Sebastian County, AR All Non-Classifiable Establishments For Sale

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LOWER PRICE! Medium Equip Rental, 800K Assets, Excellent ReputationUp in Earnings, Big Growth Potential, Loyal Employees, Fun to Own
$1,050,000Cash Flow: $359,000Seller Financing
LOWER PRICE! Medium Equip Rental, 800K Assets, Excellent ReputationUp in Earnings, Big Growth Potential, Loyal Employees, Fun to Own

Fort Smith, AR

The owner has decided to move from sitting in his office to going back behind the counter. He says it is fun and has seen an uptick in business and the bottom line through early April. The price has was recently lowered again to $1.050M which is 2.8 times 2017’s earnings. He said he is unwilling to lower it again and has shifted his focus to growing the company again. Equipment Rental company typically sell for more than 4 times their earnings because they are location driven and have a large amount of assets compared to the purchase price. This business also has $875K in Assets which means 83% of the purchase price is covered by assets. At less than 3 times the earnings this is being sold at a big discount. The Seller owns 3 other businesses and wants to be able to spend more time with his family. The Earnings for 2017 were 359,689 with the 2nd half of 2017 being much stronger than the first half because he is spending more time at the business again. He anticipates being back above $400K in earnings which they had in 2015 again in 2018 since he is spending 25 hours a week in the business again. He spends time at 3 other businesses that he owns and is averaging 25 hours a week at the rental company currently which is a lot more than he spent in 2016 and the first 5 months of 2017 but still down from the 40 hours a week he spent 3 years ago when they made 470K. This companies revenue and bottom line were down in late 2015, all of 2016, and the first half of 2017 because of personal reasons which causing him to step away from the business completely for a while. He is back and the earnings are slowly working their way back to normal again starting in mid-2017 and expected to continue improving in 2018. This makes this a tremendous time to buy this business. Plus, the SBA just lowered their down payment requirements to only 10% down for a qualified buyer, therefore, a buyer could get $875K in assets with $359K in earnings for only $105K down plus working capital. For Sale: 14 Year Old Equipment Rental Business always in the same great location The Seller is positive about the ability to grow this business. Plus, he has added over 100K in new equipment over the last 18 months and he believes he will get a big boost in business from a new port project that is supposed to be approved and started in 2018 that will last for years. He has decided to commit more time to his family which is the main reason he is selling. He can’t manage 4 business and give the rental business and his family the time they deserve. They are location and reputation driven but the owner had to deal with a family issue and has lost his passion for the business and has been spending more time with his family than in the business. He is able to spend more time in the business over the last 6 months and the revenues and earnings are growing again. A new owner can continue this and even improve upon it by being full time making the company more valuable than the current sales price. Keep in mind that the business made 470,514 on 1,109,699 in revenues in 2015 which would make the valuation almost 2M. He feels that a new owner can be back to 2015’s revenues next year and has seen a nice uptick this summer from returning to 25 hours plus per week. They have a long-standing, diversified customer base and add over five hundred new customers every year with a respectable amount of recurring customers. You also get an estimated 875K in current value Assets! This includes 835K in Rental, other Equipment, tools, etc. along with 40K in delivery vehicles. The 835K is 40% of what they paid for all of the rental equipment and FF & E. This is a conservative estimate based on the fact that the largest and most valuable pieces of rental equipment that makes up over half of this value has not dropped anywhere near 60% in value. The company is priced at 1,075,000 which is 2.77 times the 2017’s earnings which is a low multiple for a rental company with this much in hard assets and potential. Equipment rental companies often sell for 5 times earnings because they are location driven with a lot of assets compared to the purchase price. Equipment Rental companies are generally considered to be a fun Businesses to Own. Location: Western Arkansas near major interstate and large community ______________________________________________________________________________________ The sales price is 1.075M and includes all assets debt free at the closing except that he will be keeping their cash, AR, and AP which are not large balances and transferring the business debt free. This will be a stock sale. Recurring revenue, large value of assets compared to the purchase price, and location driven companies always deserve a high premium to earnings and I believe this is priced to sell. ______________________________________________________________________________________ Brief Overview and Deal Points: The business is a typical small equipment rental yard with everything from skid steers and backhoes to small tools and ladders. The buyer will also step into a solid pipeline of recurring revenue with solid gross profit margins which is a direct result of our great location and operating model. Plus, they have QuickBooks for their financials and use Alert Software for their rentals and Alert downloads directly into QuickBooks making the book keeping very easy. They have a perfect reputation for great customer service and fair dealings. The seller will agree to full Reps and Warranties to a solid legal and business standing. They have a great record for safety (OSHA) and have a low MOD rate. They have not paid the Better Business Bureau to be rated or accredited but have no complaints filed with the BBB as of October of 2017. They have a great rating of 5 stars on Facebook and 4 stars on Google which are very positive reviews. The owner works in the store part time. He is happy to sign a non-compete. He has 7 full time employees including a manager and mechanic along with a part time yard help and he believes they will all stay and help during the transition period. The business had an admin steal from the company over a two year period for February 2014 to September 2015. The owner has estimated that the total was approximately 75K for 2014 and 75K for 2015. This would have increased the valuation and the sales price and I can’t add it back until she details how much money and