Commercial Tile Contractor in Texas
Little to no overhead – all labor is outsourced!
All labor is outsourced for this commercial tile installation company, keeping fixed cost on labor and overhead incredibly low! Clients include General Contractors and Construction Managers, and currently the work is primarily for service stations throughout Texas. There is one part-time W2 employee (the owner’s spouse), who works approximately 10 hours/week from a home office doing estimates, purchasing, coordinating deliveries, scheduling installations with the labor force, and bookkeeping; all labor is subcontracted out. Sales could easily climb into the $2M-$3M range by actively submitting more bids, expanding the product line to include other types of flooring, pursuing work in schools, grocery stores, retail stores, and entertainment/restaurants, and by tapping into the residential market. Service station tile contracts generally run anywhere from $20k-$120k. The company currently has 10 projects on the books worth approximately $238k; the average project takes 7 days to complete.
This business is not consumer-based, so there was no COVID impact on sales – clients did not put a moratorium on construction projects. The company does advertise in the Blue Book, which gives them requests for bids via email – they currently have nearly 20 open bids, along with the 8 projects in progress.
Priced at $726,000, a 10% down payment of $72,600 returns $120,083 in the first year after debt payments – a 165% return on investment! With long-standing relationships already in place with General Contractors in the area, a new owner could take this business to the next level. The current owner bought the business in 2015, when sales were $250k and grew revenue to $3.5M by 2018, with at least 5 bids per day and a much larger client base, proving that this business is capable of tremendous growth. They intentionally downsized the business in early 2019 (semi-retirement) and chose to keep sales in the $600k-$700k range. The company has seen sales in $3M range in the past and could easily reach those heights again under new ownership.
Year Established: 1950
Location: Houston, Texas
Service Area: Statewide
Services: Commercial tile supply and installation
Clients: General Contractors & Construction Managers
Lease: Home office; low overhead
Reason for Selling: Retirement
Personnel: 1 PT W2 employee (10 hours/week; estimates, purchasing, scheduling installations with labor force, bookkeeping) + 1 primary subcontractor
Seller Training Period: 6 months
Growth Opportunities: Bid more work, expand the product line, implement marketing strategy, create n internet presence, tap into residential market, pursue retail, schools, grocery stores, etc.
Current Owner’s Responsibilities: Owner is absentee; spouse is PT employee
- List Price: $726,000
- 2020 Cash Flow: $213,702
- 2020 Profit Margin: 30%
- A/R: $91,202
- Work in Progress: $238k
- Intangible Assets: Great reputation for customer service, low overhead allowing for competitive pricing, long-standing relationships with GC’s
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement|
|Net Income Shown on Financial Statement||$187,690||$-10,195||$-13,267||$155,208|
|Compensation to Owner||$0||$0||$0||$31,000|
|11% Tax on total W2 Salaries||$0||$0||$0||$3,410|
|Meals & Entertainment||$877||$734||$187||$1,399|
|Insurance Premiums for Owners: Health, Life, Auto||$2,434||$2,434||$2,434||$0|
|Management Fee||$0||$68,500||$629,076||$422,000||Paid to owner|
|Employee Benefit Program||$17,586||$0||$0||$0||Benefits to Owner|
|Seller's Cash Flow = Total Addbacks + Net Income||$213,702||$72,140||$654,943||$623,684|
|Profit Margin||29.86 %||11.88 %||18.78 %||27.34 %|
- Owner bought the business in 2015, when sales were $250k (previous owner had intentionally downsized) and grew the business to $3.5M by 2018.
- In 2019, owner made the conscious decision to downsize the business and transition into semi-retirement. They slowed their bidding activity down and are currently working with 3-4 of their clients.
- Expand the product line to include more types of flooring
- Implement marketing strategy
- Create an internet presence
- Tap into residential market
- Pursue work in different sectors – retail, schools, grocery stores, restaurants, etc.
Offer Price: $
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Omaha, NE 68114
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