Tire and Service Shop in Local Community

5850

Turnkey tire and service shop in a friendly town between Omaha and Des Moines. This tire and auto shop has been in operation since 1986, with the current owner in place since 2008. With 5 hoists and room to add one more, the current absentee owner made a 95% increase in cash flow between 2013 and 2014, and stabilized the cash flow subsequently. This shop also specializes in commercial and agricultural tires, thus providing a competitive edge over other shops that only service passenger vehicles. The current consumer mix is 60% tire sales and 40% service work. Of the tire sales, 70% are consumer tires, with 20% being farm equipment, and the remaining 10% of sales being lawn and garden equipment. Offering farm service calls and Over The Road (OTR) mobile service for emergencies provides an extra level of customer service and peace of mind for their loyal customers.
A buyer (absentee owner) with a down payment of $16,500 would profit $20,861, or 126% in the first year after all debts and expenses are paid.

Financial Overview
List Price: $110,000
Gross Sales
2015: $505,709
2014: $513,009
2013: $707,000
Consumer Mix:
Tire Sales: 60%
? 70% Consumer
? 20% Farm equipment
? 10% Lawn and Garden equipment
Service Work: 40%
Owner Profit/Cash Flow
2015: $82,228 [$35,267 if absentee owned]
2014: $84,458 [$39,594 if absentee owned]
2013: $44,564 [$1,943 if absentee owned]
YOY Growth/Sales Trends: 95% increase in cash flow from 2013 to 2014
Profit Margin: 7%
Multiple: 2.95*Multiples range from 1-5, with the average being 3
Valuation: Cash Flow x Multiple = Price
$37,431 x 2.95 = $110,421**
** Based on owner absentee valuation

Assets Included in Purchase: $147,830
Equipment: $50,000
Vehicles: $25,000
Inventory: $51,462*
A/R: $21,368
*amounts may vary
Business Information
Years in Business: Original 1986, Current owner 2008
Location and Service Area: Cass County, Iowa, between Omaha and Des Moines
Demographics: Auto, Farm and Lawn & Garden
Reason for Selling: Divesting of business holdings
Employees: 1 Manager/Lead Tech, 1 General Tech
Hours: M – F 7:30 to 5:30 Sat 7:30 to 12:00
Seller Training Period: Up to 90 days
Current Owner’s Responsibilities: Absentee Owner

Funding Example
Purchase Price: $110,000
15% Buyer Down Payment: $16,500
10% Seller Financing: $11,000
75% Bank Loan: $82,500
A buyer (absentee owner) with a down payment of $16,500 would profit $20,861, or 126% in the first year after all debts and expenses are paid.

Facilities:

For sale through a real estate agent

Training/Support:

up to 90 days

Seller Financing:

10% Seller Financing: $11,000

Sale Reason:

Divesting of business holdings