SoundCo Auto Electronics

 

Price: $295,000

Normalized Cash Flow: $97,154

What they do – the short version

  • Image result for automobile sound system graphicSoundCo services customers brought in by their own marketing, repeat customers such as auto dealerships, and referrals from dealerships and previous customers.
  • Their skill set is installing automotive/marine sound systems, security & convenience features and any electronic repair.
  • Service car dealerships for all their automotive electronic needs including electronic trouble shooting.
  • Source parts for the best possible price and estimate install/repair at a fair and honest price.
  • Customer provides payment and picks up the vehicle.
  • No retail customer’s vehicle is released without payment.
  • Customer feedback provided to shop about service.
  • Continuous improvement with ideas implemented based on customer feedback.
  • On site installation at car dealerships.

Summary

SoundCo is a long-established Calgary firm dealing with wholesale customers and their referrals in the field of sales, installation and repair of automotive electronics. Their last three years of full financials and a full equipment list are available to qualified buyers.

Operations

The firm is located in a large 3000 sq foot industrial bay in a NE industrial centre. This location gives them a competitive advantage based on proximity to their wholesale clients and ease of access from all areas of the city. Having existed at this location for over 20 years represents stability and facilitates repeat business .

There is excellent signage allows for potential growth by bringing daily attention to their products and services to a large number of future customers every day.

SoundCo’s location has great customer parking and provides excellent access to their shippers.

Their top five suppliers provide almost all their needs. Most items arrive by courier within a week of placing the order. There is a long, positive history between SoundCo and their suppliers which allows for smooth transactions and ease of warranty situations.

SoundCo’s inventory seldom runs higher than eight weeks on-hand. In dollar terms, their inventory needs can be kept to between $30.000 to $60,000 most of the year.

The business is somewhat seasonal although the variety of services and products currently available are providing the opportunity for more financial consistency.  Employees can be trained in-house.

Two of the staff can be thought of as ‘key men’. None of the staff require any licencing. The firm only needs AMVIC and City Business Licencing.

There is a Safety Program in place and they have a ‘perfect’ WCB history.

The seller estimates that his staff costs are about 4000 hours a year. There is a seasonal component with the winter months being busier than the summer.

All of their equipment is maintained in good working order and is maintained in-house. No new equipment should be needed to grow the business.

The Administration of the business including the books is currently being performed by a family member using Sage Simply Accounting.

The firm is not open on weekends and generally maintains the hours of Monday-Friday 9am-5pm.

Customer Base

Their customer base runs from Car Dealers, Dealer Referrals, their signage, Customer referrals,

Repeat customers, and word of mouth. The seller estimates that half his business comes from his top five customers.

Most of their customers are ‘repeat’ customers. But they have their own web page to draw attention from new customers.

Warranties can run from one to five years. Their warranty history is excellent.

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.  Age and Relocating

Q In your words, what does the firm do?

A. Solves people’s electrical problems and provides their vehicle’s convenience features at a fair and honest price.

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

A. Electronic Aptitude, ability to deal with people (including maintain and building professional relationships), sales ability, management aptitude and problem solving through unconventional, creative thinking.

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

A. 1-2 years as required, negotiable.

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

A. 25 years of customer satisfaction, reputation and maintained business relationships.

Q. Have the accounts receivable been purged of bad debts? (This will is really a lawyer question).

A.  Virtually 0 bad debts, but yes.

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

A. Yes

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.

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David Page | An Alberta Business Broker

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