Bussiness for Sale, Would I Buy It? | Limo Services

Alright, in today’s version of “Would I Buy This Business”, we have an established limo and coach service company available. so let’s look at the stats. For starters, they’re asking $2.9 million. Gross revenue is [$1,773,428]. And cash flow is [$554,825]. So it’s about 33% profit, which is pretty solid. And I’ve always thought these kinds of businesses can do well. The challenge is always keeping them fully booked, right? So if you have five limos you want those driving around all the time. Not just for proms and bachelorette parties. You want them busy as much as possible. So rides to the airport, executive meetings, things like that. But if you can keep them fully utilized then you can charge quite a bit. And the cost of driver and fuel and insurance isn’t that much. The cost of the vehicle isn’t that much. So it looks like this company is doing pretty well. They’re in Maryland so maybe there’s a lot of government and executive types there that are using the limo service. So, in general, I like the business model. And this one seems to be doing pretty well. What I don’t like about this one is the price. They are asking almost six times, five times the cash flow. For this size business and for the profit they have and the level of uniqueness and defensibility of this, that just seems like a significantly higher price than is warranted. And at that high price is gonna make it tough to be able to borrow to buy this business. And I don’t think they’re gonna find somebody to buy it at that price who isn’t borrowing money to do it. So I don’t think that asking price is gonna work out for them. I think a more reasonable price would be around 1.8, something like that. I think that would work. I think you could borrow, you could pay the loan and still have a reason to return on your investment. Anything over 1.8 though starts to just get too expensive for the size deal. And for the uniqueness of it, it’s not you know anybody can go out and buy a nice car and start their own limo business pretty easily. So there’s nothing truly unique about this one. So I like everything about it but the price. The price would have to come down before this would make sense.

More about this series, CapForge’s owner and founder gives us a little behind-the-scenes on what a good or bad business would be. CapForge helps tons of clients either buy or sell business and Matt was a business broker before starting CapForge. Let’s look at some of these businesses up for sale and see if Matt would be interested in buying them.