I stumbled on this opportunity outside of the usual channels, and it looks like it may be a good investment given the profitability and growth potential . The acquiring entrepreneur should seriously assess the scalability and stickiness of current customers. The asking price seems tenable given the turnkey nature of the business.
Business Overview
Location: Denver Metro Area
Established: 2009
Facility: 2,000 sq ft modern production facility
Employees: 5 coffee roasting staff
Production Capacity: 6,000–8,000 lbs of coffee per month with about 40% excess capacity
Financial Overview
Annual Sales: $420,000 (average over the past 3 years)
Gross Margin: 32–35%
Growth Projections: Sales could increase to $600,000 within 3 years with projected expansion
Key Strengths
Strong Market Position: The business is strategically located in a high-demand area for specialty coffee, with a solid reputation built over more than a decade.
Turnkey Operation: The sale includes all necessary equipment and a trained team, allowing for a seamless transition with minimal operational changes needed.
Loyal Customer Base: The business has nurtured strong relationships with a variety of customers including cafes, restaurants, and online consumers.
Growth Potential
Increase Production Capacity: Utilizing the existing 40% excess capacity and potentially expanding the facility or equipment to boost output.
Expand Customer Base: Increasing efforts in marketing, especially in digital platforms, could reach new customers in untapped markets.
New Sales Channels: Exploring direct-to-consumer sales through e-commerce or subscription models.
Financial Health
The business maintains healthy gross margins and has shown steady cash flow.
The existing financial setup suggests the business is well-managed with potential for increased profitability under an engaged owner.
Risks and Considerations
Market Competition: While the business has a loyal customer base, the specialty coffee market is highly competitive.
Economic Sensitivity: High-end consumer products like specialty coffee can be sensitive to economic downturns which might affect discretionary spending.
Transaction Rationale and Pricing
Asking Price: $540,000, approximately 4x EBITDA, seems reasonable given the turnkey nature of the business..
Seller Financing: Love to see it.
Operational Transition
Staff Retention: Retaining knowledgeable staff is critical for continuity and maintaining the quality of the product.
Owner Training: The current owners offer 30 days of hands-on training.
