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EXECUTION Advice on a business acquisition and future development

Discussion in 'Progress/Execution Threads' started by Hurley32533, Aug 4, 2018.

  1. Hurley32533
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    Hurley32533 New Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Fastlaners, I'm currently in the due diligence stage of purchasing a parking lot company here in Florida. The purpose of creating this thread is to chronicle the journey along with all successes and failures. In the spirit of full disclosure please forgive my horrible spelling and punctuation. As we all know this forum is a goldmine of information and resources for those willing to execute. Along with being able to share this experience with the community I'm also selfishly looking to tap into the vast wisdom of successful forum members for ideas and advice.

    Okay for a quick business snapshot! The company has been around for 30 years and the current owner has had the business for the past 13 years and is 70 and looking to retire. This company has 5 employees that operate sweeper trucks on commercial parking lots at night over a three county area. The business grosses $360,000 a year and nets $110,000 through 1-3 year contracts with commercial companies and other big box retailers. The employees are long term and have been employed at the business on average 8 years. The owners present duties include management, bookkeeping, payroll, customer relations and ensuring the mechanic keeps the sweepers in good working order. The assets value for all sweepers and miscellaneous equipment is in the $150,000 range. The broker has the company listed for $265,000 with a possible portion of owner financing as well as SBA loan with 10-20% down payment. Having looked over financials and with the current staff and assets I believe the company has the potential to grow by 30-50%.

    For the sake of getting some content out today I'm going to go ahead and submit. Future postings will contain more progress/failure, process, details and also more on my story and my ideas on fastlaning this business should I decide to acquire. Cheers for now!
     
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  2. BrettA
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    BrettA Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    Hurley,

    Good luck with this and keep us posted.

    Brett
     
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  3. Hurley32533
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    Hurley32533 New Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Thanks for the support guys! More to come so stay tuned.
     
  4. Hurley32533
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    Hurley32533 New Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Ok folks! So today the wife and I met with the business broker and owner at the large warehouse that all the trucks,tools equipment etc are housed. For the next half hour or so the owner went over basically how the equipment worked and the ends and outs of the day to day operations and employee roles. Most of the trucks had between 150-200,000 miles on the Diesel engines and lower hours on the vacuum systems. From what I’ve researched these diesels can go for 300-350,000 with maintenance. After looking over the equipment we proceeded into the office to discuss and look over the administrative side of the operation. The owners primary functions are administrative,customer service,employee management,billing,payroll etc which from what he told us requires roughly 15 hours a week. Basically he has one piece of software that runs the whole operation and also a service thru Verizon that tracks the movement of the trucks while on route. The owner showed us his customer list which contained corporations such as Walmart,Publix,Winn-Dixie,Target,Coca-Cola and many others. The customer list contained roughly 30 corporations. Also during the review of the software we took a look at accounts receivable and discussed insurance,payroll,fuel cost,taxes,invoicing and a few other aspects of the operations side. Overall my wife and I got a good vibe from the owner. We felt as though he had good character and was being upfront and honest about the business. One thing also to note is he has a complete operations manual that was very comprehensive on the nuts and bolts of the power sweeping business. We were impressed with the fact that he had systematized and automated the majority of the functions and processes of the operation. So after completing the tour and parting ways with the owner we went to lunch with the broker.During lunch we discussed possible Sba financing options with 10-15 down and also the possibility of a owner carry back of 5 percent. Much to my surprise the broker said normally with Sba loans the bank wants to place a lien on your home for collateral purposes in order to qualify. At the moment I’m not sure how I feel about a lien on the house however it’s mortgaged and not owned by us anyways so I’m not so sure it would matter. Any thoughts on this option folks? Have any members of the community went thru the process of securing a Sba loan and if so would you mind sharing your experience? If you have read the entire post thank you and I apologize for the length.As always any feedback,advice,criticism or whatever you would like to share is welcomed. Cheers for now!
     

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