2015 Will Cash Flow Over $950K on $5.5MM in Sales. Assets Worth $2.8M

Denver, CO (Denver County)

Seller Financing Available
2015 Will Cash Flow Over $950K on $5.5MM in Sales. Assets Worth $2.8M

Asking Price:$1,400,000

Cash Flow:$950,000

Gross Revenue:$5,500,000

EBITDA:$950,000

FF&E:$350,000

Inventory:$985,000

Real Estate:$950,000

Established:2006

2015 Will Cash Flow Over $950K on $5.5MM in Sales. Assets Worth $2.8M

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Business Description

RV and Trailer Sales Co. Includes $2.5MM in Real Estate/Assets

2015 Cash flows is projected to be over $950,000 on $5,500,000 - $6,000,000 in sales. In fact, we cash flowed $538,750 on $3,108,083 in sale through June 1, 2015 and we had the worst weather in 30 years over the past 3-4 months. Therefore, we expect a stronger second half the year than the first half.

Terms: Seller seeks $1.4MM Down at closing and will Carry another $500K over the next 5 years and will consider an earn-out on this money. RV and Trailer Sales and Service "including" 10.1 Acres of Real Estate and almost 4,000 SF of new construction on all buildings
- Since 2006

2014 Cash Flow with perks and add-backs was $763,098 on 1,902,184 in sales.

2013 Cash Flow with perks and add-backs was $459,454 on 1,061,574 in sales.

2012 Cash Flow with perks and add-backs was $316,100 on $989,106 in sales.

Sales Price for all Real Estate, Business Operations and Assets:
$1,900,000

The seller seeks at least $1,400,000 down at closing and the buyer will step into $2,835,000 in real estate, assets, equipment and inventory. However, the buyer will assume approx. $1,200,000 in floor plans, payables and equipment debt. This equals about $1,640,000 in net asset value for just $1,200,000 down at closing.

Seller will carry up to 35% for a qualified buyer signing a promissory note.
This deal will easily finance through the SBA, but the buyer will need put down at least $300,000 of their "own" money.

After 8 years in business, BBB Accredited and “A+” rated. We have "0" unresolved complaints. Grew over 250% in past year, in Gross Sales and Cash Flow. We are a leader in our 8 year history and the second largest and trailer sales and service companies in our market.

The new owner need NO industry or technical experience, but should have a solid business, sales and marketing mind and be committed to work.

As stated above, we cash flowed $538,750 on $3,108,083 in sale through June 1, 2015 and we had the worst weather in 30 years over the past 3-4 months. Therefore, we expect a stronger second half the year than the first half.

Seller will carry up to 35% for a qualified buyer signing a promissory note. This deal will easily finance through the SBA, but the buyer will need put down at least $400,000 of their "own" money.

Please email info@companybroker.com or call Paul at 303-382-1900 for a comprehensive sales packet with the past 3 years of financials and tax returns, and a detailed 40 minutes video interview with the owner and a full site walk-through. We can immediately email the sales packet.

It is Critical to Understand, the seller's weak financial situation (and banks' tight credit lending) has been the “bottle neck” of the business in the past 7-8 years. More specially, until May 2014 we have operated and sold new trailers and used RVs "without" a floor plan to buy inventory on. Until this date we were shackled with a maximum of $70,000 that a bank would loan us to buy inventory with. As they say, "you can't sell form an empty trailer". Well, that is what we did for the first 7 years of operation, just had a $70,000 credit line and the few dollars we had to use to buy inventory. In the middle of 2014 a bank finally granted us a $900,000 floor plan. As a result we were able to substantially and immediately increase the amount of inventory we could offer and sell to customers. We have always held a LOW DEBT and have the lowest overhead structure possible. Our "Achilles heel" has always been lack of money/working capital. We have never had enough working capital to maintain the inventory needed to offer our clients all the choices we know they want to see.

