Business For Sale Perth, Western Australia 6000
Business Category Engineering Manufacturer Product Manufacturer
$1,700,000 WIWO
Description
Don’t Lift A Finger! … …net $608,079 - Remote Control - Under Management
Key Feature Snapshot
Under Management – Hands-off Profit
Recession Proof – Proven Over Decades of Trading
Semi-Production Line - Minimal Employees
Preferred Supplier – At Corporate Level
95% Repeat-Order Customers – Predictable Sales
Essential Products – Critical in Essential Industries
Easy To Learn & Manage – Step by Step Machine Process
This business produces essential products that drive continuous demand across various industries. In fact, many operations would come to a halt without their time-critical products. The ongoing need for these essential in-house, made to order products, have for decades, proven to allow its customers projects run smoothly and avoid the costly disruptions associated with downtime.
As reflected in the sales performance chart below, nothing has been able to stop this business’s unrelenting sales growth:
The step-by-step production process begins with receiving orders and creating a range of custom-made products tailored to the specific sizing requirements of each customer. Raw materials are fed into machinery, which processes them into finished products, ready for dispatch to the customer.
Under Management – Hands-off Profit
Operating like a well-oiled machine, the business benefits from a low staff number and a full-time manager who works just three days a week, allowing the owner to remain uninvolved in daily operations. Currently, the net profit of $608,079 reflects the business under management. An owner who chooses to manage the business full-time could potentially increase the net profit to $695,000 by saving on the manager’s salary.
Recession Proof – Proven Over Decades
With an impressive 95% of sales generated from repeat customer orders, this business maintains its stable growth rate without relying on any advertising costs (2024 = $0.00) or a full-time salesperson. Its long-standing commitment to good-old fashion service and reliable turnaround time of orders has built strong client relationships and minimised competition.
The current modest advertising budget offers a promising opportunity for a new owner to further increase profitability. By introducing a targeted advertising strategy, the new owner could potentially accelerate sales growth even faster than the current organic rate.
Preferred Supplier – High Level Security
As a trusted supplier across various industry sectors, this business provides a level of low-risk security that is hard to rival. Their essential products, while straightforward to produce, are protected by significant barriers to entry, shielding their trusted supplier status. They often operate as the sole provider, securing contracts without the need to compete. This unique position ensures that customers prioritise reliable service over price, maintaining steady demand with minimal price sensitivity.
95% Repeat Customers - Low Risk
The business has delivered impressive revenue growth, nearly doubling its sales in just four years. Starting at $1,887,833 in 2019/20, revenue has steadily increased to $3,770,072 in 2023/24. This consistent upward trend highlights the financial stability of the business, with much of its revenue driven by long-term relationships with loyal customers, ensuring a reliable and predictable income stream.
Full Price Funding - at Your Fingertips
For example, considering a net profit of $608,079, a 8-year principal and interest loan pay-back term, an asking price of $1,700,000 and an interest rate of 7.5%, the Business has the potential to generate a cash surplus of $327,366 per annum. (APPROX)
Yes! – that’s right, this surplus remains intact even after accounting for 8- year principal and interest full-price loan repayments.
Closer examination reveals a compelling picture of this self-funded investment strategy.
The Business not only consistently generates substantial annual cash surpluses from its net profit but also effectively finances its own purchase through servicing the full-price loan repayments from its net profit. Remarkably, with its continued trajectory of success, the Business’s goodwill accumulates, driven by potential profit growth, creating the potential for a higher selling price in the future.
Note: it is important to note that the above example does not reflect individual owners’ requirements, such as working capital, personal taxation payments, owners’ drawings, movement in interest rates, etc., and other personal expenses that may change the expected cash surplus. Accordingly, there is no representation, warranty, or any other assurance that any of the variables, approvals, assumptions, or forecasts mentioned above will be realised. As a result, we strongly recommend that each buyer contacts their accountant, legal advisor, and lending institution to satisfy themselves with the expected cash surplus return and the opportunity to qualify for the necessary loan approvals.
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This business is somewhat unique and has no similar competition in this region, category or price bracket.