In this episode of Acquisitions Anonymous, hosts Michael Girdley and Heather Endresen evaluate a metal recycling business for sale in Pennsylvania. With $1.1 million in cash flow and $20 million in annual revenue, the conversation explores the business’s asset value, including $2 million in inventory and $2.5 million in equipment. Heather and Michael also dig into key factors like the potential impact of commodity price fluctuations, the importance of owning the real estate, and the environmental concerns tied to the business’s location.
Key Points Discussed:
- Inventory & Pricing Risk: The challenge of managing $2 million in inventory and how commodity pricing impacts profitability.
- Environmental Concerns: Why it’s critical to understand the environmental state of a property in a recycling business.
- Location Dependence: The importance of owning real estate in a business heavily tied to its physical location.
- Low Margins: How operating at a 5% net margin presents risk and the challenges of maintaining profitability in a low-margin industry.
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Thanks to this week’s sponsor:
Acquisition Lab and their team have been longtime supporters of the pod. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.
If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood at chelsea@buythenbuild.com and mention us ;)
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