This company is a leading manufacturer and lessor of equipment for fitness clubs. The company offers its products by sale or lease. Their lease is a popular option for their customers and a profitable stream of cash flow for the business. There is no down payment or cumbersome application. The leasing program is structured so the customer pays weekly based on their usage of equipment. The company collects its lease payments by automatic ACH withdrawal from the customer checking account and an invoice and payment is posted to the customer’s account automatically. The process is simple.

The company uses a variety of sales and marketing techniques to get its products into the marketplace. Leasing is popular with customers and also provides more profit for the company.

All manufacturing is done in the United States. This brand has enjoyed an impeccable reputation for many years. Their products are known for their high quality and excellent return on investment. Many of their products have been used for over ten years on a commercial basis. The equipment has several competitive advantages, including taking up less space and requiring minimal maintenance.

The company uses sub-contractors to manufacture the components for its products and does assembly and testing in-house. It operates out of one plant where it also ships all of the products and replacement parts. There is plenty of room for growth. Sales of replacement parts is a large, and profitable, part of the business.

As of March 31, 2016, the revenues for the trailing twelve months were $1,900,000 and the owner’s cash flow was $600,000. The business, including all of the FFE is offered at $395,000. The inventory, about $350,000 in value, which must be included, and leases receivable are additional. As of June 1, 2016, the total value of these was about $1,350,000. The seller will offer a 10% discount on leases receivable to a cash buyer.

The business leases its space and it is expected that a buyer will be able to negotiate an acceptable new lease with the landlord. All of the FF&E used in the business are included in the sale.

Marketing and sales efforts have not been maximized. Increasing them is likely to achieve more sales, leases, and profits. There is also the potential to adapt the equipment for additional uses.

Posted Apr 6, 2016

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