Deal Flow: A Decade-Old Document Shredding Company

Explore Financial Viability, Market Opportunities, and Operational Strengths

I was going to pass on making a field note from this listing, but two things make it worth a closer look: It’s been around for over a decade, and the stated reason for the sale is retirement. Two things I really like when triaging businesses for sale. Oh, and one more thing: the claimed high Google ranking. How much is that worth, if anything? So, let’s dive into what we can learn from the listing:

This document shredding and storage business presents a potentially attractive opportunity due to its established market position and operational setup, but the high asking price relative to the gross revenue is our first red flag. The training and support offered by the current owner could facilitate a smooth transition, you should have a clear plan for leveraging and expanding the business’s capabilities.

Financial Overview

• Asking Price: $2,900,000

• Gross Revenue: $700,000

• Cash Flow: Not available

• EBITDA: Not available

• FF&E (Furniture, Fixtures, & Equipment): $50,000 (included in asking price)

• Inventory: $350,000 (included in asking price)

• Rent: $4,036 per month

Business Operations

• Location: Broward County, FL

• Industry: Document shredding and secure storage

• Established: 2013

• Employees: 5

• Facilities: Includes 2 shredding trucks, one box truck, one baler, one forklift, consoles and carts, website, and telephone number.

Analysis

Valuation and Price Justification:

• The asking price at about 4.14 times gross revenue is really high. It seems hard to justify without visibility into the cash flow or EBITDA. Maybe the profit margins are unusually high? Perhaps the stellar SEO with high Google ranking could justify it?

• FF&E and inventory represent a substantial part of the business’s operational assets.

Strengths:

• Established reputation and strong presence in the tri-county area, with a focus on Broward, Miami-Dade, and Palm Beach counties.

• Positive industry recognition and high ranking on Google, suggesting effective online visibility.

• The business operates in a region with growing demand due to increasing population and business relocations to South Florida.

Opportunities for Growth:

• Potential to expand services to include medical waste disposal, leveraging existing relationships with medical facilities.

• Opportunities to expand geographic service areas or add additional services such as digital data destruction or recycling services.

Market and Location:

• The South Florida area has a growing need for services that protect against identity theft, with document shredding being a critical service.

• The location and established operations position the company well to capitalize on regional growth and the increasing importance of secure information disposal.

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.