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Leading Midwest Solar Installation

CASH FLOW
$614,590

Specifications

  • Revenue
    $1,833,835

  • Cash Flow
    $614,590

  • Location
    Missouri

  • Service Area
    Missouri, Kansas, Iowa, National Potential

  • Profit Margin
    34%

  • Employees
    1 Ft, 1 PT as needed, 1099s hired as needed per project, based on location

  • Intangible Assets
    great reputation and referrals

  • Price
    $2,612,000

  • Down Payment
    10%

Providing exceptional solar design and installation in the Midwest area, this business is ready for growth and expansion.  With little overhead and high gross sales, this is the perfect business for someone looking to enter the solar business or expand current operations. 

 

This company currently focuses on the engineering, design, and installation of Solar Photovoltaic projects and are currently NABCEP Certified Solar Photovoltaic Installers.  The projects undertaken by this company are from inside sales, referrals, and subcontracting for other solar developers.  Installs have a 20% - 45% margin, making this a great revenue generating business.  With the bulk of the operations in commercial installation, there is room to expand into the agricultural and residential markets.  

 

This company has grown quickly since 2011 and they have installed over 100,000 individual solar modules for Midwest customers.  Longstanding relationships with distributors, subcontractors, and customers help show that this business has been providing quality work in the solar industry and is ready for a new owner to take it to new heights. 

Business Highlights

  • Year Established:   2011
  • Location:   Missouri
  • Service Area:   Iowa, Missouri, Kansas- Have experience in other areas and can travel and operate in other areas
  • Average Jobs Last Year:   20
  • Lease:   2 offices
  • Reason for Selling:    Other Ventures
  • Employees:   1 Ft, 1 PT as needed, 1099s hired as needed per project, based on location
  • Hours:   8:00-5:00 Monday-Friday
  • Seller Training Period:    3 months
  • Growth Opportunities:    Increase direct sales, Increase service area, Increase service contracts
  • Current Owner’s Responsibilities:   Sales, Project Management, Financial Management of projects

Financial Highlights

  • List Price: $2,612,000
  • Gross Sales:
    • 2017: $1,833,835
    • 2016: $1,062,845
    • 2015: $1,841,719
    • 2014: $2,416,097
  • Cash Flow:
    • 2017: $614,590
    • 2016: $332,745
    • 2015: $505,034
    • 2014: $546,388
  • Assets Included in Purchase*
    • Intangible Assets:   Great reputation and referrals
    • Tools and Vehicle:   $30,000
    • Upcoming Work:   $5,800,000
    • Potential Additional Work: $1,000,000
    • Average Sale Size: $100,000

*amounts may vary

Clients and Services

The direct customers are mostly business owners who are looking to take advantage of the tax credits and incentives available to save on operating costs such as utility expenses and taxes.  The subcontracting work is acquired through relationships with solar project developers in the industry.  This company has done work throughout the country and have a strong reputation for completing projects on time and at a fair cost.

Agriculture 

  • Project planning
  • Project engineering
  • Financial management of project
  • Small to large field installations
  • Small to large roof installations

 

Commercial & Industrial 

  • Project planning
  • Project engineering
  • Financial management of project
  • Large scale roof installations
  • Large scale field installations

 

Residential 

  • Project planning
  • Project engineering
  • Financial management of project
  • Small to large field installations
  • Small to large roof installations

Benefits to all areas include: lower monthly utility bills, increasing property value, tax credits and depreciation, hedging exposure to future electricity costs.

Employees

  • Project Manager - Electrician FT
    • Installation
    • Manages on-site crews
    • Service
    • Sales 
  • Master Electrician PT
    • Installation
    • Service 
  • 1099 contractors
    • Hired as needed per project for installation

Growth Opportunities

  • Increase Sales
    • Increase inside sales
    • Increase subcontracted sales
  • Increase Services
    • Residential
    • Agricultural 
  • Increase Service Area
    • Several nearby states not currently included in sales area
    • Would need to ensure you have licenses in states where you would like to operate 
  • Increase Service Contracts
    • Currently service contracts are a very small portion of revenue and could be increased

Valuation Details

The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business. 

The formula used is as follows:

Cash Flow       x          Prescribed Multiple =          Fair Market Value

Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.

A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.

For this business, a 2017 Cash Flow was used with a prescribed multiple is 4.25.  With this information, the computation is as follows:

$614,590         x          4.25     =          $2,612,008

The Fair Market Value found above positions the business List Price at $2,612,000.

Funding Example

Purchase Price:                    $2,612,000

10%Buyer Down Payment:   $261,200

10%Seller Financing:             $261,200

80%Bank Loan:                   $2,059,600

Seller Financing 5-year term at a rate of 4.5% equals a monthly loan payment of $4,870.

Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $30,526.

After business expenses and loan payments, a buyer with a 10% down payment of $261,200 would retain a profit of $189,843, which results in a 72% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $2,612,000 with the terms listed above, the coverage ratio is 1.45. 

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.  

Purchase Price:

$2,612,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

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:
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

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: %

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210 N 78th St. 2nd Floor
Omaha, NE 68114

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The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.