THE BUYER'S BRIEF - FULL DEAL BREAKDOWN
Hardwood Flooring | Southern California | $1,280,000
$445,000 in seller's discretionary earnings. A 45-year track record. Ninety percent of revenue from repeat customers and referrals with virtually zero marketing spend. On paper, this Southern California hardwood flooring operation checks a lot of boxes. But two missing data points keep this deal from earning a Bulletproof stamp - and most buyers would never think to ask about them.
THE DEAL SNAPSHOT
Industry | Hardwood Flooring - Installation & Refinishing |
Location | Southern California |
Asking Price | $1,280,000 |
Revenue (TTM) | $3,000,000 |
SDE | $445,000 |
Years Established | 45+ years |
Team Size | Under 15 full-time W-2 employees |
BULLETPROOF SCORE CARD
CRITERION | TARGET | ACTUAL | VERDICT |
Debt Service Coverage (DSCR) | >= 2.0x | 2.59x | PASS |
Purchase Multiple | <= 3.5x SDE | 2.88x | PASS |
Seller Financing (10% Note) | Seller carries 10% | Seller willing (relocation sale) | PASS |
Working Capital Cushion | 3 months operating | Not disclosed | INCOMPLETE |
Revenue Trend (YoY) | Stable or growing | Not disclosed | INCOMPLETE |
Bulletproof Score: 3/5 WORTH A LOOK
THE 80/10/10 BREAKDOWN
Here's how this deal structures using the 80/10/10 method. The SBA covers 80% of the purchase price, the seller carries a 10% note - keeping them accountable through the transition - and the buyer brings 10% to the table. At $1,280,000, that means you're controlling a $3 million revenue business for $128,000 down.
Your Cash In: $128,000
Annual Cash Flow After All Debt: $197,921
Payback on Your Cash: 7.8 months
DSCR: 2.59x (Bulletproof target: 2.0x)
I ran this through the Bulletproof calculator at DealScore Pro - you can plug in any deal you're looking at and get the same scoring in 60 seconds.
RED FLAGS AND POSITIVES
What's Working:
The DSCR comes in at 2.59x - well above the 2.0x Bulletproof floor - and even under a 20% revenue stress test it holds at 2.07x. That is serious downside protection. The purchase multiple sits at 2.88x SDE, which is reasonable for a business generating $3 million in revenue with a 45-year operating history.
Ninety percent referral-driven revenue means this business has a moat that money cannot buy. Competitors can undercut on price, but they cannot replicate 45 years of trust in affluent neighborhoods. The entire crew is W-2 with tenure ranging from 5 to 30 years - no subcontractor dependency, no quality roulette.
The seller has operated semi-remotely for five years, which tells you the management structure actually works. A 2-to-4-week backlog with minimal seasonality means predictable cash flow, not feast-or-famine cycles.
Watch Out For:
No year-over-year revenue data was provided. A 45-year-old business could be riding a long, slow decline and still show healthy trailing twelve-month numbers. You need at least three years of tax returns to confirm the trend line before moving forward.
Working capital information is missing entirely. At $3 million in revenue, you're looking at a $750,000 annual operating budget. Three months of working capital means you need roughly $750,000 available beyond your down payment and closing costs. That is a significant capital requirement, and it changes the total cash-at-close number dramatically.
The $6,300 monthly lease on Ventura Boulevard is manageable now, but confirm the renewal terms. A lease renegotiation in a prime Southern California corridor could eat into margins fast. Also verify whether the $115,000 in FF&E valuation is current - vehicles and tools in a trade business depreciate hard.
THE ANALYSIS
Here's what the math shows. You put $128,000 down on a business that's been generating cash for 45 years, and you're looking at nearly $198,000 in annual owner cash flow after all debt service and a general manager replacement salary. Your payback period is under 8 months. On the numbers alone, this deal has real potential.
The referral engine is the real asset here. When 90% of your revenue comes from people who already trust you, your customer acquisition cost is essentially zero. That is rare in any industry - in home services, it's almost unheard of at this scale. Smart buyers look at that number and see a business that would survive an economic downturn far better than a competitor spending $15,000 a month on digital ads.
But here's what most people would miss. The listing mentions $3 million in gross revenue in the header and $2.9 million in the description. That discrepancy needs an answer. It could be rounding, it could be a decline, or it could be sloppy broker work - and each of those tells you something different. Run the actual trailing numbers through DealScore Pro with the verified figures before you get excited about the headline SDE.
The growth levers are real - digital marketing, commercial work, designer partnerships - but price them as upside, not as the reason to buy. You buy this deal for the $445,000 in cash flow and the 45-year moat. Everything else is bonus. The real question is whether three years of tax returns confirm the story the listing is telling.
MIKE'S VERDICT
NEEDS MORE DATA
This deal has the bones of a Bulletproof acquisition. The debt service coverage is strong, the purchase multiple is reasonable, and the seller is willing to carry a note and support a long transition. What's missing are the two data points that separate a smart buy from an expensive lesson - verified year-over-year revenue trends and a clear picture of working capital requirements. Get three years of tax returns, confirm the revenue trajectory, and nail down the working capital number. If those come back clean, this moves from Worth A Look to the top of your deal flow.
Want to learn how to evaluate deals like this yourself? I break down the entire Bulletproof method - the same criteria I just used on this deal - in a free 28-minute masterclass. Watch the Free Masterclass
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