29 Year Old Commercial/Residential Plumbing & Heating Co, Higher Revenues in 2020 than 2019, Highly Rated-West Metro Denver
This business was sold for 390K to the current owners in October of 2019. The current owners are not plumbers and the plumbing business was not a business they have had much exposure to; however, they have re-vamped the small family owned business they bought in November 2019. They have improved all of the systems during a very challenging business and economic times (2020). Highlighted improvements include: Modernized Accounting (QuickBooks Online, CRM Database Management, and Invoicing), Automated Time-Management (GPS, ClockShark), Industry-Customized Proposal and Bidding Takeoff Software, Plumbing-Industry Specific Policies and Procedures (Human Resources, Safety Management, Employee Handbook, Training Manuals). Brand new marketing campaign, branding, and improved SEO increased traffic to the website by 45%.
The result was significantly higher revenues in 2020 when compared to the same time period in 2019 which is a big deal during COVID-19 pandemic. The owners but spent most of the profit increase to purchase more efficient and modern tools, improve working conditions for the employees, purchase inventory and hire and retain quality employees which was a challenge.
They are selling as they are moving out of the area, due to the life change, and want to re-invest in other opportunities. The sales price is below what they paid in late October 2019. The Sellers know, and the numbers show the company is in much better shape for the new owner than when they bought it.
PLUMBING AND HEATING Co
29 Year Old Colorado Residential/Commercial Plumbing and HVAC Company
The trailing 12 months earnings to February 28th were 130K from revenues of 1.4M. 2019 was a transitional year because of the sale in October so I don’t have a full 2019 PL or tax return. I do have the previous owners 2018’s PL’s which showed 201K in profits from 1.18M in revenues. They grew the revenues during Covid by 10%. This is usually the biggest concern for a buyer is growing the business. They have more work in 2021 than they have employees to do the work.
This company provides Plumbing and Heating services. They are 4.9 star Google rated and recognized as experts in Radiant in floor heating and tankless water heater systems which are part of a “hydronic heating system” popular in high end homes in the foothills and mountains of Colorado. 90% of new custom larger homes in their area use hydronic radiant heat. They provide maintenance and repairs also which helps with recurring revenues. This company provides both commercial and residential services for new construction or remodels. They have six full time employees including one master plumber whose license a new owner might want to use. They are still using the old owners license at a cost of $500/month.
The buyer will get approximately 125K in current value hard assets made up of equipment, vehicles, and quality, modern, and high-end tools. The company has a great reputation with a long-standing and recurring customer base. The book of business has grown by 50% both in custom home domain, and the service domain. Growth opportunities exist in fire-suppression systems, automatic shut-off valve systems, reverse osmosis and hard water filtration systems, and whole house humidifier systems. The company is a preferred provider for Xcel high-energy Rinnai water heaters and A+ rated Better Business Bureau establishment.
The owners are proud of what they have upgraded and the growth they have seen but want to sell to a buyer with knowledge of the plumbing and/or service industry.
Location: West Metro Denver Area.
The sales price has been set at 240K plus an estimated 15K in inventory because they want this to sell quickly to move on to other things. The Sellers will be keeping their cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free. It is an C Corp so this can be either a stock or an asset sale.