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GET THE #LOCKBOSS HARD-WORKING CARHARTT HAT & GLOVES FREE WITH ORDERS $450+ (ADD TO CART FOR OFFER)
GET THE #LOCKBOSS HARD-WORKING CARHARTT HAT & GLOVES FREE WITH ORDERS $450+ (ADD TO CART FOR OFFER)
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Is It Worth Investing In A 200k Locksmith Business Listing? Analyzing The Value

Hey everybody! Today we're diving into the nitty-gritty of a locksmith business that's on the market for a cool $200,000. It's a long-standing operation with over 30 years under its belt, and it's right in Monroe, Washington. Let's see if this business is worth the investment.

Business Overview

  • Location: Monroe, Washington
  • Established: 1993
  • Asking Price: $200,000
  • Gross Revenue: $356,000
  • Cash Flow: $78,000
  • Inventory: $90,000
  • Assets Included: Over $20,000, including a service van

Key Points to Consider

  1. Longevity and Reputation

    • The business has been around for over 30 years, building a solid reputation in the community.
    • The current owners are selling due to health reasons and are motivated to close quickly.
  2. Services Offered

    • Traditional locksmith services: rekeying, lockouts, key cutting.
    • They also sell safes and security items.
    • Potential for expansion into electronic key fobs, additional key cutting machines, and card reader systems.
  3. Digital Marketing Potential

    • Currently, there is no digital advertising (Google or Meta ads).
    • Implementing a digital marketing strategy could significantly boost revenues.
  4. Inventory and Equipment

    • Includes a substantial inventory valued at $90,000.
    • The quality of inventory is crucial; high-movers are valuable, but outdated items might not be.
  5. Financials and Valuation

    • Asking price is close to one times the discretionary earnings plus inventory.
    • An SBA lender might fund the acquisition, but a cash offer is preferred for a quick close.
  6. Lease and Employees

    • The business operates out of a 1,600 sq ft leased location at $1,850 per month.
    • It appears to be a small operation with potentially three employees (husband, wife, and one other).

Pros and Cons

Pros:

  • Established business with a solid customer base.
  • Potential for growth through digital marketing and new technologies.
  • Included assets and inventory add value.

Cons:

  • Old equipment and potentially outdated inventory.
  • Uncertainty about the exact number and role of employees.
  • No digital marketing strategy in place, limiting current growth.

Evaluating the Asking Price

  • Inventory Value: Be cautious. The true value might be lower than listed due to outdated items.
  • Service Van: Assess the condition. If it's old and needs replacing soon, factor that into your costs.
  • Negotiation: Aim to negotiate the price down. An offer around $70,000-$85,000 could be more reasonable, considering the potential need for new equipment or a service van.

Financing Options

  • SBA 7(a) Loan:
    • Offers attractive interest rates and can spread payments over 20-25 years.
    • Typically requires a 10% down payment and personal guarantee if you own a home.

Conclusion

Investing in this $200,000 locksmith business could be a good opportunity if approached wisely. Ensure a thorough review of the inventory and equipment condition, and consider the potential for growth through digital marketing and technology expansion. As always, negotiate to get the best deal possible.

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