Opportunities
Passive Commercial Surveillance Company
Great work-life balance- current owner lives out-of-country part time!
Specifications
This opportunity is perfect for someone looking for a passive business. The current owner of this well-established commercial surveillance company lives out of the country for 4-6 months each year and the new owner can expect to do the same after the training period. This company installs popular surveillance systems for businesses in the Northern California area. A new owner will benefit from multiple growth opportunities: this business has great potential to expand into the residential sector if desired or operate as-is and enjoy an excellent return on the low down payment of $27,500!
They are increasing installation of temperature scanning cameras and video monitoring, expanding to vertical markets (fire alarm installation, smart home systems, etc.) and adding government and municipal contracts would be perfect opportunities for revenue growth.
- They are well-known in Northern California
- 80% of sales is in the San Francisco Bay area, 15% regionally, and 5% of their business is nationwide.
- Highly experienced team with everyone on the team having a 4+ year tenure
- Uses advanced tech like secure wireless camera networks, license plate capturing cameras and Point of Sale surveillance systems
The owner currently handles general oversight of the business and lives out of the country 4 months out of the year. The team is standardizing their service contracts to include both remote support and hands-on support, with an obvious preference for services they can provide remotely. Their camera systems offer real-time surveillance and video monitoring to ensure real-time protection.
Business Highlights
- Year Established: 2008
- Location: San Francisco Bay Area, California
- Service Area: San Francisco Bay Area (80%), Regional (15%) and National (5%)
- Services: Installation of surveillance systems
- Clients: Primarily commercial: apartment complexes, HOA’s, hotels, strip malls, restaurants, hospitals, etc.
- Building: 500 sq. ft. office space – low overhead
- Reason for Selling: Semi-retiring – lives out of the country part-time
- Personnel: 5FT: 1 Owner, 1 Operations Manager, 2 cable installers, 1 IT staff + 1 PT bookkeeper
- Seller Training Period: 6-12 months
- Growth Opportunities: Increase installation of temperature scanning cameras and video monitoring, expand to vertical markets (fire alarm installation, smart home systems, etc.), add government & municipal contracts
- Current Owner’s Responsibilities: Oversight; lives out of the country 4 months out of the year
Financial Highlights
- List Price: $290,000
- Equipment: Drills, drivers, hammer drills, ladders, crimpers, wire cutters, pliers, screwdrivers, stapling equipment, conduit benders, cable testers, camera testers, laptops
- Vehicles: 2013 Ford Transit
- Intangible Assets: Well-known in the area, word-of-mouth referrals, well-established relationship with local law enforcement
*amounts may vary, assets may be depreciated, replacement cost, or fair market value
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2021 | 2020 | 2019 | 2018 | 2017 | ||
| GROSS SALES | $305,877 | $337,635 | $564,886 | $423,204 | $429,302 | |
| Net Income Shown on Financial Statement | $-72,604 | $-19,758 | $38,793 | $20,823 | $11,127 | |
| ADDBACKS | ||||||
| Compensation to Owner | $75,000 | $60,000 | $60,000 | $60,000 | $60,000 | Business can run without a replacement |
| 11% Tax on total W2 Salaries | $4,773 | $6,600 | $6,600 | $6,600 | $6,600 | |
| Depreciation | $0 | $12,292 | $20,591 | $3,108 | $4,862 | |
| Interest | $1,314 | $1,974 | $890 | $92 | $3,274 | |
| Dues/Subscriptions | $95 | $120 | $120 | $120 | $2,400 | $200/month for gym membership |
| Cell Phone | $2,400 | $2,400 | $3,267 | $3,208 | $2,631 | $200/month |
| Meals & Entertainment | $667 | $100 | $486 | $151 | $257 | |
| Auto Expense | $11,177 | $7,183 | $12,928 | $12,182 | $11,293 | 50% personal $6,050 Tesla lease, fuel for the Subaru (paid off), Auto Insurance |
| Health Insurance | $4,638 | $0 | $3,924 | $3,889 | $3,938 | |
| Simple IRA | $0 | $0 | $15,000 | $0 | $0 | |
| Miscellaneous | $0 | $0 | $20,000 | $1,096 | $20,000 | Money paid to self |
| Home Remodel | $0 | $0 | $0 | $20,000 | $0 | In COGS - one-time expense |
| Travel | $3,400 | $1,767 | $2,395 | $841 | $867 | |
| Personal Coaching | $475 | $4,098 | $0 | $0 | $0 | |
| Fees for Sale Prep | $8,125 | $0 | $0 | $0 | $0 | |
| TOTAL ADDBACKS | $112,064 | $96,534 | $146,201 | $111,287 | $116,122 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $39,460 | $76,776 | $184,994 | $132,110 | $127,249 | |
| Profit Margin | 12.90 % | 22.74 % | 32.75 % | 31.22 % | 29.64 % |
Clients
- Apartments/HOA’s
- Retail/restaurants
- Healthcare offices
- Grocery stores
- Warehouses & Industrial Parks
A/R is automated, allowing customers to make payments on a recurring basis.
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Installation and Maintenance of Surveillance Systems
- Recently added cameras that are powered by solar-charged batteries and communicate with 4G cellular. This incorporates the cell service into the plan which is a necessary expense that they mark up and pass through the customer. Solar batteries need little attention and they would come onsite to do that work, but since they are charged with solar, the team does not need to do much maintenance. It is monitored remotely.
- Partnering with an IT firm that provides high-definition video monitoring and costs $1k/month; that IT firm then monitors the clients’ videos.
Personnel
- 1 Owner
- Oversight*
- 1 Operations Manager/Estimator
- 1 full-time IT Technician
- 2 Cable Installers
- 1 PT Bookkeeper
- Subcontractors as needed
*This company is being set to run remotely. The owner currently has little-to-no customer contact. His Operations Manager writes bids which he will look over only if required.
Growth Opportunities
- Increase service contract sales
- Expand into vertical markets (fire alarm installation, smart home systems, etc.)
- Video monitoring
- Temperature scanning cameras (COVID-19)
- Adding government and municipal contracts
Funding Details
Business:
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
Loan Payments
| Monthly Payment to Bank: | $ |
| Yearly Payment to Bank: | $ |
| Monthly Payment to Seller: | $ |
| Yearly Payment to Seller: | $ |
| Total Monthly Debt Service: | $ |
| Total Yearly Debt Service: | $ |
Conclusions
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|
Cash Flow: 2020 Cash Flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2020 Cash Flow |
$ |
| Annual Debt Service: | -$ |
| NOI: |
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
| Down Payment: | $ |
| NOI: | |
| ROI: | % |
Attachments
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