BUSINESS LISTING # 9-03-01

FINANCIAL SUMMARY 2008            2007            2006
Gross Revenue                300,000        295,000        290,000
Expenses                200,000        200,000        200,000
Net Profit (Owner’s Benefit)        100,000          95.000              90,000

BUSINESS DESCRIPTION
The business was started by a husband and wife team in 1995, almost 15 years ago. The original owners retired after about 8 years and it was sold to a new owner who operated it for about 2 years. He also retired, and moved out of state. It was then sold to a businessman who had two other businesses. He found he did not have the time to run three businesses at the same time, and sold it to the present owner. Many of the original customers are still with the business after 15 years.

EMPLOYEES
#1    Technician    32 hours per week        6 years with business
#2    Technician    20 Hours per week        5 years with business
#3    Technician      8 Hours per week        5 years with business
#4    Technician      5 hours per week        2 years with business
#5     Technician      5 hours per week        2 years with business
#6    Technician      5 hours per week        2 years with business

The technicians receive .55 cents per mile for the use of their own vehicles. The weekly payroll is $1,135.
The Technicians handle weekly routes, watering, fertilizing, dusting, insect control, etc. All are happy, well trained, and will remain with the business if ownership changes.  Virtually no supervision is required. They know what to do, and do it quickly. There is no union, and no employee problems.
The owner does marketing and promotion, ordering, pick-up, delivery and installation. He makes occasional trips to plant wholesalers in San Francisco, and makes quarterly visits to the customer’s locations. The owner’s wife does invoicing and accounting using QuickBooks. Between them the husband and wife work approximately 25 hours total per week.

PREMISES
The business is currently operated from owner’s residence.   Neither the customers nor the employees ever come to the business head office, so there is no need for a fancy office or a high traffic area location.  A 400 sq. ft. storage facility is rented in a Concord business park for storage of plants, materials, and to facilitate pickup and delivery of plants and materials.  The technicians work from their homes and call on the customers on their route. The owner visits each customer location quarterly to check on the plants and to solicit new business. A new owner could continue to lease the storage facility in Concord, or could move it nearer his residence. It could actually be operated from a residential 2-car garage if the local zoning would allow it. The employees perform their duties at the customer’s locations, and hand in their time sheets once a week by mail, e-mail or fax.

MARKET OUTLOOK
Business has “green” certification.  There is a Business website, and the Owner makes sales calls when enquiries are received. A small yellow page advertisement merely advertises the website. The only contracts lost in last 4 years have been due to businesses ceasing to exist, or to takeovers. Many of customers have remained with the business for the entire 15 years of operation. There are no hazardous materials involved, other than insecticides.  The business has changed hands three times over the last 15 years, without losing any of the customers.

EXPANSION
One area that the present owner is not interested in expanding is the sale of plants. Currently Wal-Mart, Lowes, Home Depot, Ace Hardware, Navlets etc. sell plants to the public. They are often “seconds” purchased cheaply from the growers,   and are not looked after very well while on display at these stores. They are overwatered, under watered, and often ignored completely while being displayed. Their survival rate is abysmal. A whole new area of outside landscaping could be initiated by an aggressive new owner. The present owner is not interested in growing this business. With his PhD in business he is seeking employment in Corporate America when he frees up himself from this relatively mundane part-time business.

COMPETITION
There is virtually none.  There are a couple of very small home based businesses with only a few small accounts. There are two very large international competitors with a location in San Francisco who are not active in the East Bay area, and are only seeking large national accounts. There are moderate barriers to entry. Anyone with a watering can could go into business, but would have to aggressively solicit accounts to get started. There are over 6o accounts being serviced, and although some are larger than others, there are no large accounts that would negatively impact the business if they were lost.

TERMS OF SALE
Seller will finance a “qualified purchaser” with a reasonable down payment. Proposed terms are 30% down, and balance over 7 years at 6%. Everything is negotiable. Tangible assets are small. The main asset is the accounts. The business provides a continuing cash flow income stream.

CONTACT INFORMATION
Contact owner at 520-233-2198, or owner’s attorney at 520-233-2198 for further information, or to arrange inspection tour.

INVENTORY
Plant inventory in place at customer’s locations is approximately $25,000. Inventory in storage pending placement or replacement is approximately $10,000. This of course will vary from day to day. These figures are approximate only,

ASSETS
The main asset of the business apart from the tangible assets is the list of contracts with customers. These contracts are renewable on a year-to-year basis, and virtually none are not renewed. A few of the customers do not have contracts, and are on a month-to-month basis – but have been customers for many years.  There are 60 customers, and 50 of them are under contract.
Value of contracts (50 @ $500.)             $250,000.
Truck and camper shell    (Ford Ranger)                5,000.
Van (2001 Honda Odyssey)                    5,000.
Leased plants (on location)                    5,000.
Marketing Program (green Concepts)                3,000.
Christmas ornaments, wreaths, etc.                1,500.
10 Pressurized portable watering tanks                1,500.
Insecticides, fertilizers, etc.                    1,000.
Misc. Containers, pots, etc.                    1,000.
Plant Imaging CD (for digital designing)                    500.
Website and Domain Name (Everything Grows)                500.
Office furniture and equipment, signs, banners, etc.      500.
Total                                                 275,000.

REASON FOR SALE
Owner purchased this business to provide an income stream with a small time requirement while he went back to school to obtain his PhD in Marketing.  He has now obtained his PhD, and is a part-time professor on Business at Berkeley. The few hours a week this business requires from the owner is prohibiting him from obtaining a high paying corporate job. Although this business provides a good income for a few hours of work a week, with his education he can earn much more. His wife is a computer engineer in a high paying job, and is not willing to give it up to run this simple mundane  business that does not require anything more than a little management, and a slight knowledge of accounting. It has served its purpose, and he is ready to move on and pursue more intellectual endeavors. It is an ideal business for the right person who is retired, or looking for a part-time job.

