Business Broker:

Mr. John Doe CBB, CBI, M&AMI

SW 2nd Street, Miami FL 33130
C. +1 (555) 555-1234 | P. +1 (555) 555-4321
john@tbba.com| www.tbba.com

CONFIDENTIAL
INFORMATION
MEMORANDUM Price: US$1,950,000.00
plus Inventory (estimated at
$2,500,000)
This Confidential Information Memorandum is provided to Prospective Buyers
subject to the terms and conditions of the Disclaimers and Notices contained
herein. This document has been prepared by the Marketing Department of The
Business Brokerage Agency under the supervision of the Brokerage Principal,
Ms. Jane Doe. CONFIDENTIAL AND COMMERCIALLY SENSITIVE.
The secret
to success
is having
the courage
to embrace
opportunity
 Welcome
MESSAGE

Hello -

My name is John Doe and I am a Business Broker at The Business

Brokerage Agency.

On behalf of the entire team at The Business Brokerage Agency, I

am pleased to present Prospective Buyers with a truly outstanding
opportunity: the acquisition of “BlackHorse Cleaning & Janitorial
Supplies”, situated at 4847 Sandy Glen Way, Wimauma, FL 33598,
USA.

We have prepared this Confidential Information Memorandum

with the purpose of providing the reader with a good general
understanding of what is on offer.
Mr. John Doe
CBB, CBI, M&AMI However, it is important to point out that the purpose of this
Business Broker document is not to provide the reader with absolutely everything
that they must know. This will come in two additional stages: the
first being the “Business Inspection”, when the reader will have the
opportunity to see the business and have an informal meeting with
+1 (555) 555-1234
the owners to ask further questions.
+1 (555) 555-4321
john@tbba.com Following this, if a “Conditional Offer” is forthcoming, the reader will
be able to conduct a Due Diligence with the assistance of a qualified
www.tbba.com
professional to review all relevant financial information.

In any event, we hope you will find this document both informative
CBB: Certified Business Broker and comprehensive. After reading it, we invite you to contact us to
CBI: Certified Business discuss it further and schedule a Business Inspection.
Intermediary

