REAL ESTATE STAGING COMPANY

The sales price is $445K.  This is an S Corp and the Seller prefers an Asset Sale but will consider a Stock Sale.  In either scenario, the business is being offered with the Seller keeping her cash, AR, and AP which are not large balances and transferring the business debt free.  85% Recurring revenue from long-term customers is very valuable.   This should qualify for a bank loan for a qualified buyer.


Details:

Growth Opportunities: The Seller has identified many ways to grow this company:  See the video to hear this from the owner.  1) Adding a sales person who is compensated by new stagings who only has to call realtors and have he or she look up their Houzz page and rating.  A very warm call.  Most realtors use a staging company. 2) Switch to working for a % of the sales price which is happening in some of the biggest markets in the country.  Basically, a price increase.  LA is getting 1% on some of their higher end properties and this company is high end.  3) Work longer hours.  The owner has pulled back a lot over the last 3 years and does not sign up new stagings when she is on vacation.  A good right-hand person would really help grow the business and allow the business to capture more business in real time.  4) Changing the address to a more central Denver address even if the warehouse stays in North Denver.  5) Different landing pages on the internet all feeding into the main website that feature different areas of Denver Metro/Boulder/Longmont/Loveland, etc.  Plus millennials are entering the market, Generation X is upsizing, and baby boomers are downsizing there is a lot of movement in the market.  Home staging has an increasing need and is still a growing industry which is expected to stay that way even if the market cools at some point.

This business is fully capitalized and does not have to turn down work from a lack of inventory.  This will change as the business grows.  The owner also upgraded her inventory in 2016 and added/replaced select inventory.  If the Buyer needs more room eventually, it would be easy to find warehouse space wherever they would like.

The owner has 4 hourly employees that make between $17/hr and $20/hr 2 of which are W-2 payroll and 2 1099 and not on payroll.  They are paid hourly and only scheduled when needed.   When the owner is on vacation there are no new revenues being added.  I could easily  add back 2 weeks per year but because they were only a week at a time, I am not be sure that the impact is exactly the same as adding back a weeks’ worth of estimated adjusted earnings(not revenues).  2017 was different, the owner went on vacation for exactly 4 weeks and spent a lot of time preparing.  I will only add back the 4 weeks for 2017 on the adjusted earnings spreadsheet(in the data room).  The weeks were from the last week on March to the end of the third week in April which is literally the busiest time of the year for new listings and therefore staging’s.  The owner missed out on at least $32K in revenues and based on a conservative estimated adjusted profit with variable costs deducted would be $18,000.  I did not add the 32K to the revenues on the top line because if would have flowed to the bottom line incorrectly because the variable costs would be missing.  Please assume that 2017’s revenues really should be just over $300K because of those 4 lost weeks of sales.  Please also consider the fact that the owner has slowed down this year spending more time out of the office and has never worked so few hours.  The owner has offset this by using 2 hourly employees for each staging to set up and to take them down which has saved money.  In the past, the business used up to a six team members for staging installations, however with efficiencies, standards and in depth training, two employees can accomplish the same amount of work.  I did not add an add back for the current owner pulling back on the time spend at and on the business but you can draw your own conclusions after meeting or talking to her/him.

They have a great reputation for the quality of work, dependability, accurate bidding, and for fair dealings.  The seller will agree to full Reps and Warranties to a solid legal and business standing.   They have a great record for safety (OSHA) and NO legal battles.  This is a clear indication of how well run their business model is.  In fact, the seller will offer  “to off-set” against the sales price for any liabilities originating before the closing and indemnify their financials.

Their location is on an annually renewable lease.  It is 4,500 square feet with two full bays for loading and unloading that have garage doors that open providing access to the inventory.  I need the non-disclosure to give you more details.

The buyer will also step into a solid pipeline of 85% plus percent of recurring revenue with a very high gross profit margin and a very valuable operating model and reputation.  The buyer will have a normal amount of work on the books at the closing.  2018 should be a great year with many ways to further grow this company.

Plus, Colorado is the best State in the country to own a business.  Colorado is #1 for Economic Growth in the US says US News and World Report.  See article here: https://www.usnews.com/news/best-states/rankings    This article ranks all 50 states by eight economic measures including GDP growth, housing prices, job creation, and exports. Also, Area Developers Magazine ranked Denver the #1 growth opportunity in the country in June of 2015.  Check out the articles in these links also:  https://www.metrodenver.org/research-reports/economic-forecasts/2017-economic-forecast/   and rated Denver #1 for leading locations for economic strength indicators and eighth for both workforce and recession-busting attributes:    https://www.imfromdenver.com/denver-no-1-on-u-s-news-best-places-to-live-list/?utm_campaign=shareaholic&utm_medium=facebook&utm_source=socialnetwork   https://www.bizjournals.com/denver/news/2015/07/15/denver-rated-no-1-in-u-s-for-economic-success-3.html  The Denver-Aurora-Broomfield metro area was rated first among the 375 metros.  Here is Area Development’s top 10 U.S. “Leading Locations” for 2015: 1. Denver. 2. Houston. 3. Grand Rapids, Michigan. 4. Greeley. 5. San Francisco. 6. San Jose. 7. Seattle. 8. Columbus. 9. Boulder. 10. Austin.