HOW ASKING PRICE DETERMINED
Adding up value of the assets + $25,000 for goodwill. The asking price of $300,000 is very reasonable when compared to other businesses on the market. It will provide a 10% return on the purchase price, and a $50,000 salary for a part-time job

DESIRABILITY
This is a clean highly respected business, no safety hazards, no unpleasant products or services. The business is easy to manage, and practically runs itself. All the technicians are trained and experienced. All are happy with their jobs and do not intend to leave. Management requirements are minimal. Some accounting (QuickBooks) but that could be outsourced to a part time bookkeeper or student. The income stream continues, month after month. It is an easy business to run. It has short hours, and the owner can work from his home. There will be no 60 or 80 hour weeks that most small businesses require from their owner. Evenings and weekends can be free. Afternoons can be free for Golfing, sailing, hobbies, etc. The owner can take time off for travel, cruises, etc. He can also have enough free time to run another small business, or to expand this one by acquiring more customers. With a down payment of $100,000 the owner can have a cash flow of $50,000 annually for the next 7 years, and an increase to $100,000 after that. The actual terms will be subject to negotiation.
A business purchaser is seeking two things. He is making an investment in a business and is looking for a job.  This business will satisfy both of these objectives. It will provide an investment return of 10% on the purchase price, and will provide a $50,000 salary for a part-time job.
The buyer will be stepping into a business that provides a steady income, and almost runs itself. He can just leave it as is, or can grow the business through additional sales.

ASSISTANCE – POST SALE
The owner does not intend to move. He will remain available for consultation, advice, assistance and to answer question for a new owner. He will be financing part of the purchase price, so will be interested in making sure the new owner is successful

BENEFITS
The owner can deduct the expenses of his home office, and write off some of the expenses such as insurance, gas, oil, phone, utilities, etc. He can also have his wife and children on his payroll. Speak to your accountant about these matters.  There will be a consistent cash flow from day one. New daily  sales are not required. There are no deferred maintenance problems. All plants and equipment are in good shape. There is minimal liability exposure. There is no likelihood of being sued if a plant dies. Just replace it.

MARKET AREA
The owner lives in Danville in Contra Costa County. Most of the accounts are in Contra Costa and Alameda Counties. The have not solicited business in San Francisco or the Peninsula because of bridge tolls, and parking problems. However, a new owner could expand in this area by hiring a technician who lives there.

SALES TRENDS
The revenue of the business has been remarketably stable over the entire 15 years of its existence. The subsequent owners have done virtually nothing to increase the number of customers since they took over. They have been happy to enjoy the steady income, and have had no incentive to expand or grow the business. The present owner has done a small amount of marketing and sales promotion, but his interests lie elsewhere. His efforts have resulted in a couple of new accounts, and there are a few pending. He will of course assist a new owner in pursuing these potential new accounts.
There has been virtually no sale or marketing efforts since the original owners retired 10 years ago. There are a couple of very large international companies in the business. One has an office in San Francisco, but they are not active in the east Bay area. They are interested in national and international accounts, not small local ones. There are a few very small one-person competitors in the area, but they are not very active or very organized. No account has ever been lost to a competitor in the last 15 years.

ACCOUNTS RECEIVABLE
Virtually all the customers are large companies, and although some may be a little slow in paying, there has never been any accounts receivable problem. The seller will collect any outstanding accounts for his account, and the new owner will take over at closing date, that will presumably be on the first of a month.

MARKET & CUSTOMERS
This is not a seasonable business. It remains steady all year round. An area that could be exploited by a new owner is the Christmas time. Only two of the customers are being serviced at Christmastime. This is a wide open area that could be exploited by a new owner if desired. Part of the marketing program that is included in the sale is geared towards Christmas decorations, wreaths, and plants (poinsettias, etc.)

All the accounts are commercial businesses. There are no small residential accounts, and no restaurant accounts. They are not interested in short term plant leases for parties, weddings, meetings, etc. These type of accounts are labor intensive (delivery, pick up, storage, etc) and are hard on the plants due to disturbance in moving, etc.  There is however a market available in this area for a new owner who may be interested.

The present owner has set up a website with a catalogue of plants available, and has Google ads. There is a simple Yellow Page 2-line ad that promotes the web-site. He has acquired a CD of plant images that can be used in preparing proposals. He has joined several networking and industry organizational meetings with annual membership dues. These memberships will be transferred to a new owner, and can be continued if desired. Also included is a “marketing Plan” from Green Concepts that can be followed by a new owner if desired.

NEW OWNER’S ROLE
4 to 5 hours a day maximum time involved
Could only work mornings, all afternoons, evenings and weekends free
Maybe 2 or 3 trips to San Francisco plant wholesalers monthly
Visit all customers, once quarterly
Billing and collecting, ordering and placement of new plants.
Making sales presentations – using computerized presentation
Skill required – only management
Training involved – minimal, all technicians are competent and already trained.
No franchise royalties or fees required.

BUSINESS ENTITY
The business was incorporated as an LLC by the present owner. It is being offered as an asset sale. The purchaser can operate as a sole proprietorship, a partnership, or can incorporate as an LLC, a C Corp, or an S Corp depending on his accountant’s and lawyer’s advice and suggestions.

NON-COMPETE AGREEMENT
The seller will sign a non-compete agreement for the Plantscape business in the San Francisco Bay area for a period of five years, or for such terms as may be negotiated.