In short, this was the sole reason we have NOT been able to grow much over the years and have been stuck at under $2,000,000 in gross sales throughout our history. This is also the reason that we have finally exploded in 2015 and will absolutely cash flow over $800,000 on close to $6,000,000 this year. A chain is as strong as its weakest link, and NOT having capital or credit to obtain a sizable floor plan has always been our Achilles heel. Even today (mid 2015) we are still limited on our 3 floor plans totaling just $900,000. A new owner with more established credit and a higher net worth could immediately approach a bank to get $500,000-$600,000 in additional floor plan credit. This extra $600,000 would allow the new owner to carry much-needed additional inventory to sell to people who come looking to buy items will simply don't have on the lot. Again, we have only 120 trailers in inventory and we sell that number almost every month. If we could get 250 trailers on the lot, we would sell much more. The same holds true with used RVs, we simply do not carry enough inventory here. We could sell 2-3 X's what we are now selling IF we could get the additional credit to inventory it. To summarize, the seller is 100% confident that if he had about $1,500,000 in floor plan credit at the start of 2016, he could gross over $10,000,000 in sales and cash flow well-over $2,500,000 since we could buy the units at a cheaper price since we be a bigger buyer at that point.

Why Seller is Selling? This is a really great question since the business has grown explosively for the past 2-3 years, and especially during the last 12 months. Why would anyone sell, knowing they will cash flow over $800,000 for the first time ever? Well, first of all the seller is going to get a great paycheck for the past after just 8 years of building it. Secondly, he and his wife are having their first child in less than 30 days and they want to move back to Michigan, where they move form 8 years ago, and want to move back to their family. That is the main reason.

We Provide Sales AND Excellent Service: over 50% of our Front Range competition sells what we sell, but does NOT PROVIDE SERVICE AT ALL or terrible service if they do it at all. (we feel). All our competition wants to sell trailers and RVs because that is where the money is - that is where the big profits are. In their eyes, service work is kind of a loss-leader and the additional employees and headaches that an additional $300,000 - $500,000 in service revenue is worth the effort. BUT what we have learned is that one of the main reasons we have more than doubled in sales almost every year and almost tripled in last over the last 12 months, is because we do service all of our products (and units we didn't sell). Our customers love us for this - peace of mind is everything to the 130-150 sales we make each month. We do a portion of our work in the field on service calls with our mobile unit. We can fix or repair ANTHING ANYWHERE for ANY Unit; our welding skills and creative fixes save our clients the expense of buying a new expensive trailer and they love us for it.

WE have sold thousands of units over the past 8 years and each person who walks out the door doesn't have to worry about "what will happen if my trailer or RV breaks down or needs piece welded that broke off, etc? We have the finest mechanic/technicians who have seen it all and "can fix anything. Also, we are well-known to be fast. The last thing someone wants to hear is that their work-trailer used for their landscaping company or a recreation trailer they need for their ATV will take 4-5 weeks because there are many customers in front of them. Not us. We will only make about $500,000 in service sales this year, but because we are such a solid SERVICE company we will almost triple our sales from last year, as stated above. Lastly, new customers come in almost every day , often from 50-100 miles away stating that the reason they came to us vs. a competitor they have used for years, is because they have heard about our professional and fast service work. In summary, service has directly and tremendously boosted our sales. We charge $98/hr. for service work. We are now raising our rates to $110/hr. or even $115/Hr. later in the year. We do not expect much, if any, push back on these rate increases since we clearly know that our customers want great service and WILL pay for it.

All trailers needs to be sturdy enough for the wide temperature changes in Colorado and also the potholes and road damage that Colorado gets every year. That is why we carry the best brands in trailers. We are a one-stop shop for your trailer needs, and strongly believe in a no pressure sales approach. We want our clients to feel welcome and comfortable every time they visit, whether it’s for a $20,000 trailer or a $4 replacement bulb.

Our Suppliers Love Us: We are quickly becoming one of the larger purchasers of new trailers in the state. We currently sell about 100-120 new trailers each month and our suppliers treat us like gold and are the excellent standing with all suppliers. However, because of our low credit and smaller floor plan size we have never really been able to "muscle" our suppliers for lower costs, we have been at their mercy for all these years. However, as of recent and going forward with more credit and purchasing power, a new owner can benefit from larger orders and lower costs per unit. Costs of goods sold (COGS) is of course one of the largest costs on our P and L and if we could get our costs down, by buying more inventory at a time, we can immediately increase pour profits even further, beyond raising our pricing, which we should also do at this stage. We are “one-stop shopping” for all our customers – this is key to our success.

