In This Issue
FEATURED
CLIENTS
Specialty Marketing Service
#815
This Southern Colorado business is a highly respected marketing company and an industry leader in the Southern Colorado market. It has a long history of success and a steady, consistent, and diversified base of loyal clients. The company has evolved over the years to become a one-stop shop, not only through its online presence, but also with its top-notch publication. With its customized, proprietary web-based software, clients are able to obtain the services of this company throughout the United States, offering the new owner a huge opportunity for growth. Another area of growth could be to add complementary services, such as social media and SEO. There is a sales and marketing team already in place and management has recently embarked on a new initiative to expand the company's reach into additional proximate markets.
Purchase Price..............TBS
Down Payment............TBS
Gross Sales....$1,533,212
SDE............$617,847
For more information,
contact Lynn Lage
Well-Known Bakery/Deli In The Pikes Peak Region- SALES ARE UP!
#2814
This opportunity opened for business in 2006. It is located in a beautiful bedroom community with just a short commute to a major city in southern Colorado. With beautiful views and a casual dining atmosphere, it serves locals and tourists alike for breakfast and lunch on a regular basis. Located on prime, main street frontage, this establishment has a seating capacity of 34 inside and 45 outside. This bakery and deli is well-known for its superb dishes, and is popular among the local businesses for its catering services and customized menu offerings. Management believes that culinary experience is not necessary to ensure a smooth transition, as the sellers are committed to training the new owner. This business should make an ideal acquisition candidate for a hands-on owner/operator looking to capitalize on this established landmark. Down payment assumes buyer qualifies for a new SBA financing.
Purchase Price........$165,000
Down Payment.........$41,250
Gross Sales.....$494,007
SDE............$94,890
For more information,
contact Kim Hoyal
55-Acre Colorado Mobile Home Park
#113
The Ellicott Acres Mobile Home Park is a unique community located in the Colorado Springs, Colorado area. The attractive property encompasses 55 acres with only 22 lots/home sites. Each lot is 2.5 acres, providing for open spaces and low density. Most of the tenants own their own home, so there is very little turnover. There is an opportunity for additional income with several sites still available to rent. Net Income for the first three months of 2015 was $16,967 on gross rents of $20,890. With additional new tenants moving in, the net income for 2015 is expected to improve even more.
Purchase Price........$550,000
Down Payment.......$165,000
Net Oper. Income...$56,475
Gross Rent. Incom..$67,325
For more information,
contact Ron Brasch
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Quick Links Current Schedule of Businesses For Sale
Confidential Purchaser Profile |
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THE FBB GROUP, LTD.�
719-635-9000
800-395-7653
Email: fbb@fbb.com
www.fbb.com
 
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Although this year has been the exception, buyer activity typically slows down during the summer, and picks up with intensity after Labor Day, as the vacation season ends and buyers realize that there is still time to complete a transaction before the end of the year. In anticipation of this increased buyer activity, our firm is actively engaged in bringing additional businesses to market. During this process, we find out the good, the bad, and sometimes the ugly about some clients and potential clients. The issue of customer concentration falls within this rating system and is the topic of this month's article.
The Good: A large, highly diversified customer base(both geographically and industry types), with many small customers and no customer accounting for more than a few percentage points of total sales or profitability. This can add value to a business. It not only reduces the risk to a buyer and lender in the event after customers no longer elects to do business with the buyer, but it can be very attractive and worth more to a buyer that can sell additional products to that existing customer base. An e-commerce business might be an example of this type of customer profile.
The Bad: Customer concentration usually does not become an issue as long as no one customer accounts for more than 10% of revenue or profit. It may also not become a problem within the 10% to 20% range, depending on trends, relationships, contracts, etc. When the customer concentration gets above 20%, it usually generates a conversation from the buyer, the buyer's advisors, or the lender relating to the management of the risk to the buyer. A manufacturer of automotive parts might fall within this category ,as there may only be a limited number of potential customers.
The Ugly: When there is a customer that accounts for 50% or more of the business' sales or profits, the perceived risk to the buyer or lender increases to a point that the customer concentration becomes a significant part of the negotiations. Most business owners are aware that customer concentration is not ideal, but economic circumstances may come into play, such as when a good customer is growing and continues to absorb the production output of the business. Dealing with a good customer that pays on time and is easy do deal with can become a path of least resistance and a trap for the unwary. We often times will see this when the owner has done well and does not have the energy or motivation to diversify the customer base. A subcontractor for a large home builder might fit this description.
The problem of customer concentration can be mitigated if it is addressed in advance and through a variety of risk sharing structures.
The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.
Sincerely,
Ronald V. Chernak President Inspiring business relationships since 1982! |
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