) using the same sales revenue inputs. The pricing model shows a business value that is potentially worth $86,000 more than when it is priced under the Occupational model as it is now.
The only change would be that the jobs are done by a technician traveling to the work sites by air and rental car, not by the owner working out of an RV for weeks and months at a time. This approach has the further advantage of allowing time for the new owner to do marketing to further expand the operation (say to two technicians, etc.)
If the buyer wants to travel instead of hiring a technician, no problem. The Management Model calls for a 4-day work week including travel. Doing this would put another $1200 per job in the buyer’s pocket. Historically, the company has been doing approximately 15 jobs per year.
The jobs are typically done on weekends, so you can see that this operation has been running at only about 30% of what would be considered “full-time.” If you take another look at the cash flow, I think you’ll agree that it is substantial for the amount of time spent per year. And that is based on the “Occupational Model.” The “Management Model” is even better.
Here’s the story, one you have not likely ever heard:
Sawmill carriages run on tracks, and the tracks get out of alignment. This is a huge problem for them, and a big opportunity for you!
There are sawmills in every region, softwood and hardwood, all over the country. Over time, their carriage rails become worn by constant use and they get to where the saws can’t cut straight any longer. Consequently, most of them are potential clients.
When they reach the point that they can’t meet critical market accuracy requirements, the sawmill must either replace the carriage rails (at great capital cost and with substantial down-time), or they can call this company: a leading U.S. specialist in carriage rail realignment.
Using precise laser leveling equipment, this expert carriage rail alignment service saves its customers many tens of thousands of dollars (and earns many thousands of dollars for about a weekend of work!) Not a bad trade-off, and as a result this business has been growing steadily for years.
But now it’s time for real retirement. The owners have enjoyed their “Tours of America” for the last 16 years, and they are now planning a quieter pace of life at their home in Oregon.
There is no problem with the business; it continues to grow year after year, driven by its good performance, top reputation, and word of mouth advertising. It’s just that the owners have reached a certain age, and it’s time to turn this gem over to the next generation.
All of the specialized leveling equipment is included, and the owners will train the buyer over several projects (first by showing, then by supervising, then by consulting as needed.)
The buyer will need to be comfortable with mechanical processes, but the strong transition support program will take care of getting them up to speed quickly.
Included in asking price.
The only facility required is a small storage shed for the rail alignment equipment. (Home Based)
When a broker hears, “There isn’t any competition”, that raises a red flag. If no one else is doing this type of service, is it because there isn’t much demand? In this case, it appears that there really isn’t anyone else doing this service, but there is plenty of demand. The owner routinely turns work away because he is as busy as he wants to be.
Growth & Expansion:
The potential for expansion is tremendous. The demand is there, and there is even international demand. Expanding would entail either working more days per year, or hiring, training, and equipping employees or subcontractors.
Support & Training:
The owner will demonstrate how to operate the equipment on two jobs. Then he will observe and guide the buyer in the operation of the equipment on two more jobs. Each job is performed over a weekend, at the client’s location. Afterward, the owner will be available for consultation by phone and email.He will also be available for continuing on-site training if requested, at a consulting rate to be negotiated.
Reason for Selling:
This business is Home-Based
Licensed in Oregon