Business Description

This award-winning home service business specializes in the design and construction of sunrooms and other outdoor additions, as well as backyard remodels. The company also holds exclusive rights in their territory for a leading sunroom franchise. Given their advanced payment structure, they have almost no working capital needs and boast a 6-month backlog of projects under contract. 

The business was established in 1988 and the owners are looking to retire after 35+ years of operation. $443K SDE in 2023, with 15%+ SDE margin in each of the past 2 years. $2.7M in revenue in 2023, with 1.4x increase in revenue from 2021. The company has a highly trained team of 13 employees and additional subcontractors. The owner/general manager is willing to stay on for an additional 6 months to ensure a smooth transition. The team also counts with an operations manager, who oversees day-to-day operations. The 5,500 SF facility they operate out of can be purchased for an additional $575K or leased-back.

‍

Key Metrics

$3.8M to $4M E2024 Revenue

$2.7M 2023 Revenue | 17% CAGR 2021-2023

$443K 2023 SDE

‍

Background

This outdoor specialty contracting business was founded after the owner recognized the high demand and imminent growth of the sunroom and patio industries. It provides a comprehensive range of services and prides itself in its installation and maintenance of outdoor living structures, decks, fencing, and additions. Their full team spans operations, marketing, and technicians who will stay on through transition to work with the new owner. With over three decades of operations, the company has established itself as a trusted and recognized brand in the industry and is going through another period of rapid growth in revenue.

‍

Key business details

• Substantial revenue growth: Over the past few years, this business has grown at a 17% CAGR in revenue and is projected to reach $3.8 to $4 million in 2024 (with $2 million in sales already booked through June)
• Diverse revenue mix: Revenue is generated 39% from sunrooms, 14% from home additions, 12%  from screen rooms, and 9% decks
• ‍Tech-enabled Operations: 24-hr live chat and automated appointment scheduling, enhances customer experience and accessibility, 85% of appointments are scheduled online‍
• Minimal Working Capital Needs: Advanced customer payment collections of 20% down on signing, 30% at project start, 45% at roof install, 5% upon substantial completion‍
• Partnerships with customer-financing lenders: The company partners with lenders that offer diverse financing solutions directly to clients, making their services more accessible and facilitating project affordability without increasing their accounts receivable.

‍

Growth opportunities

• Expand service offerings: By leveraging the expertise of a capable sales team to include backyard kitchen renovations and patio services, the company can tap into new revenue streams and significantly increase market share. Other specialty markets to explore are vinyl siding, roofing, and exterior replacements/ repairs.
• Product diversification: Capitalize on the growing demand for automated and customizable outdoor solutions by adding motorized outdoor features like retractable awnings or pergolas with rain sensors.
• Geographic expansion: By exploring opportunities to expand its operations into neighboring cities or regions, the company can tap into new customer demographics and markets. Targeting areas with growing populations or high demand for outdoor living spaces could be strategically advantageous.