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Owner-Operator Flooring Business in Chattanooga



  • Price

  • Revenue

  • Cash Flow

  • Down Payment

  • Multiplier

  • Location
    Chattanooga, TN

  • Lease

This commercial flooring contractor in southeastern TN has been performing wholesale and installation work for over 30 years.  There is a large selection of flooring products including the latest style, colors, and fashions.  They specialize in carpet, hardwood, and tile, and are a well-known and respected part of the community. 

The current owner subcontracts out all of the labor, while his son does oversight of the subcontractors.  Both the owner and son would be willing to stay on for an undetermined amount of time to ensure there is a secure and successful transition into the next era.

The growth opportunities are nearly endless as there is zero advertising being done currently.  They have also discussed adding larger contracts to their list of clients but haven’t quite made it there yet.  Another great way to grow would be to add a few sales people to the payroll to help increase the daily flow of business. 

This is a wonderful small business just waiting and ready for the next owner to take it to another level!

Business Highlights

  • Years in Business:  30+ 
  • Location:  Chattanooga, TN
  • Clients:  Commercial clients
  • Services:  Carpet, hardwood, and tile
  • Building:  1,400 sq. ft. warehouse and 1,000 sq. ft. office
  • Lease:  $1,000/month – month to month basis
  • Employees:  Work is subcontracted out
  • Seller Training Period: 3-6 months
  • Growth Opportunities:  Advertising; larger contracts; bring on sales people
  • Current Owner’s Responsibilities:  Owner/operator

Financial Highlights

  • List Price: $220,000
  • Gross Sales:
    • 2017: $648,445
  • Cash Flow:
    • 2017: $80,640
  • Assets Included in Purchase*
    • Equipment: $13,192
    • A/R: $18,629
    • Intangible Assets: Reputation and personal relationships built around the business

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnNotes
GROSS SALES$648,445$973,930$408,692
Net Income Shown on Financial Statement$49,796$-25,352$22,549
Auto Expense$10,878$25,912$5,158Personal expense
Meals & Entertainment$1,123$1,880$2,51190% personal
Guaranteed Payments to Owner$7,000$18,489$0Paid to owner
TOTAL ADDBACKS$30,844$61,312$18,379
Seller's Cash Flow = Total Addbacks + Net Income$80,640$35,960$40,928
Profit Margin12.44 %3.69 %10.01 %
  • 12% profit margin


  • Wholesale and installation of carpet, hardwood, and tile flooring

Growth Opportunties

  • Advertising
    • No advertising is currently being done
  • Larger contracts
    • Current contracts are maxing out at about $155K
  • Hire sales people
    • Current owner is the only sales person

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 2.75.  With this information, the computation is as follows:

$80,640           x          2.75          =          $221,760

The fair market value found above positions the business list price at $220,000.

Funding Example

Purchase Price:                       $220,000

10%Buyer Down Payment:     $22,000

20%Seller Financing:               $44,000

70%Bank Loan:                      $154,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $820.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $2,024.

After business expenses and loan payments, a buyer with a 10% down payment of $22,000 would retain a profit of $46,511, which results in a 211% 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 $220,000 with the terms listed above, the coverage ratio is 2.36. 

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:



Bank Loan Needed: $


Funding Details


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: $


Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2017 Cash Flow
Annual Debt Service: $

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017 Cash Flow
Annual Debt Service: -$

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
ROI: %


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210 N 78th St. 2nd Floor
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