Very Impressive, Profitable Power Sports Retailer

Business Overview:

In less than 10 years, this family run business has grown from a start-up to a complete sales, service and parts dealership. The company retails power sports equipment including a complete spectrum of ATV’s from five manufacturers (both domestic and imported), golf carts, mopeds, scooters, dirt bikes, street bikes, UTV’s, go karts and more. The business also offers a complete line of accessories and car hauler trailers. To make the customer experience even more memorable, the business has nearly $400,000 of on-hand inventory at its large, modern, and impressive West Michigan facility.

The owners augment their own work efforts with 11 full and part-time employees who are knowledgeable in “all things motorsports.” The last three years, the business has recorded $3.0 million in average annual weighted revenues with an impressive average annual weighted SDE (SDE = seller’s discretionary income – the historical, normalized cash flow available to pay an owner and service debt) of $370,000. This niche business is attractively priced at $1.37 million which is the sum of a favorable 2.75x SDE multiplied by the company’s average $370,000 SDE + $350,000 (cost basis) of active, current inventory. 

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Property Features and Assets:

This dealership boasts over a seven acre footprint with undeveloped land awaiting growth opportunities, a large 10,000 square foot indoor showroom with a lower level functioning as an additional showroom, and a second floor business office which arranges financing and insurance for its customers. There are also two additional utility out-buildings housing overflow inventory and the company’s highly rated service department. Put it all-together and this profitable business located on the outskirts of a major West Michigan City has plenty of room to sell, service, store, and grow.

 

Market Competition and Expansion:

This business has increased the market of individual families looking towards outdoor recreation. The sellers have found a niche in the market by offering brands such as Massimo, Tao, and Cazador with the inventory owned outright avoiding hurdles and red tape often associated with selling the more mainstream domestic brands and/or importing from lesser foreign manufacturers with whom retailers cannot control their deliveries and/or inventory levels. And in the “good news” department, just recently Yamaha Golf Cars have become an exciting addition to the other stocking lines of the business.

Additional Details:

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