Today's Business For-Sale Review: No. 216 Towing & Auto Repair Company – North Dakota
- Dennis Unrein
- Sep 3
- 3 min read
Review: Business For-Sale. The numbers shown in the video are "As Listed" by the seller. SMB PE LLC did not provide those numbers. This content and video are for Informational only. Please make sure to do your own research (DYOR).
This towing and auto repair company has been operating for over 10 years and is based in North Dakota. According to the seller, the business generates $750,000 in annual revenue and reports $400,000 in annual cash flow. The asking price is $1.3 million, which implies a 3.1x multiple on cash flow and just under 2x revenue. The team includes 7 full-time employees and 1 part-time employee.
Services offered include light towing, private towing, scrap metal collection, and auto repair such as engine and transmission work. All numbers and details are presented as listed by the seller.
Deal Snapshot
Revenue: $750,000
Cash Flow: $400,000
Team: 7 full-time, 1 part-time
Multiple: 3.1x cash flow / ~1.7x revenue
Margin: 50%+ cash flow margin (per seller)
This snapshot highlights a company positioned with strong reported margins and a valuation multiple in line with auto service and towing market norms. All financial details should be validated through diligence.
Strengths
Customer Base: Over a decade of operations with loyal and recurring customers.
Track Record: Established presence across a 100-mile service radius.
Equipment / Assets: Fleet scaled from 1 to 3 tow trucks; equipment included in sale.
Service Offering: Revenue diversity through towing, scrap metal, and in-house auto repair.
Valuation: Listed at a reasonable multiple compared with typical auto shops.
The seller positions this as a stable business with long-standing customer relationships and tangible equipment assets.
Risks
Labor: Reliance on skilled mechanics and tow drivers; labor shortages could impact continuity.
Capex: Tow trucks and repair equipment face wear and tear; high replacement costs may cut into future cash flow.
Revenue Pattern: Tow volumes can fluctuate based on seasonality, accident rates, or contract mix.
Concentration: Dependence on a limited set of contracts or B2B customers may expose the business to concentration risk.
Other Issues: Buyers should assess potential liabilities, competitive pressures, and regulatory requirements tied to towing and auto services.
These operational risks should be carefully evaluated during diligence, as they often drive differences between stated and realized performance.
Financing View
SBA Potential: Eligible size and margins suggest SBA financing could be possible, subject to lender approval.
Seller Financing: Terms not disclosed; seller participation could aid in deal flexibility.
Cash Flow Adjustments: 50%+ margin requires scrutiny; adjustments for owner compensation, capex, and seasonality are critical.
Debt Service Coverage: On paper, cash flow appears to support SBA debt, but adjustments must be modeled before committing.
From a financing perspective, SBA-backed lending may be feasible. Buyers should review cash flow sustainability under various debt structures.
Disclaimer: This information is presented as listed by the seller. Do your own diligence. You can lose 100% of invested capital.
Q&A: Common Questions in Small Business Acquisitions
How to sell my small business?
Work with a broker or list on marketplaces like BizBuySell.
What multiple do small businesses sell for?
Often 2–4x cash flow, depending on industry dynamics and financial quality.
Can I use an SBA loan to buy a business?
Yes, if cash flow supports the debt. Lenders apply SBA criteria during underwriting.
How to value a small business under $2M in EBITDA?
Based on cash flow, business model, recurring revenue, and customer contracts.
What risks should I check before buying a business?
Labor, equipment condition, customer concentration, and seasonality.
Do sellers offer financing?
Often, but terms vary and should be negotiated case by case.
What is a typical down payment with SBA?
Usually 10–25% of the purchase price.
How do I check if margins are sustainable?
Review financial statements, normalize addbacks, and adjust for capex needs.
Should I hire a quality of earnings (QoE) provider for small deals?
You can choose to, even for smaller transactions; QoE helps validate cash flow.
What happens if revenue declines post-close?
Debt service may be at risk. Buyers should model downside scenarios before financing. Small companies are risky do your own research (DYOR) before moving forward Disclaimer: The content provided by SMB PE LLC is for illustrative and educational purposes only and does not constitute financial, legal, or business advice. Past performance is not indicative of future results. Always do your own research (DYOR) and consult with qualified professionals before making any decisions. This email is for informational purposes only. For more, see our Disclaimer Notice at www(.)smb-pe(.)com/disclaimer
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