Replacement Filter Service - Commercial HVAC

Overland, KS (Johnson County)

Replacement Filter Service - Commercial HVAC

Asking Price:$399,000

Cash Flow:$136,500

Gross Revenue:$186,000

EBITDA:$47,900

FF&E:$17,000

Inventory:$9,500

Established:1996

Replacement Filter Service - Commercial HVAC

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Business Description

The company was started in 1996 in the garage of an entrepreneur. The current owners, a father & son team, acquired the business in May, 2013 and continue to operate it out of their home/barn. When the business was acquired it was trending down because the owner was retirement age and less engaged in the business. Per filed tax returns revenue had fallen fairly constantly from $146K to $122K from 2008 to 2012 and was at a run rate of approximately $110K when acquired in 2013 with gross margin at a level of 64%.
After stabilizing the business and focusing attention on margin improvement the new owners improved gross margin to 82%. The with moderate new sales efforts, over the subsequent 2 1/2 years the current owners have increased revenue to its current $186K level. In 2013 the company offered only replacement filter service. In mid-2015 a coil cleaning service was added and offered to existing customers. Coil cleaning now accounts for 18% of revenue with less than 5% customer base penetration.

The company operates in a niche providing replacement air filter services to commercial businesses. HVAC companies offer sales, installation and maintenance services via highly trained service technicians and service vehicles that cost roughly $80 to $100 an hour to operate. At these hourly rates, HVAC companies cannot cost effectively offer replacement air filter service. Every major HVAC manufacturer recommends that your filters be changed monthly.

The company's value proposition, its low cost, quality filter solution, and its attractive customer base will be detailed to interested and qualified buyers.

Detailed Information

Inventory:
Included in asking price
Employees:
1
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
The company has a 2013 van with logo wrap and ladder rack. Also included are miscellaneous hand tools and hand power nut drivers, power coil washers, hoses and reels, back-pack sprayers, cutting tables and cutters. Inventory of $9,500 is also included. Total equipment and inventory value is $26,500. (Home Based)
Competition:
There are a few national service providers serving national businesses such as Wal-Mart. We do not compete with these service providers. There are a hand full of other competitors in portions of our market. These tend to focus on large site customers such as large office buildings, school districts, and the like. At least two competitors also sell air and/or water filters direct. There is frequently no competitor in the mix in new sales opportunities.
Growth & Expansion:
• High Margin [ 82% ], Low Competition, Service Business with Recurring Revenue Stream [ all sales/locations are scheduled and cyclical, no seasonality ] • Sales & Profits Have Risen Consistently for Each of the Last 3 Years • Growing Business with Bright Future [ no marketing, direct sales effort only has produced over 70% growth ] • Business Can Accommodate ~50% Growth with No Additional Cap EX • New service(s) revenue opportunity • Significant Incremental Revenue Opportunity for Existing HVAC Business
Financing:
Possible, but not more than 40%
Support & Training:
Ready To Go, Immediately Step into Low-Tech Business. Owners will provide 2 months on-site training and additional consulting assistance for 10 months.
Reason for Selling:
Owner is relocating to the east coast for personal reasons.
Home-Based:
This business is Home-Based

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Business Listed By:
Gerry Euston

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