$4.7M+ Growing Produce Distribution

San Jose, CA (Santa Clara County)

Seller Financing Available
$4.7M+ Growing Produce Distribution

Asking Price:$1,950,000

Cash Flow:$449,941

Gross Revenue:$4,707,626

EBITDA:$449,941

FF&E:N/A

Inventory:$8,000

Rate/Sq. Ft.:$0.58

Established:1987

$4.7M+ Growing Produce Distribution

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Business Description

If you would like to leverage a SBA loan to acquire a growing $4.7M+ business to generate $449K+ cash flows, here is one for you! This 29-year old family-owned farm produce wholesale and distribution company has a broad loyal and recurring customer base that can be further expanded with current warehouse and cold storage facilities at under-market rent. The couple is ready to retire, phasing out their involvement. They have installed an experienced management team and a workflow solution system for the new buyer to step in. Easy-to-learn early hours business giving you free time during the day. $200K net A/R is included in the price providing help on working capital!

Please refer to Listing ID - BTI 8418 when contacting us. Thank you.

Detailed Information

Inventory:
Included in asking price
Real Estate:
Leased
Building Sq. Ft.:
10,710
Lease Expiration:
4/14/2018
Employees:
11
Facilities:
This well known fresh produce whole sale and distributor has large cold storage facilities with 2 walk-in coolers of total 1,600 s.f. and 2 separate walk-in freezers of 35 s.f. each. There is plenty of space to build more cooling facilities (about 1,000 s.f if needed) in the warehouse to grow the business to about $8M in revenue, enjoying the current below-market rent of $0.58/s.f.
Competition:
SWOT Analysis Strength: 1) Loyal management team and experienced workers in place with turn-key throughput solutions; 2) 220+ loyal recurring customer accounts many of them have 10 years+ relationship with the Company; 3) A fleet of trucks with just-in-time fresh delivery services; 4) Experienced drivers are all above minimum wage with much less wage hike cost shifting compression issues; 5) Over a dozen major loyal and diversified accounts for about 15% of total revenue with less than 1% historical annual drop rate; 6) QuickBook accounting system for restaurant ordering by various means and vendor daily resupply ordering; 7) Niche areas of delicate and fresh items not carried by major produce suppliers; 8) $5M+ revenue positioned for further growth upto $7M to $8M without moving or leasing additional facilities; 9) Current cold storage facilities can be expanded for at least $1K s.f. with limited investment costs; 10) Under-market rent expiring April 2018 with 5 years option; 11) Warehouse is strategically located with various convenient routes covering both South and East Bays; 12) Consistent growth trend in revenue and net income profits; Weaknesses: 1) Current Quickbook system is not totally automated to track real-time inventory movement and price fluctuation; 2) Manual inventory daily count requires management time and attention as well as costs to the company; 3) Current sales manager is over stretched doing customer PR rather than focusing on sales and market expansion; 4) Accounting system is outsourced to outside accounting firm without automated Quickbook to reconcile banks accounts, invoices, and real-time reporting; 5) Other Distribution businesses close to the plant have drivers with higher pays but they need to take care of their own trucks and associated costs and expenses Opportunity: 1) Once the company grows into about $8M business, it would be highly desirable for acquisition by major players at premium price; 2) Direct mailing generated from targeted marketing web sites would increase about one customer account in 1,000 mailings; 3) There are about of 100K restaurants in SF Bay Area providing literally unlimited market grow potential for the years to come; 4) Good PR has already been established with major accounts such as restaurant chains and company cafeterias, . They can be leveraged for further growth in similar market segments; 5) Current private school account can be benchmarked for further growth in sectors like private schools, day care centers, and elderly care centers. 6) Well established route lines can take on more accounts with limited costs; 7) Other unexplored demographic areas in South and East Bays can be targeted for growth Threat: 1) The company can be targeted by other produce suppliers and acquired at a discounted priced prematurely; 2) Industry consolidation may impose further specialization in services and products; 3) Amazon, Safeway, Walmart, and other major customer oriented national grocery chains and on-line shopping are beginning to penetrate in the similar space of fresh produce delivery. However, they are not necessarily competitive in terms of price, qualify, and services. In addition, they are targeting general households, different from the market segments that the company is focusing; 4) Continued minimum rate hike will increase labor costs and wages making hiring experienced drivers challenging. Current drivers are paid way above minimum wage, and thus with much less wage hike cost shifting compression issues; 5) Sudden economic downturn like what the economic melt-down in 2008 through 2011 would have significant impact on food distribution volume and demand. However, the economic strength in the Bay Area has been resilient and bounced back time and time again.
Financing:
500000
Support & Training:
2 weeks and 20 hours/ week. If needed, seller can stay behind as a part-time consultant to help buyer to grow the business. Seller has a plan for the buyer to execute to grow to $7M to $8M, utilizing the current facilities and infrastructure.
Reason for Selling:
Retirement

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Michael Floorman

Business Listed By:
Michael Floorman

BTI Group Inc.

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Memberships & Certifications:
Indicates membership in the International Business Brokers Association (IBBA). The IBBA is the only certifying organization for Business Brokers and Intermediaries who assists people in buying or selling a business. Indicates membership in the M&A Source. The M&A Source is comprised of highly trained Intermediaries who advise on the preparation, sale and/or purchase of middle market (~$2M+ in revenue) business opportunities. Indicates membership in The California Association of Business Brokers (CABB).

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