FarmCo Construction & Farm Supplies

 

For Sale: A well established business concentrating in farm supplies

They are located in thriving Central Alberta town with active service clubs and an excellent high school.

Price: $295,000

Normalized Cash Flow: $100,000

FarmCo farm supplies

What they do – the short version . . .

  • Source clients looking for construction, livestock and farm supplies.
  • Maintain an inventory of their most commonly requested items.
  • Attract customers needing their specific offerings.
  • Maintain knowledgeable counter & yard staff to assist customers.
  • Maintain accounts for certain customers so their workers can sign for needed products.
  • Maintain relationships with suppliers.
  • Constantly seek customer feedback.
  • Continuous improvement with ideas implemented based on customer feedback 

Summary

FarmCo has been selling farm supplies for thirty years. They also maintain extensive supplies for their local construction industry.

The firm is located in a thriving Central Alberta small town. Their nearest competitors would be an hour or more away.

They own their own yard and buildings. This too may be for sale.

Operations

The firm works from a well fenced 1.5 acre yard with camera surveillance backing onto a numbered highway well patrolled by the local RCMP. There is excellent access for shippers and ample customer parking.

They have five major suppliers servicing about 80 percent of their business needs. There is no concentration with their largest supplier responsible for only 25% of their purchases.

All their shipments arrive inside a week from placing an order.

Inventory varies with the construction and agricultural seasons. Winter is their slower period.

Major equipment is limited to a fork lift and delivery truck. These are older but have been well maintained and will be in good working condition for the new owner. They can measurably increase their business without the need for new equipment.

Most maintenance can be done in-house or by local expertise.

The bookkeeping is done by the owner with the help of a staff member. They use both QuickBooks and Profit Master.

Business hours vary slightly with the season and they are open Saturday mornings in the busy season only.

There are no hazardous materials in FarmCo’s operation.

FarmCo has never had a WCB issue.

Customer Base

FarmCo caters to the local agricultural community, local contractors, and surrounding communities.

Most sales, even larger ones, are carried away by the customer. Deliveries are limited mostly to lumber packages.

This a local destination store with mostly repeat customers. FarmCo’s reputation for service has built up a very loyal customer base. 

New customers come from word of mouth and referrals. They do some google ads and still have an ad in the Yellow Pages.

They are located in an agricultural centre with lots of construction and oilfield maintenance. The have their own well respected high school, service clubs, and several churches.

There are good highway and rail services, their own RCMP detachment, a local doctor and an expanding resort community fifteen minutes away,

Their location very much gives them a competitive advantage.

Further Information

Three years of financial statements and a complete equipment list is available for qualified buyers.

Management Discussion

Q. Why you are selling?

A. I am 65 and want to retire.

Q. In your words, what does the firm do?

A. Retails building, hardware, livestock & farm supplies.

Q. What functions does the owner perform? What talents will the new owner have to replace when you leave?

A. Customer relations is key followed by Sales, Purchasing and Bookkeeping

Q. How long will you stay after the sale to help in the transition?

A. One to three months as required.

Q. Can you estimate what it would cost for a competitor to start up?

A. Well over a million dollars.

Q. Have the accounts receivable been purged of bad debts?

A. Yes. We are blessed with no bad accounts.

Q. Will you agree to a non-competition clause?

A. Yes. I am retiring.

Interested? Next steps:

1. Fax / scan the non-disclosure document 
2. Phone discussion
3. Release of financial information
4. Meeting with seller and tour of premises
5. Discussions that may lead to a deal

NOTICE

The information on contained in this document has been provided from sources believed to be reliable. You must seek independent verification of these facts through due diligence before taking any action based on this information.

David Page | An Alberta Business Broker

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