In 2015, over 7,222 small and middle-market businesses were sold in the United States according to BizBuySell.com (www.bizbuysell.com). These businesses could be broken down into two major categories: 50% Retail, which includes customer service oriented product selling, including retail stores, gas stations, convenience stores, and food & beverage businesses; and 38% Service, which include professional services such as auto repair, dental offices, barbershops and salons, and many other professional niche services. George & Company Business Brokers highlights three Massachusetts businesses as examples of the current service sector market in New England.
One of George & Co’s listed properties, a 5,000 square foot full-service auto repair and inspection business in northern Worcester County, highlights many of the reasons these businesses sell. In the 2015 BizBuySell Insight Report, Automotive Repair companies were listed as over 8% of successfully sold service sector businesses. High goodwill, guaranteed return clients for repairs, maintenance, and inspections, and full connections to inventory resuppliers make these great businesses to buy. Most include highly trained staff that are otherwise difficult to obtain. This business is an example of professional services in high traffic sectors.
Looking for a unique business? A business that doesn’t require tons of hours, or specific trade experience? This established meal preparation franchise could be the perfect fit for you. A full time working owner in this business could work only 25 hours per week and still make a great living! This turnkey business offers people a fun, clean organized environment to gather to quickly and efficiently prepare a months’ worth of meals for their families in minutes. As an owner you get to meet and help some great people and show new people how they can add speed and variety to their family dinners without all the mess and stress.
Each month the business averages 150 people, which is a great start, but this number could max out at around 200 without having to increase hours. That’s an average of 85% recurring revenues – most businesses lack these recurring revenues and profits. Clients book at least 1 month in advance. Most clients have made this monthly event part of their routine and come back every month. The current franchise offering cites the range of cost to open a new store between $300,000 and $412,000, and that would be starting with zero customers. This well-established company is available for less than half the startup cost!
Many service sector businesses focus on niche services, and have flexibility in terms of staffing and location. An example of this is a listed kitchen exhaust, duct, and HVAC cleaning service that has been operating for 60 years on a home-based business model. This allows buyers to relocate the business within the area, but still maintain the steady cash flow from the repeat business model from the retail sector cleanings. Buying this business includes the goodwill and client lists, but also the full inventory and staff.
These three businesses show that businesses on the market in the professional services sector have many things in common – goodwill, skilled staff, and specialized inventory – that are as important as the physical assets of the business. Whether you’re buying or selling, understanding the business market of your chosen sector is an important first step.