Field Notes: High-End Luxury Auto Leasing & Rental

Venturing Beyond Traditional ETA Boundaries to Explore a High-End Luxury Car Leasing and Rental Business

This listing violates everything I believe in when it comes to Entrepreneurship through Acquisition (ETA). It was founded in 2020, the owners aren’t retiring — they’re selling to concentrate on their lending business, and high-end luxury vehicles depreciate rather rapidly. Yet I’m a sucker for high-end luxury cars, and just imagine what your ‘company’ car might be? Bearing in mind if, like me, you’re looking to take over a boomer business with a much longer track record, let’s go over the listing anyway:

Financial Performance and Valuation:

• Asking Price: $5,500,000. The price is based on cash flow of $1,895,000, which looks pretty good based on gross revenue of $3,950,000.
• Understanding the revenue trends post-pandemic is crucial for evaluating the business’s market demand and future growth prospects.
• Rent: $8,800 per month for a 5,850 sqft warehouse. This seems reasonable given the south Florida location and space required to store high-end luxury vehicles.

At first glance, the asking price relative to cash flow looks attractive, especially in the high-margin, high-end luxury rental sector.

Market Position and Business Operations:

• Established in 2020, the business is relatively new but has shown a strong growth trajectory, particularly post-COVID, highlighting resilience and market demand.
• Diversification into fleet leasing and longer-term rentals is a strategic move that broadens the business model and revenue streams.
• The focus on luxury vehicles and an established online presence suggests a well-positioned brand with competitive advantages.
• The business reports having solid partnerships and collaborations, which likely contribute to its visibility and customer inflow.

Transition and Risks:

• The current owner is willing to provide full training for up to six months. This is beneficial for a smooth transition, especially if the buyer has limited experience in this industry.
• The owner’s reason for selling is a focus on another business and relocation seems legitimate and non-urgent, possibly giving you time to locate equity investors.
• Risks could include market volatility in luxury items, high operational costs, maintenance and insurance of high-value assets, and the competitive landscape in south Florida’s high-end luxury car market.

Strategic Considerations for an ETA:

• Assess the condition and value of the luxury vehicle fleet, they are a significant part of the business’s assets and appeal.
• Evaluate the sustainability of the growth seen in the post-COVID era and the scalability of the fleet leasing and long-term rental models.
• Understand the local luxury car rental market dynamics, competition level, and potential for market share growth.
• Explore avenues for further expansion, such as increasing the fleet size, diversifying the types of luxury vehicles, or expanding geographically beyond South Florida.

Wrap Up:

This could be a compelling opportunity in a lucrative niche market, with substantial growth potential and solid financials. However, due diligence is essential to validate the financials, assess the condition and potential depreciation of the vehicle fleet, and understand the competitive landscape. Like I mentioned, this violates nearly all the tenants of Silverwave ETA, but you only live once. It could be worth checking out.

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About: Silverwave Field Notes 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. The business highlighted above is represented by Shaun Sutar.