Deal Flow: Auto Glass Replacement Company

30+ Year Profitable Business in the Growing Auto Glass Replacement Industry

7 min readDec 18, 2024

Let’s take a look at this Auto Glass Replacement Company. Imagine this: you’ve got a business that’s already making bank, generating over $2 million in cash flow, and doing it with a healthy 41% profit margin. That’s like finding a money-printing machine that goes brrrrr, but with actual employees and customer relationships. According to the listing, the company has these rock-solid, long-term ties with government agencies and insurance companies, which basically means it’s not going anywhere anytime soon. Stability? Check.

But wait, there’s more. The seller is offering to finance part of the deal, so you don’t need to sell a kidney to make the purchase happen. The cherry on top? It’s got a mobile service model. Think about that for a second — mobile service means you’re not locked into a single location, and that’s a huge competitive edge, especially if the soon-expiring lease falls through.

But, here’s the kicker. You’re going to want to make sure you read the fine print on the lease terms and scope out the competition before diving in. You don’t want to end up in a race where everyone’s in Ferraris while you’re trying to drive a minivan. Also, the inventory purchase and maintaining good relationships with suppliers are key. If you don’t have that dialed in, it might cause hiccups down the line.

In the grand scheme of things, though, this business looks like it has a solid foundation. With the right playbook, you could take this thing to the next level and tap into all sorts of growth opportunities. Think of it as a blank canvas with a pretty great start.

Here’s a detailed analysis based on the information provided in the listing:

Business Overview

Asking Price: $9,950,000
Cash Flow: $2,081,321
Gross Revenue: $5,088,128
EBITDA: N/A
FF&E (Furniture, Fixtures, and Equipment): $250,000 (included in the asking price)
Inventory: $50,000 (not included in the asking price)
Rent: $6,500 per month
Employees: 16
Established: 1991
Location: New York, NY (Tri-State Area)
Real Estate: Leased (stand-alone building with 2,159 sq. ft. of space)

Key Metrics & Valuation

Cash Flow to Asking Price Ratio: The business is generating $2,081,321 in cash flow with an asking price of $9,950,000. That’s a cash flow multiple of approximately 4.8x. And it looks like a reasonable multiple for an established, high-profit, and niche business with a strong reputation. Auto glass replacement businesses typically sell for multiples in the range of 4x to 6x cash flow.
Revenue and Profitability: The business has $5,088,128 in gross revenue, with a cash flow margin of about 41%. This is an excellent margin for the industry, indicating strong profitability and efficient operations. Given the recurring nature of insurance claims and customer referrals, this looks like a well-established and stable business model.
FF&E and Inventory: The $250,000 in FF&E includes all the essential equipment, like vehicles, tools, and specialized glass-cutting machinery. The inventory of $50,000 is not included in the asking price but will be negotiated separately.

Business Model and Operations

Services Offered: The company provides a broad range of services, including:

Auto glass repair and replacement (both domestic and foreign cars)
ADAS recalibration
Sunroof and stereo installations
Rock chip repairs
Storefront plate glass replacement
Emergency services and board-ups
Insurance claims handling
Mobile service within a 100-mile radius (covering NYC, Long Island, Westchester, Northern NJ, and parts of Connecticut)
Key Clients and Relationships: The company has established multi-year contracts with significant clients such as police departments, fire departments, and local municipalities. These long-term contracts provide reliable, recurring revenue and stability to the business. In addition, the company has built excellent relationships with insurance companies and auto glass suppliers, creating a solid referral network that has been nurtured over 30 years.
Location and Facilities: The company operates from a stand-alone building on Main Street in a busy town. The 2,159 sq. ft. building has a main office, a customer waiting room, storage for inventory, a 3-car garage, and a glass cutting room. The location is strategically positioned with good visibility and easy customer access, which is essential for attracting foot traffic and facilitating installations.
Experienced Workforce: The business employs 16 people, including certified technicians, which ensures high-quality service and customer satisfaction. The business owner is administrative-only, which means the operation runs smoothly without heavy reliance on the owner’s day-to-day involvement.

