Metro Denver Electrical Co
10-Year-Old Electrical Company, comprised of 25% Commercial & 75% Residential
2023’s revenues were 807K, which were over 50% higher than 2022’s with earnings of 217K, which were over 80% higher than 2022. This is important since the seller does almost no advertising and doesn’t currently have a website. This is priced below 2.35 times the earnings plus a small amount in inventory. The “master” electrician, who is also the owner, is amenable to the new owner leasing his Master's license post-closing.
The company provides a full range of electrical services, including restoration, mitigation, whole house/remodeling and new wiring, with 28% service calls. The company is emphasizing maintenance contracts to increase his percentage of recurring work. These contracts are not signed and enforceable but are meant to motivate customers to call them for their future electrical needs.
Growth Opportunities: The company is presently a Google 5-Star-rated company but doesn't have a website. Setting one up will better take advantage of the company's 5-star Star Rating. The new owner can further do pay-per-click, search engine optimization, trusted 3rd party referral sources like Angie and Houz, social media, and online advertising, and can pursue high-profit margin electric vehicle charging residential installs. The owner also thinks that the new owner should add more high-margin service calls, including emergency work and the further development of LED retrofits for both wall packs and parking lot lighting. Other possibilities exist in reaching out to real estate agents and insurance agents to get more mitigation and restoration work from insurance companies. The current reality is that there is a shortage of employees for the service industry and if the new owner can find additional high-quality, loyal employees to complement the existing staff and set up a website, then the work will find them. Electricians are in high demand in Denver based on the number of commercial and residential developments, remodels, and service calls. This has been taking place for over 20 years, and there doesn’t seem to be any reason for it to stop based on the slow but steady increase in both population and wealth.
The owner is a master electrician and spends most of his time in his home office, but he also goes in the field for business development and the estimation of new jobs. The current job demands are approximately 35 hours a week. The company uses a QuickBooks-based estimating and customer tracking program. The use of QuickBooks (QB), already populated with a complete list of products and services, has automated many of their bids, material purchases, and work performed for common installations and services. This QB-based system can be used to track all job costs & profits, invoicing, job history, etc., as well as inventory controls. The technicians also use the QB mobile app for time tracking, materials, & job notes. This platform can be taught to the new owner relatively quickly by the owner or by the readily available (and free with a subscription) QB online training videos. The company has 4 employees, including 1 journeyman electrician, 3 electricians, and the owner.
The current owner is amenable to leasing their license for up to 2 years to the new buyer if he/she needs it. The owner believes all employees are happily employed and will remain with the company after the sale. The employees are all very loyal and hardworking individuals who get along and will continue to be valuable assets for the new owner.
The buyer will get 111,500 in current-value assets made up of 4 vans, along with other assets including large equipment, small equipment, office equipment, tools, and approximately 15K in inventory.
Location: The owner works out of their house with storage units, which are used as staging areas. The company lets its employees take their vans home, which helps to facilitate this structure. The new owner can run the business from wherever they want to run it.
The sales price was just lowered from 485K plus inventory to 425K plus inventory, which is estimated to be 15K. This is a below-market multiple of the earnings. This will likely be a traditional asset sale, with the seller keeping the cash and accounts receivable and paying off all debt, including the accounts payable, so that the business transfers debt-free. This will qualify for an SBA loan for a qualified buyer with an anticipated down payment of $43,000 for the bank and proof of some working capital.
Details:
They specialize in high-end electrical contracting of all types. The company has grown historically based on their reputation through a steady, long-term increase in referrals along with steady reputation building in their market.
The owner is proud of the company’s success and reputation but has decided to sell for quality-of-life reasons to spend more time with family. They will help the new owner transition the business for as long as the new owner needs it and is confident that it will be a smooth transition. The new owner will also have a team of loyal, trustworthy, competent, and reliable employees to help them learn and grow the business.
The broker is available at any time to discuss your interest in this offering.
Thank you for your interest.