We Are Diversified and Will Thrive in Good Economic Times and Bad: We have great diversity among hundreds and hundreds of long-standing customers and none of our customers represent more than 5% of our annual gross sales. As stated, we sell every type of trailer; recreational, work, utility, dump, horse, cargo, car haulers, equipment. We would not say that if another recession hits we will see a fall in sales. However, people "have" to have all work-related trailers since it is their source of income for big and small companies and farmers, ranchers etc. For recreational trailers, used for ATV's, snowmobiles, horse haulers, etc., people will almost always have $3,000 - $4,000 for a new trailer if theirs no longer works, to continue to enjoy these activities, we feel.

Licensing: The buyer will need to be able to obtain a dealer's license and that requires that you have good credit and also no felonies.

Detailed Information

Inventory:
Included in asking price
Real Estate:
Owned
Included in asking price
Building Sq. Ft.:
N/A
Employees:
8
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
10.1 Acres of Real Estate is Included in this Sale - Worth $950,000: The owner bought this 10.1 acres about 5 years ago. Since the purchase he has invested about $350,000 in new construction which includes 3 brand new buildings and roads, gravel, fencing and landscaping, etc. Today the layout of the entire operation is very functional and fully efficient. The seller feels that he can easily handle $15,000,000 - $20,000,000 in sales and service at this facility the way it is set up. Like Steven Covey says, " begin with the end in mind", and they did. The land is worth and will appraise for about $950,000, which is roughly what the seller paid and invested. Colorado real estate has appreciated tremendously over the past 30 years and especially over the past 3 years. However, this property is expected to appreciate solidly over the next 5-10 years, because directly across the street is a new $4.3 billion land development project that has just started with 12,000 new homes coming on 3,400 acres over the next several years. This will also bring tremendous growth to our sales and service of RVs and trailers. The land is completely clean form an environmental standpoint. This sale includes: $950,000 in real estate, approx. $180,000 in cash and another $35,000 in current assets. $1,500,000 in current inventory, trailers, vehicles, RV's (buyer also assumes the $865,000 floor plan and approx. $330,000 in other liabilities against these assets). The buyer will also receive approx. $170,000 in tools, utility vehicles, forklifts etc. Total Tangible Asset Value estimated at $2,835,000. Again, the buyer will assume the $865,000 floor plan and $330,000 in other debts. This nets out at about $1,640,000 in net asset value.
Competition:
Our Market: Oddly, people travel much further than you would think for a trailer or RV they want. We have no real competition to speak-of in a 20 miles radius. Were we do have competitors, our prices are lower, so naturally people shop on-line see our pricing and then come to us because we DO charge the lowest prices. Separate from that though is that people often come from 100-150 miles away to buy from us. We didn't originally think this would be the case, but we get customers in all the time from Ft. Collins, Greeley, Boulder, Colorado Springs and the mountains, to buy from us.. Trust be told, they drive right past many RV and trailer companies located on I-25 from the north as the drive into Denver because they like us or seek the lowest price and best service. We really do sell to a 200 mile radius. The new owner will step into very strong re-occurring cash flow from solid and long-standing relationships with customers that can send over $1.5MM- $2MM in trailer sales and work every year. We have all the work and sales available to us. The new owner would just need to expand the relationship we already have with existing customers to double or triple the sales potentially.
Growth & Expansion:
What We Do: We are far-and-away the finest RV and Trailer Sales and Service business in all of Denver Metro and possibly the entire Front Range. We sell between 110-130 new trailers per month and we sell used RV's and trucks. Also, we have the finest service techs to help our many thousands of loyal customers. Simply put, we can sell and service ANY trailer: ATV Trailers, Cargo Trailers, Construction Trailers, Dump Trailers, Gooseneck Trailers, Recreational, Single Axel Trailers, Tandem Axel Trailers, Landscaping Trailers (BIG) Tilt Trailers, Used, Build a Trailer. We only have about 3-4 good competitors in the entire Front Range who do what we do, but only half of those do any form of service work on the trailers, RV's and trucks they sell. Service is everything to keep over 98% customer satisfaction like we have. We sell every type of new trailers available including; utility, recreational, dump, horse, cargo, car haulers, equipment, etc. We also buy and consign USED RV's and trucks. The general idea is to buy and RV/truck cheap and sell it within say 20-30 days for $5,000 - $12,000 or more in gross profit. In fact, we just sold a used RV a few days ago for a $20,000 profit without even taking custody of it. We think after 8 years we have seen it all. Out West, people have trailers for 2 reasons; fun recreation and their toys, OR work