Business for Sale, Would I Buy It? | Wealth Building Roofing Contractor
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, so in this edition of “Would I Buy This Business”, what has come up on the radar today is a top 3 roofing contractor in booming NWA. Is that North Washington? I don’t know NWA. They say it – they write it like I’m gonna know. Maybe I should, but I don’t know what NWA is in terms of geography. So let’s look at the stats. The asking price $2.95 million, sales $3.86 million, cash flow $1.15 million. So okay, the price sounds good with the cash flow the cash flow. 30% maybe of the revenue. That sounds pretty solid, you know, the numbers make sense. Let’s say best-in-class online presence with 300 Google 5-star reviews, cool. Established only in 2018, so it’s only now six years old which is a little soon to be selling a business like this seemingly. Unless you know, he’s started a new business and now is ready to retire. Started late in his career and then is ready to retire. I’m only assuming it’s a he, could be a she, whoever started it. And apparently, NWA is Northwest Arkansas. Did not know that. Award-winning contractor specializes in residential roof replacement and insurance claims. Also gutter repair and installation storm damage. It ranks third amongst competitors in terms of online reviews and visibility. I don’t know if that really means it’s third. Ranking online third isn’t necessarily mean you’re third but let that go. Business currently installs four to five roofs in an average week and gets busier to eight or nine roofs during the summer. Effectively 100% of annual revenue comes from residential roof replacements. I don’t know why they mention those other services then but whatever. Average job size is 20,000. Industry itself is somewhat cyclical.
Okay so roofing is one of those businesses that, you know, you’re – it’s always gonna be around. It’s not gonna be replaced by robots. You’re not gonna buy a roof off of Amazon. Or AI is not gonna probably disrupt the roofing industry for a while. It’s the kind of business that it doesn’t take much for somebody to get started in. So you’re always gonna have competition from fly-by-night guys. But if you can get established, build a good reputation, develop an online presence, get your brand name out there, you can do definitely very well with it. And sounds like this business has done that. Not sure why they’d wanna be selling after just basically 5 years in 6 years now. But as long as the answer to that question makes sense and if this is a trade that you’re interested in getting into, the price seems right. And if you were to buy it, you know, when you got a 20-year career ahead of you, you could do very well with this business. Grow it. Sell it at the end of that time to someone else who wants to get into the business. And you know, have really life-changing wealth out of a business acquisition like this. If you can swing the price today, generally with an SBA loan you’re looking at needing about 10% down plus some working capital. So if you can get together about, you know, $350,000 you could acquire a business like this cash flowing over a million a year today. Keep growing it and do very well for yourself. So the business that I’ve looked at lately, this is definitely one, if I was interested in the roofing business and I was in the NWA area, I would certainly put this one on my radar to check out further.