when it was taken by affidavit. The owner will discuss this with potential buyers.. The owner is also a member of the American Rental Association (ARA) which allows him to buy equipment at the lowest prices available anywhere. He also attends the annual ARA conference to learn more about the business and to order equipment because that is traditionally where owners can get the best discounts and terms available. Joining the ARA pays for itself and allows you to meet and learn from others in the industry. They maintain their rental equipment at the store. If a customer has a problem with their equipment, they make it a high priority to either repair the equipment as soon as possible or to replace it with another unit. Plus, they have the finest mechanic in the area and will do small engine repair and maintenance for their customers equipment in their slow season(for a charge). The majority of their equipment is bought at high volume dealer pricing and they can actually rent it for years and typically can sell it for 60% to 100% of what they paid for it after getting well over the price they paid for it in rental revenues. Many items like ladders, scaffolding, many of the party rental assets, and small tools last forever and can be rented over and over covering their cost many times over each year. The business will transfer debt free. They are, for the most part, a cash/credit card business. They do have a number of charge accounts, but they manage their accounts receivables and have less than a 1% default rate. Theft has been virtually non-existent. They have 4 Main Revenue Areas: 1) General Tool and Equipment - They cater to the homeowner, the do-it-your selfer, small business, and contractors. They have hundreds of pieces of rental equipment in the inventory ranging from small tools to heavier construction equipment like skidsteers and backhoes. The company offers delivery when requested, for an additional price. At the present time, they do not have a commercial driver and only offer a couple of pieces of "big iron" which is licensed and can be driven off the lot. Warranty work has been steadily increasing also in 2017. 2) Special Event and Party Equipment - They cater to those customers hosting small informal events like backyard weddings, parties, company picnics, fundraisers, community events, etc. Their inventory ranges from tents, to dance floors, to tables & chairs, to inventory that support large events and caterers. This is a high margin business that they do not properly promote. 3) Retail and Add on Merchandise – The company sells all kinds of items that are ancillary to the rental of their equipment such as sandpaper, floor pads, saw blades, gloves, oil, etc. In addition they carry propane and this area of sales is considered high margin, very profitable, and introduces new customers. 4) Equipment Certification Classes - In 2015, they started offering Certification classes for employees of contractors that they rent to who now need to be certified to operate forklifts and man lifts. The owner purchased the educational materials and built out a space to give classes at their location. They give 5 different classes which have totaled 110 attendees to date and is increasing in popularity and need. They charge between 100 to 150 per person and a new owner could easily advertise this service increasing revenue two ways: Adding more revenue from the classes and way more importantly by adding new contractors as loyal customers of this company. They have never advertised this service. Marketing: The business has brochures and a website. He believes that the business could benefit from more marketing but are always going to be more location and word of mouth driven which helps to keep the cost down. He will visit job sites but doesn’t spend enough time doing this and believes that it is worth doing. Many contractors are unaware that they are there and what they rent. The building is 30,000 Square feet that they pay for only the space that they use along with a great yard. The property is fenced, well lighted, and has room for growth. The location is leased at 5,600 per month triple net. The owner does not believe the new owner will have any trouble negotiating a new lease or transfer the old during the purchase process. For the last 14 years, the name has been the same at the same location which is very valuable based on its location and that it is naturally on the first page of a google search for rental equipment in their area. Growth and Expansion: The business should continue to grow without any changes to the stores advertising or marketing efforts, but it could grow faster by adding more party inventory, having a stronger presence online with more detail, adding rental inventory, and by the owner being more present. Their sales could grow faster if the new owner hires an outside salesperson to visit construction job sites and other industrial companies. The seller also believes that a 2nd location with the model that they use can be replicated profitably. In addition, he sees rental rates increasing by their competitors as the economy is gaining momentum. This will allow a new owner to increase rates on many types of equipment as equipment demand increases. Currently their operation is only open 6 days a week which costs them a lot of business. As the market grows, a new owner should have the store open on Sundays and later in the day during the week. Plus, the new port project should directly and indirectly increase their revenues starting sometime in 2018. Another potential area of growth and expansion is new equipment sales. Currently they have some inventory and will special order new equipment upon a customer request, but this could be expanded by stocking and displaying a larger selection of new equipment. ______________________________________________________________________________________ Please Call of Email for Information: The broker is available at any time to discuss your interest in this offering and can set up a meeting either in person or by phone with the owner(s). Thank you for your interest. Sincerely, Jeff Chapman Eisnaugle Direct 303-905-7607 Office 303-284-7025 Fax 720-524-6482 jce@companybroker.com This was prepared by Company Broker Group with information provided by the Seller. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections. The information contained in this e-mail message is confidential and may be protected from disclosure. Please be aware that any other use, printing, copying, disclosure or dissemination of this communication may be subject to legal restriction or sanction. If you have received this e-mail message in error, please reply to the sender and delete it from your computer. Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage. 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