and run their company/business. Both markets and end users find the use of their trailers to be critical to their fun or business operations. Even during the economic downturn we stood solid. The work and sales never slowed down. We are projected to cash flow over $900,000 in 2015 and the incredible profits we earn on fast-moving inventory is the way we do it. As stated above we sell between 110-130 new trailers per month and we earn a profit of at least $600 per unit. We can, and should, increase this to at least $750-$825 in markup on each unit because historically we have been the least expensive among our few competitors. Also, about 90% of the people that come to visit us for a trailer wind up getting one in the first or second visit. "They don't need to be SOLD, they came to buy", the seller insists. "They know what they want, we just have to have it in inventory". Our Marketing Strategy: Just 3-4 years ago, we were still fairly unknown in the used RV and trailers sales business in Colorado. In general, we have done an excellent job over the past several years with aggressive on-line Google pay-per-clink and SEO/Organic website marketing. Much of our growth from the start has come through either referral/word-of-mouth or previous buyers buying a new or upgraded unit. However, the greatest source of new leads and customer inquiries has come from the internet. We have a proactive and effective outside sales/marketing website company who has helped us generate tremendous lead growth. For the past 3-4 years we have been in all of the top searches for key words in our industry that we now dominate for. We only pay about $3,500/mo. in this effort, but who cares when it will generate over $5,500,000 in sales for 2015 with over 15% to the bottom line. No Pressure Sales: The owner is NOT an aggressive salesman at all. People came here because they have shopped online for what they want, and they have seen what we have in inventory due to our site. Therefore, they typically know walking in our door what trailer or what type of RV they seek. They do not need to be sold at all; but instead, sometimes just need to be educated on choices and ask their questions. In short, they are typically "sold" on the idea of a new unit driving into our lot. In fact over 90% of the people who come down our road either buy a unit or come back within a few days or weeks and buy a unit after doing more research. Perfect Safety and Business Operation History: Seller The seller is fully committed to sell all the assets (expect his personal assets in the company.) of the business and will agree to full Reps and Warrantees to a solid legal and business standing. We have NOT had one client complaint in all 8 years of operation. We have a stellar track record of finishing jobs on time and on budget. We also have a stellar worker’s safety history without one workman’s comp claim in the past 8 years! We have the lowest insurance and workman’s’ comp rates available due to our “perfect” safety record. We also have a perfect OSHA and safety record. We have the finest reputation in the Denver Front Range area. No legal battles. Denver and Colorado Growth Projections: Denver and all of Colorado in general is projected to continue solid economic growth going forward for the foreseeable future. Even during the economic downturn, Denver in general, held up very well and did NOT suffer the same hard fall/downturn that other states suffered during the past 7 years. See hyperlinks below of economic projections for Colorado 2015 Economic Forecast: http://www.metrodenver.org/research-reports/economic-forecasts/2015-economic-forecast/ Sterling Ranch development approved by Douglas County: http://www.denverpost.com/business/ci_27426642/first-phase-sterling-ranch-development-approved-by-douglas 2015 Denver Metro Economic Forecast: http://www.metrodenver.org/research-reports/economic-forecasts/2015-economic-forecast/ Denver is No. 3 — and Colorado is No. 4 - In Job Growth: http://www.bizjournals.com/denver/news/2014/03/20/top-10-cities-and-states-for-job-growth-include.html Licensing: The buyer will need to be able to obtain a dealer's license and that requires that you have good credit and also no felonies.
Financing:
Seller seeks another $500,000 form the profits of the company over the next 5 years.
Support & Training:
Training and Transfer of Operations to New Owner: Just over the past 8 years, the seller has built a wealth of knowledge on how best to buy used RVs, where to get them and how to "buy the right". He says, "you make you money on a used RV, when you buy it, not when you sell it." He has also has a great blueprint on how best to grow the company going forward to perhaps $10,000,000 next year and $13,000,000 - $15,000,000 in 2017. The seller is agreeing to carry a certain level of the sales price, and consequently has a tremendous financial interest in a smooth and orderly transfer of ownership and operations to ensure he gets paid the full asking price from a happy and profitable new owner. The seller will stay on for whatever length of time is needed to ensure the new owner is fully acclimated and is comfortable with "holding the wheel" going forward.
Reason for Selling:
The seller is moving back home to Michigan after being in Colorado for 8 years.

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Paul Olsen

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