Thinking about buying

Newbie here and I’m hoping that those with experience would be kind enough to help me out.

I am considering the purchase of an existing residential and commercial tint company in a nearby city. It appears to be a well-operated business generating a little over $500K of revenue per year. Revenues are evenly split between commercial and residential. I have signed off on confidentiality so I am not at liberty to provide any specific details regarding the business.

My primary concern lies with the area’s new housing slump. I perceive that a significant amount of residential demand comes from homes that are one to two years old. I fear this new construction downturn will cause a substantial negative impact on the business for the next several years.

Would you agree or disagree with my concerns?

That is exactly what you should be concerned about. Why is this business for sale?

yup why is he selling a sucessful half million dollar shop!?! make sure hes still has a rep. name in the area.

I would question the value versus the investment cost as my initial concern.

Their equity would seem to be based on their reputation current brand awareness, market share and their personnel.

The key issues are in this business:

1. Can you sustain the current personnel?
2. The brand's distributor, manufacturer: Can you get a firm promise that they will not set up competitive dealers with the very same product?
3. Repeat business and word of mouth is a key component of your investment. How is that company perceived in the marketplace?
4. Who are you competing against?

Now concerning the economy.

When things are soft the typical window film company hunkers down. They limit ads, reduce YP, fire sales people, reduce installation crews, and lower their price points.
They sell a little, make a little and hope things will improve.

If you are conservative this might work.

On the other hand, this may be the very best time to dominate.

My opinion based on personal experience is:

Thanks to the nature of this business and the limited dealer protections, rights, trust between MFg , Distribution and the dealer. .a window tinting company has very little resale value.
I wish it were otherwise.

Rather than buy that business, simply consider opening up your own new shop. 1/10th the initial investment and grow your own reputation.

That's just my opinion. .

If your buying the bussiness you must know the value of what your buying. Most often I see film companies sell for the wholesale cost of film in stock, half cost of tools, market cost of truck and everything else is the free bee that makes it worth buying. there maybe better way to evaluate, but this it seams is common. THIS GIVES THE EXCEPTION TO A RETIRING OWNER SELLING TO THE CURRENT INSTALLER as the installer will not quit on himself and they will know if the old owner is ready for some island in the middle of nowhere or if he just bought a nice new building in the next town over!