20 years of auto repair is enough for the owner/seller of an attractive, successful, small town mid-Michigan auto repair business. He looks forward to transitioning his business to only its third owner as he pursues non-competitive endeavors. Located in a 5,000 square foot facility on a 1.6 acre parcel (both included in the purchase of the business) in a desirable town, competition is minimal with only one other auto repair business within reasonable driving distance.

The business has two well-paid, skilled employees (with extended tenure) working full-time in this business. The fully equipped auto repair shop derives 95% of its business from retail customers, many of whom are “long-time regulars.” 5% of the business comes from local commercial accounts.

Serving the community for 50 years, this business does everything from selling and mounting tires to rebuilding engines. With attractive real estate and a great small town atmosphere, the business has averaged $470,000 in annual revenues over the past several years with a high water mark of $530,000 of revenues in 2024. During the post Covid years the business has averaged $115,000 in SDE (the historical, normalized cash flow available to service new debt and pay the buyer’s compensation.

Using a very modest SDE multiple of 2.25x results in an enterprise value of $259,000 (2.25 x $115,000 = $259,000). The real estate and fixed assets of the business have a combined value of $310,000. The transaction will also include $15,000 (cost basis) of salable parts. The list price for the business including real estate, fixed assets, inventory and goodwill totals an affordable and bankable $584,000, especially given the seller’s willingness to carry an $80,000 seller note for a solid buyer.

The seller envisions an asset sale in which he retains cash and A/R while retiring all liabilities of the business at or before closing. The successful buyer will receive all assets and the goodwill of the business. Additionally, the buyer will receive meaningful transition training post-close as part of the purchase price.