The Business Inquirer #133
Sharing a high margin law care business in Key West, an award-winning dog training and boarding facility, a pool service business serving over 400 clients, and more.
Hello Friends!
In this week’s issue:
🏡 Main Street - 4 listings
⚒️ Tools & Resources
💡 How I Can Help
This issue of The Business Inquirer is sponsored by Smash.vc
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🏡 Main Street
Commercial & Residential Lawn Care Company - $1.5M
Launched in 2008
Based in Key West, FL
Revenue: $1.5M
Profit: $560k
Margin: 37%
Multiple: 2.68x
💬 Quick Take
Perfect for those who enjoy warm weather! This 15-year-old lawn care company based in Key West, Florida offers a mature business model with strong recurring revenues. The business is turnkey, supported by a well-trained workforce and longstanding customer relationships. While the company primarily focuses on lawn services, there is potential for diversification.
✅ What I Like
Established Business
The company has been in operation for 15 years, providing a proven track record of stability and reliability.
Recurring Revenue
Almost 100% of the annual revenue is derived from recurring weekly lawn services, offering a steady cash flow.
Turnkey Operation
A well-trained workforce is already in place, allowing the new owner to hit the ground running.
No Seasonality
The business operates in Key West where there is no seasonality for lawn care.
❓ Concerns
Limited Diversification
Currently, the business focuses nearly exclusively on lawn care services, offering limited diversification.
Geographic Limitations
The company's operations are confined to Key West, Florida, potentially limiting growth prospects.
Competitive Landscape
The lawn care industry is competitive, requiring effective marketing and customer service to maintain market share.
💼 Due Diligence Questions
Client Concentration: Does any one client represent more than 20% of revenue?
Customer Retention: What is the customer churn rate? How are client satisfaction ratings?
Employee Turnover: What is the turnover rate among employees? How easy is it to hire for this type of business?
Government Contract: Can the centralized yard facility contract with the government be transferred to the new owner?
Client Contracts: Are there long-term service contracts in place? When do they renew?
Equipment Condition: What is the state of the lawn care equipment? Will it require immediate investment?
🚀 Growth Levers
Service Diversification: Expand into landscaping or irrigation services to existing clients for additional revenue streams.
Geographic Expansion: Branch out beyond Key West to nearby areas for increased customer reach.
Digital Marketing: Implement a robust digital marketing strategy to attract new customers and retain existing ones.
Partner Collaborations: Partner with real estate companies or property managers to offer package deals.
🙋🏻♂️ The Buyer
Operational Expertise: An owner with experience in the lawn care or service industry would be beneficial.
Local Knowledge: Familiarity with Key West and the surrounding markets can provide a competitive edge.
Resource Availability: The potential buyer should have the capital for possible equipment upgrades and business expansion.
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Dog Training & Boarding Facility in TX - $1.2M
Launched in 2019
Located in the Houston metro area
Revenue: $1.2M
SDE: $530k
Margin: 44%
Multiple: 2.26x
💬 Quick Take
Great opportunity for dog lovers. The business is in a prime location in Houston's bustling metro area and has seen strong growth since launching. An evergreen niche with nice margins and a reasonable valuation.
✅ What I Like
Franchise Potential
The business is well-structured and could be easily franchised, offering another revenue stream.
Comprehensive Services
The company isn't just about dog training; it also offers boarding, daycare, and video tutorials.
Location Advantage
Situated in Houston's thriving metropolitan area, the business benefits from a large potential customer base.
❓ Concerns
Limited Marketing
Growth opportunities beyond social media have yet to be tapped into.
High Dependence on Personnel
As a service-based business, the quality of services is tied to the current team and this can present challenges if there is employee turnover.
Real Estate
The business owns the real estate yet it is not clear if it is included in the asking price.
💼 Due Diligence Questions
Customer Retention: What is the customer retention and satisfaction rate?
Reviews: How do client reviews look on social media and Google/Yelp?
Staff Turnover: What's the staff turnover rate, and are key staff willing to stay post-acquisition? How easy is it to hire?
Intellectual Property: Are there any proprietary training methods or curricula?
Market Analysis: What is the current market share, and who are the major competitors?
