More Detailed Overview
Buyer does not need experience in construction. The owner will not need a specific license. The owner will train the new buyer.
Vendors: They are an Authorized Dealer for the 3 main products that they install. They are grandfathered into the best Contractor Pricing available for their main vendor. Additionally, their volume is high enough so that they are slotted into the premium status for the best pricing available. Their main vendor has spent a lot of time and money advertising, which helps drive customers to them since they have Authorized Dealer status and are the top installer in the state.
They use only the finest materials and have great relationships with the suppliers/vendors. As in all aspects of the business, they have detailed instructions on the ordering process, and systems in place through Quickbooks to keep track of inventory and ordering so that nothing slips through the cracks. Their main vendor offers free training online for selling and installing their products and provides the best service and highest quality products from an inexpensive easy to train hourly employees whom are all W-2’d.
Sales: They have more work than they can handle in the summer with their phones ringing all day from May to August. For the last few years the Denver Metro area has seen incredible growth, and because the products they install work so well in the Denver climate they are in high demand. The majority of their work comes from referrals and from online searches. The new owner will step into a very strong reoccurring cash flow from solid relationships with individuals that refer them work. They don’t pay a sales force and have no dedicated sales people.
Web: They have a complete business website, updated in 2019 to WordPress and hosted by Godaddy. They have 16 years of constant website submissions to push them near the top of the organic web searches, and pay for placement ads in other platforms which puts them consistently in the top 3 for paid advertisers. They also receive work from Angie’s List where they have received the Super Service Award for the last 8 years, from Yelp, where they have received an outstanding service award for the last 3 years, and many other review sites as well.
Testimonials: The single greatest attribute is their phenomenal reputation online. Since 2003 they have completed thousands of new fan systems and have never had one complaint that they didn’t take care of immediately. They are 5 star rated with Google, and A+ rated with the BBB with no complaints and a perfect track record. They also have a stellar worker’s safety history without one claim and they enjoy the lowest insurance and workman’s’ comp rates available due to their “perfect” safety record. The seller will agree to full Reps and Warranties to a solid legal and business standing. This will be an asset sale.
Vehicles & Warehouse: The business has 3 wrapped utility vans worth a combined of around 60K, including 2 vans that are 2016 models with custom construction internally, specifically suited for the work. The tools, furniture, equipment, and other assets (other than inventory) will be included in the sale. The warehouse is incredibly organized and stocked up with all items needed for any job. Two indoor bays are available for 9’ high vehicles, and there is parking for taller vehicles in front of the building. A showroom has been constructed where potential customers can experience 3 different whole house fan systems. Conversion rates for customer bookings after seeing the showroom are extremely high, around 90%. There are two offices, each with a phone and computer for taking sales calls and emails. Phones are set up with the option to be answered remotely as well.
Financial: A Quickbooks file has been in place for them for ten years now, and has been meticulously maintained which makes it easy to keep financials organized. They have also created documentation with instructions on how to run Quickbooks specifically for this business. They have tables with checklists which outline all documents needed to be filed during the year and all payments needed to be made. Insurance policies are in place for Liability, Workman’s Comp, Auto and Property, each set up specifically for them. They’ve also kept all copies of previous insurance audits with excel tables to aid in making future audits seamless and easy.
Marketing / Growth: The owner has grown the business from 0 in 2003 to 800K + currently in revenue, while spending 6K a year on advertising. This is less than 1% of the revenues. It took many years to get to this point, but they currently turn away work every day during the peak season because they cannot keep up with demand. This is one of the best parts of this listing, and there are literally dozens of ways to grow this company. They specialize in a minimal amount of products to accomplish the goal of making customers comfortable in their homes and saving energy, so adding products that are popular year-round and can be installed in the winter like insulation, bath fans, ceiling fans, solar lighting tubes, etc, would be a relatively easy task. Working in the solar arena makes sense because Colorado is the 2nd sunniest state in the nation with over 300 days a year of sunny weather a year. The products listed above require the same knowledge, equipment and tools to install as whole house fans. Also, depending on growth, it would be easy to add offices in other locations since the business is so organized and streamlined. The seller says, “The new buyer can grow this company throughout the front range by just leveraging our 5 star online reputation”. They currently advertise in many areas online, and encourages word of mouth and positive testimonials with each installation.
