Clackamas County, OR Electrical and Mechanical Contracting Businesses For Sale

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A profitable business you never heard of!A different kind of business--profitable but unusual!
$364,595Cash Flow: $124,294Seller Financing
A profitable business you never heard of!A different kind of business--profitable but unusual!

Clackamas County, OR

You know how, when you’re driving, you see those crews working on some kind of equipment on the highway and at street intersections, usually at night? What the heck are they doing? I didn’t know, but now I do. Frequently they’re working on Inductive Traffic Loops! Inductive what? OK, now that I know that, I still don’t have a clue what they’re doing or why. But electrical contractors know, and Oregon contractors know to call this company when that type of work needs to be done. First, the electrical contractor bids on an “infrastructure” contract with a highway or street department, including this company’s sub-bid. Then when they are awarded the contract this specialty company is already built in to the bid. Several different contractors might include this company in their bids, so its opportunity to be awarded the contract goes up. When the prime contractor is selected, they put this specialty contractor’s job on their calendar. It’s that simple, and this company typically gets a large share of the work that is done every year. The overall frequency of these contract awards depends on government funding. They vary year by year, but they are not going to go away any time soon. These jobs are expected to continue for many years. There is new construction to consider, as well as repairs and ongoing maintenance (as required to keep the installed base of traffic control systems running.) A specialty contractor’s license is required, but that is obtainable if the buyer doesn’t already have one. If necessary, the present owner will provide transition support while that process is carried out. This company has been built from the ground up over the past 16 years (plus prior experience), and it makes an extraordinary return on investment with minimal owner involvement. Its qualifications, stellar reputation for quality, and its on-time performance assure that it will be in the running for the bidding opportunities that arise each year. Why is it now available to acquire? The answer is simple—the owners are ready to retire. Even a business that has trained employees to do the work still requires some attention, and these owners are ready to let someone else give it that attention at this time. Like all of our listings, this company is priced to provide a strong return on investment, one that you could never get at a financial institution. These days, one is lucky to get a few percent a year for committing cash in the form of a multiple-year CD. Maybe your local bank might pay you 3% (i.e., $30 per year for each thousand dollars invested) if you’re lucky. There are no guarantees, of course, but this business is priced on its proven cash flow over years, with an objective valuation geared to more than 10 times the typical CD rate of return. One nice thing is that there is virtually no sunk cost in supplies inventory. There is nothing wrong with having inventory, and many companies have it. But it does represent a “permanent working capital” investment. If a company doesn’t have to maintain it, the ROI is even better. Specialty equipment, however, is another matter. It is necessary that a company have it in order to do this kind of work, and this company has everything required. That’s one reason that it gets its share of contracts; it’s ready and able to install, maintain, and repair inductive traffic loops anywhere in the state. Sixteen years of building reliable relationships means that it is likely to continue getting that market share into the future. What about transition support? Simply put, yes; there will be a lot of support. From initial orientation to ongoing availability, the owners are committed to making sure the buyer gets the kind of know-how that has put them at the top of this industry in Oregon. Support details will need to be worked out, but the present owners will be very hands on for the first month, and then available for phone calls and emails for months afterward. If the buyer wishes to retain them on a formal consulting basis, that can be discussed as well. Expansion and Growth Potential? How might this work? The company’s continuing growth depends on two interlocking drivers: the underlying demand on the part of government agencies (i.e., highway and street departments), and the relationships with prime contractors and electrical contractors. The first of these drivers varies depending on government budget decisions. It expected to continue expanding for many decades (as the cost of replacing the installed base of inductive traffic loops will need continuing maintenance and repair.) This activity is independent of new technologies because of the high capital cost of replacing existing infrastructure. Second is the foundation of contractor relationships. Many years in the making, this part of the company can continue to grow through increased marketing, pretty much as any company can grow by increasing its marketing activities. This aspect of growth will come through ongoing development of the company’s online presence, as well as from one-on-one sales and promotion activities. It is a continuation of the process by which the company has achieved its present solid reputation and its level of success to date. In this case the owner is willing to consider partial owner financing for the right person and the right terms. Not 100% financing, but substantial. In addition—the new, more relaxed SBA guidelines this year make for another good reason to think about getting help from the government to buy this business. The wise use of financing leverage can increase an already superb return on investment. Summary and Conclusion That’s about it. The business-for-sale market doesn’t have many good opportunities at this price point (a lot of alleged businesses are really “jobs-in-disguise”, not really priced as financial investments.) And it certainly doesn’t have many businesses that run this smoothly, with so little owner involvement, and that make such a strong return on investment. So—if you’re looking for a solid Oregon business investment, click on the link to request a non-disclosure agreement. In a day or so you will receive a three-year financial history of cash flows and an objective, market-related risk analysis. Together, they show how the value was calculated, and will give you the opportunity to see if you would be interested in exploring this unusual opportunity further. ###


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