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Details

May 11, 2019The Company has grown thanks to its high-quality work, that centers around providing expert powder coating for select hardware manufacturers.

This 35-year-old business has built a strong customer base, developed a reputation for consistently high-quality, reliable services at attractive prices. Approximately 300 customers served in the past 5 years.

The Company has long-established relationships with top raw material vendors giving them inside information, years of knowledge and excellent bargaining power. Raw materials inventory requirements are very low. But initial space and equipment are not, making this a high-barrier entry business for those thinking about starting from scratch.

However, as an essentially service-oriented business, margins are attractive and grow each year.

Detailed Information

Core competence is - quality, cost, delivery. The process for each order includes:

Pre-treatment=>pre-inspection=>apply powder coatings =>final inspection & packaging.

AQMD license is available and transferrable.

Inventory is included in price.

Facilities: The entire building is approximately 30,000 sq. ft. The business leases a portion of the building to sub-tenants, so the effective rent is only $7,118 per month. This provides some flexibility for future expansion without relocation.

Competition: There is competition from local providers, but top competitors have their own specialties and usually different customers, and this Company is differentiated because of their focus on quality, cost and delivery, as well as long term relationship with customers/suppliers.

Also, the industry has high barrier to entry due to the high initial capital investment to meet equipment requirements.

Growth & Expansion: Sellers are not savvy marketers. This becomes a growth/expansion opportunity if a new owner can increase marketing efforts overall and master online marketing opportunities as well as establish/grow social media platforms.

Financing: If the price and deal structure is right.

Support & Training: 4 weeks at 20 hours per week.

Reason for Selling: Retirement. The Sellers are willing to comply with non-compete terms for 10 years and over a geographical area of 100 miles.

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