Employees: Since the work is seasonal, they keep some workers employed year-round but several leave for winter and come back each spring when needed. They have developed a detailed Operations Manuals + slideshows for employees that outline company policies. This business typically has 9 or 10 employees in the busy season and 2 or 3 full time employees through the off-season. Their busy season coincides very well with school schedules, so the work is ideal for students on summer break. For any hiring that may need to be done, online profiles exist with detailed job descriptions that make filling positions a much easier process. They have always held back on hourly pay in order to offer Profit Sharing at the end of the year, but if wages are increased and Profit Sharing eliminated, it would be easier to find qualified candidates each spring.
On the Operational/Install side, they have checklists for all items needed in each work van and technical slideshows to instruct and refresh installers on the correct way to install and troubleshoot the products they represent. Each slideshow includes detailed photos taken on jobsites over the last 16 years. Written tests exist for Installation Technicians (IT) who are interested in becoming Project Managers (PM). Jobsite “prep” checklists go out with every job so that no steps are missed, working toward the goal of getting jobs completed in one day with no follow-up appointments needed. Google calendar is set up for each employee in order to manage and notify employees and define teams for each day’s work. Clipboard systems are also in place with job details for the day. A mobile merchant account app is on each PM’s phone so that payment can be processed once the job is completed.
They have an employee who has been with the business for over 11 years. He started as an IT, moved to the PM position and is now the Director of Operations. He is on salary, works year-round and is flexible and available to perform installs whenever they come up. He is completely self-sufficient and skilled in training new employees.
On the admin/sales side of the business, detailed systems are in place to maximize efficiency. To aid sales, each sales team member has a binder with information that makes all aspects of selling fan systems very easy and provide a consistent message to each customer. The binder includes information sheets, which make it easy to collect information from customers and make the estimation process seamless and easy. Sheets also exist with pricing and technical information to relay to potential customers, or “leads”. They have internal documents that have every possible question and answer, making it easy to answer detailed questions via email and doubles as a study guide for new employees. Sales employees are easy to train because the owner has an efficient model that his employees follow which covers everything from the incoming phone call to processing the final paperwork.
In 2019, two other employees worked on the sales side of things and performed other duties while answering the phones. The main employee has been with them for over 6 years, and is more than willing to sign a legal document at the closing, offering a minimum of 6 months of future work with the new owner. The current owner pays this employee very well because they are personal friends and also because he has brought a lot of great attributes to the business. The owner allows him flexible hours for family obligations, recreation and volunteer work, and the owner believes that he will stay long-term if a new owner is open to that arrangement. If a new buyer wants to hire or promote instead, this employee makes the equivalent of 90K and a new manager would cost approximately 60K with the extra money now going to the bottom line. One of the 3 is off for the winter, but anxious to come back in the spring of 2020.
The current owner will stay on for several months as needed. This will ensure a comfortable transition of employee, vendor, and customer relationships. The seller has a wealth of knowledge and many ideas to grow the business. In short, he is committed to help the new owner take the business to the next level, he’s passionate about the work accomplished and is dedicated to setting the new owner up for success in every way. The owner works out of his house, the office, and in the field installing and/or meeting with customers. He does a lot of installing which is not the best use of his time. A new owner should be more focused on growth.
There are at least 7 potential employees that have worked for them over previous years who are eligible for rehire. There is also an IRA plan set up for employees who have been with them for at least one year.
Records: There is a CRM database program in place that has detailed information from every job completed. Every completed job has a paper invoice on record, which has been signed by the customer. The invoice used has evolved over 16 years to cover and protect the business owner, as well as to keep customers informed. Thousands of jobsite photos exist that are dated and labeled. Detailed voice recordings have been done for each job since 2009. Most importantly, there are thousands of existing detailed leads in the database. These leads include specific details and pricing for each customer’s home. It’s easy to sort these customers out in order to follow up with them in the Spring, and when they call it’s very easy to bring up their information and take up where you left off when last you spoke. Many of these leads will call in the spring to book an appointment to have the previously estimated work done.
In summary, they are incredibly organized turn-key business with amazing growth potential, a stellar track record and a high profit margin. Colorado is the best state in the country to own a business like this based on both weather and growth of population. Colorado is #1 for Economic Growth in the US says US News and World Report. Many magazines and articles have rated Denver #1 for leading locations for economic strength. Here is “Area Developments” top 10 U.S. “Leading Locations”: 1. Denver. 2. Houston. 3. Grand Rapids, Michigan. 4. Greeley. 5. San Francisco. 6. San Jose. 7. Seattle. 8. Columbus. 9. Boulder. 10. Austin. They currently perform work in the 3 cities from that list in bold.
Jeff Chapman Eisnaugle
Businessbrokercolorado.com & Jeffchapmaneisnaugle.com