Real Estate: Who owns the real estate? How much is the lease?
License and Permits: Are all required licenses and permits up to date?
🚀 Growth Levers
Expand Services: Introducing grooming services can cater to broader customer needs.
Online Marketing: Apart from social media, other online platforms like Google Ads can be beneficial.
Group Classes: Offering group training sessions could boost revenue without a significant increase in costs.
Franchise Model: Given the business's well-organized structure, franchising is a viable growth option.
🙋🏻♂️ The Buyer
Experienced in Pet Services: A buyer with experience in pet care or training will find it easier to manage and grow the business.
Focused on Customer Service: The business thrives on high customer satisfaction; this should be a priority for the buyer.
Growth-Oriented: A buyer with a vision to expand services or even franchise will find this opportunity attractive.
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High-End Pool Service & Repair in NY - $1.2M
Based in Lee County, NY
Serves 400-450 luxury pools in gated communities
4 FT employees
Revenue: $1.3M
SDE: $480k
Margin: 37%
Multiple: 2.50x
💬 Quick Take
A well-established pool service and repair business with a focus on the high-end residential market in Lee County. The team is already in place and the tight pool routes in gated communities offer efficiency. The valuation seems reasonable.
✅ What I Like
Streamlined Operations
Four full-time employees manage 450-500 high-end accounts, illustrating operational efficiency.
Geographic Concentration
Most accounts are in close proximity within gated communities, minimizing transit time and costs.
❓ Concerns
Limited Market Focus
Exclusively servicing high-end residential pools might limit market expansion.
Economic Sensitivity
High-end services could be vulnerable to economic downturns affecting discretionary spending.
Seasonality
The business may be very seasonal depending on the types of pools it services.
💼 Due Diligence Questions
Client Concentration: Does any particular client make up a large portion of the revenue?
Employee Retention: What is the employee turnover rate, and are key personnel willing to stay post-acquisition?
Customer Contracts: Are there long-term contracts with clients, and what are the termination clauses? When do the contracts renew?
Competitive Landscape: Who are the main competitors, and what is the market share? What is the total TAM?
Seasonality: How has seasonality impacted this business?
Revenue Breakdown: What % of revenue is from repair vs. cleaning? Which is the higher margin business?
Equipment: In what shape is the equipment? Does it require repair or replacement?
Licensing and Compliance: Are all necessary licenses, permits, and insurances in place?
Owner: How involved is the owner day-to-day? What parts of the business do they work on? Why are they selling the business?
🚀 Growth Levers
Expand Services: Adding additional services like pool cleaning or renovations could attract new clientele.
Marketing Push: Implementing a targeted marketing campaign can drive brand awareness and new business.
Technology Utilization: Employing pool maintenance software can streamline scheduling and billing.
Franchising: Given its proven business model, this could be a candidate for a franchising opportunity.
🙋🏻♂️ The Buyer
Experienced in Home Services: Understanding of the home services industry, especially pools, would be advantageous.
Growth-Oriented: An individual or firm interested in leveraging the business model for expansion.
Management Skills: Strong team management skills are crucial given the dependence on a small team of employees.
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22 Bed Motel in Rochester, NY
How did you like this issue of the newsletter?
⚒️Tools & Resources
I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors of the newsletter.
PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.
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Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($500k - $10m revenue) considering exits. All deals are sourced by the Rejigg team. Their team adds 7-10 new deals each week.
Acquisition Lab - The Premier Accelerator for Buying a Business created by Walker Deibel, Author of Buy Then Build: How Acquisition Entrepreneurs Outsmart the Start-up Game. They combine world-class education, a vetted community, extensive group coaching, and resources to provide the first do-it-with-you buy-side advisory service.
Smash.vc - Whether you're looking to sell minority stakes in your business to take some chips off the table, looking for a partner to acquire an asset, or needing capital to complete an SBA deal, we'd love to chat with you.
BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.
Search Fund Coalition - community for the Entrepreneurship Through Acquisition ecosystem. Monthly events and meetups for acquisition entrepreneurs.
Deal Sourcing Guide - a comprehensive list of business marketplaces, brokers, deal origination firms, and more.
💡 How I Can Help
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