Strengths

Strong Cash Flow and Profitability: With $2,081,321 in cash flow on $5,088,128 in revenue, the business enjoys an excellent cash flow margin of 41%. This high margin reflects a well-run, profitable operation with strong demand for its services.
Long-Established Reputation: The company has been in business since 1991, and over the years, it has established itself as a leader in the auto glass replacement sector. The company is well-regarded in the Tri-State area and has received multiple recognitions as the best auto glass replacement company on Long Island.
Recurring Revenue: The business benefits from multi-year contracts with government entities, emergency services, and insurance companies, which provide a steady, predictable stream of revenue. This stability reduces the risk associated with customer turnover.
Mobile and On-Site Services: The company’s free mobile service covering a 100-mile radius adds significant convenience for customers and enhances the company’s ability to serve a larger area. This service model is particularly valuable for attracting residential clients and business clients in need of urgent service.
Strong Relationships with Insurance Companies: The company has excellent relationships with insurance companies, which helps it secure consistent business through referrals and insurance claims.
Growth Potential: While the business is already well-established, there are still opportunities for growth, such as expanding marketing efforts, increasing the workforce to handle more service calls, and possibly expanding into new geographic regions. The company’s niche market and established referral network position it well for continued growth.
Seller Financing Available: The seller is offering seller financing, which makes the business more accessible for qualified buyers. The option to finance part of the purchase price reduces the initial capital burden and demonstrates the seller’s confidence in the business’s future prospects.
Experienced Management Team: With a strong management team and a workforce that is highly experienced and certified, the business has the infrastructure to continue operating effectively with minimal disruption during the ownership transition.

Risks and Considerations

Lease Expiration: The business operates in a leased facility, with the lease set to expire on 12/31/2024. While the landlord is reportedly willing to provide a new lease, you’ll want to review the lease terms and ensure that the space will remain suitable for the business’s needs. Rent increases or unfavorable terms could impact profitability.
Competition: While the company is a leader in its local market, there is likely to be local competition in the auto glass replacement sector. You’ll need to assess how the company can continue to maintain its competitive edge and retain market share, especially as new players may enter the market.
Dependency on Insurance Companies and Government Contracts: The business’s success is partly dependent on its relationships with insurance companies and government contracts. Any changes in these relationships or disruptions in the insurance industry could impact revenue. A shift in insurance company practices or claim handling could affect the company’s referral network.
Inventory Management: While inventory is valued at $50,000, it is not included in the asking price. You’ll need to negotiate for the purchase of the inventory, which could be an added cost. Additionally, managing inventory levels to ensure that the business can meet customer demand without overstocking will be essential for maintaining profitability.

Overall, this business offers a solid foundation for a buyer who is looking to capitalize on a well-established, profitable business in a growing market. With the right strategy, there are ample opportunities to expand the business further.

MARKET OUTLOOK

The North American automotive glass market is projected to experience significant growth in the coming years. As of 2023, the market size was estimated at approximately USD 6.96 billion, with expectations to reach USD 27.4 billion by 2029, reflecting a compound annual growth rate (CAGR) of 6.4% during this period. (Sources: Cognitive Market Research, KBV Research)

Several factors are contributing to this growth:

Technological Advancements: Innovations such as smart glass and enhanced safety features are driving demand for specialized automotive glass products. (Source: Mordor Intelligence)
Increasing Vehicle Production: The rise in vehicle production, particularly in the electric vehicle segment, is expected to boost the demand for automotive glass and related repair services. Source: Grand View Research
Aging Vehicle Fleet: An increasing number of vehicles on the road is leading to a higher demand for maintenance and repair services, including auto glass replacement. (Source: Mordor Intelligence)

What do you think? Check it out and let me know!

About: Silverwave Deal Flow combs through and analyzes thousands of businesses available for sale that may be of interest to entrepreneurs looking to acquire an existing business. We are not affiliated with the business listed for sale unless otherwise disclosed.

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