Business for Sale, Would I Buy It? | Metal Roofing Manufacture

In 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.

Video Transcript: 

Alright in this edition of the “Would I Buy This Business” series we’ve got a metal roofing manufacturer on Hawaii. So interesting right off the bat as a manufacturing business really anywhere in the US is sort of an anomaly, but one in Hawaii one of the most expensive states to live in is an interesting concept. That said roofs are big and heavy so maybe it makes sense. You make them close to where you’re putting them on. And Hawaii is in a unique situation you’re not gonna get competition trucking in roofs from other states or other low-cost manufacturers. So maybe it makes sense, so let’s look at the numbers. They are asking 1.29 million, gross revenue is 1 million – 1,072,512 which is good that they’re using real numbers. And then cash flow 338,000 [338,676]. So the price is about three and a half times the cash flow which is not a crazy number. It’s maybe again a little high for the headaches of doing business in Hawaii but not a crazy number. It does tell me though that if their gross revenue is a million bucks basically and their manufacturing roofs at manufacturers price maybe $20,000. So they’re doing 50 roofs a year something like that, maybe less if they’re bigger roofs. I don’t know but it definitely sounds like a pretty small operation. 

So let’s see if what they’ve got to say about it. Great business, focus on manufacturing metal roofing and tiny homes. Hmm, that seems like two different things. Metal roofs is one thing, tiny homes is something else. Not sure how they’re doing both of them out of one business or how much is roofs and how much is tiny homes. Grown market sharing continued upside as they begin shipping inter-island. So this isn’t even 50 roofs all in one island, they’re apparently shipping it between islands. I wouldn’t have thought with that small volume they would have even do that. Okay, one-stop shop for their entire roof order. business is focused on this. Customers don’t have to deal with associates. A team of highly experienced metal roofing staff. 

So I don’t know it seems like you know it’s a small business, maybe there’s potential to grow it. Maybe that one of the benefits is you get to live in Hawaii, which would be nice. Although it’s again expensive place to live with some of its own headaches being there. But the good news in being in a geographically isolated place like that is there’s probably not gonna be five more metal roofing companies that will open up and compete with you in that space. The downside is if you get all of the market there’s not much left to get cause you’re not gonna ship your roofs all the way from Hawaii to Japan or California. So you have to expand into other avenues. And then the conflict between it’s listed as a metal roofing business but then they’re talking about tiny houses. So I would be a little concerned about what is it there that they’re building, what are they focused on. Is their attention split? Should it really be two different companies or as one of them not really much of a much of the process? And then if they are then why are they doing it? So I would look into those things but the price is reasonable, the cash flow is pretty good from the business, and the upside is you get to live in Hawaii. So well, if that’s your thing and that’s what you’re looking for this could be a good business.