M&AMI: Mergers & Acquisitions Sincerely,

Master Intermediary

John Doe
 Table of
CONTENTS

1. DISCLAIMERS & NOTICES 4. LOCATION

1.1 General Disclaimer 05 4.5 Lease Agreement 36

1. DISCLAIMERS & NOTICES 5. AQUISITION

1.2 Financial Disclaimer 06 5.1 List of Assets 37

1. DISCLAIMERS & NOTICES 5. AQUISITION

1.3 Non-Disclosure Agreement 07 5.2 FF&E Schedule 38

1. DISCLAIMERS & NOTICES 5. AQUISITION

1.4 Acknowledgement by Seller 08 5.3 Intellectual Property 39

2. INTRODUCTION 5. AQUISITION
2.1 Our Agency 09 5.4 Licenses & Permits 40

2. INTRODUCTION 6. FINANCIALS
2.2 Buyer Education 10 6.1 Financial Summary 42

2. INTRODUCTION 6. FINANCIALS
2.3 Executive Summary 11 6.2 Trading Statement 44

2. INTRODUCTION 6. FINANCIALS
2.4 Key Acquisition Highlights 12 6.3 Profit & Lost Statement 46

3. GENERAL INFORMATION 6. FINANCIALS

3.1 Business Overview 13 6.4 Adjustment Explained 47

3. GENERAL INFORMATION 6. FINANCIALS

3.2 Business History 14 6.5 Add-back Adjustments 49

3. GENERAL INFORMATION 6. FINANCIALS

3.3 Business Timeline 16 6.6 Financial Analysis 50

3. GENERAL INFORMATION 7. ADDITIONAL INFORMATION

3.4 Product Range 17 7.1 Competitive Analysis 53

3. GENERAL INFORMATION 7. ADDITIONAL INFORMATION

3.5 Online Footprint 19 7.2 Industry Report 54

3. GENERAL INFORMATION 7. ADDITIONAL INFORMATION

3.6 Online Reputation 20 7.1 Competitive Analysis 53

3. GENERAL INFORMATION 7. ADDITIONAL INFORMATION

3.7 Customer Base 21 7.2 Industry Report 54

3. GENERAL INFORMATION 8. SWOT ANALYSIS

3.8 Supplier Base 23 8.1 SWOT Analysis Explained 57

3. GENERAL INFORMATION 8. SWOT ANALYSIS

3.9 Systems & Processes 24 8.2 Business Strengths 59

3. GENERAL INFORMATION 8. SWOT ANALYSIS

3.10 Strategic Direction 25 8.3 Business Weaknesses 60

3. GENERAL INFORMATION 8. SWOT ANALYSIS

3.11 Business Ownership 26 8.4 Business Opportunities 61

3. GENERAL INFORMATION 8. SWOT ANALYSIS

3.12 Internal Structure 27 8.5 Business Threats 62

3. GENERAL INFORMATION 9. CONCLUSION

3.13 Photo Gallery 29 9.1 Concluding Message 63

4. LOCATION 9. CONCLUSION
4.1 Strategic Position 31 9.2 Frequently Asked Questions 64

4. LOCATION 9. CONCLUSION
4.2 Maps & Distances 32 9.3 Data Room 65

4. LOCATION 9. CONCLUSION
4.3 Country Profile 33 9.4 Next Step 66

4. LOCATION 9. CONCLUSION
4.4 Business Premises 35 9.5 Get in Touch 67

4
 1.1 General
DISCLAIMER

The information presented in this Conf idential strongly recommends that prospective Buyers of
Information Memorandum is highly sensitive and the business seek their own independent legal,
conf idential and is for use only by those who have accounting, technical and f inancial advice and make
signed a Conf identiality Agreement for the purpose their own enquiries and conduct their own due
of considering the business described herein as an diligence of the business.
acquisition.
Each and every opinion or recommendation that
This Conf idential Information Memorandum and The Business Brokerage Agency has set forth in this
the information presented shall be treated as secret prof ile is held by The Business Brokerage Agency, its
and conf idential and no part of it shall be disclosed directors, off icers, contractors and employees in good
to others, except as provided in the Conf identiality faith and on the basis the information supplied by
Agreement, nor shall it be reproduced, duplicated, the Seller(s) of this business is accurate at the time of
or revealed, in whole or in part, or used in any other writing this prof ile, and each and every opinion and
manner without prior written permission. recommendation set forth in this prof ile is held, made
or stated on the following conditions:
Should there be no interest in the business as
an acquisition, the Conf idential Information ■ The Business Brokerage Agency makes no
Memorandum and all information shall be promptly invitations to any person to rely on any such
destroyed or returned to The Business Brokerage opinion or recommendation;
Agency.
■ The Business Brokerage Agency accepts no
The statements and f inancial information related responsibility should The Business Brokerage
to the subject business set forth in this Conf idential Agency its directors, off icers, contractors or
Information Memorandum are based solely on employees become aware of any change to or
information supplied by the Seller(s) of the business accuracy in the information supplied by the Seller
to The Business Brokerage Agency - and The Business on which the opinion or recommendation is based;
Brokerage Agency, its directors, off icers, contractors
and employees hold no belief as to the accuracy or ■ The Business Brokerage Agency shall not be
otherwise of such information supplied. under any liability for loss or damage howsoever
occasioned as a result of any reliance by any
The statements and f inancial information are passed person on any such opinion or recommendation,
on by The Business Brokerage Agency via this whether or not such loss or damage was due to
Conf idential Information Memorandum on behalf of any negligence, default, or lack of care by The
the Seller(s) for whom The Business Brokerage Agency Business Brokerage Agency its directors, off icers,
acts solely as an agent. contractors or employees.

Accordingly, The Business Brokerage Agency, its By accepting this Conf idential Information
directors, off icers, contractors and employees do not Memorandum and proceeding with its reading
and cannot warrant or guarantee the accuracy of such and analysis, the recipient acknowledges being in
statements and f inancial information relating to the agreement with all terms and conditions set forth in
business, and they accept no responsibility in any way the General Disclaimer above.
whatsoever in respect to any errors or omissions in
respect to such statements and f inancial information
howsoever caused. The Business Brokerage Agency

5
 1.2 Financial
DISCLAIMER

The Financial Information container herein and

in the document “Prof it & Loss Analysis” has been By accepting this Conf idential
reproduced using information provided to The Information Memorandum and
Business Brokerage Agency by the Seller(s). The proceeding with its reading and analysis,
Business Brokerage Agency has not verif ied the
the recipient acknowledges being in
accuracy of these records and therefore cannot and
do not make any representation as to their accuracy.
agreement with all terms and conditions
The Buyer(s) and/or their accountant/f inancial advisers set forth in the Financial Disclaimer.
should make their own enquiries.

In the event that a Buyer is told or otherwise led

to believe by any parties that the takings in the
business exceed those records lodged with the
Internal Revenue Service, The Business Brokerage
Agency expressly dissociate ourselves with any such
representation and would strongly suggest that the
Buyer and/or their accountant or f inancial advisers
disregard any such representation and have regard
only to the records disclosed to the Internal Revenue
Service - subject to our previous warning that we
cannot and do not vouch for them.

Add-Back Adjustments presented in this Conf idential

Information Memorandum are estimations only and
are neither comprehensive nor complete - further
investigation on these is necessary.

These numbers should serve as a guide only during

the Enquiry Process and should not be used in
the Due Diligence process - rather, the Financial
Statements produced by their Accountants should, in
conjunction with:

• Company Tax Returns;

• Quarterly Statements;
• IRS Portals;
• Invoices and Receipts and;
• Any other supporting documentation that the
Buyer and/or their accountants or f inancial
advisers deem appropriate and relevant.

All f inancial f igures and Information have been

provided in good faith, and while it is our belief these
are true & accurate, it is the responsibility of any
Potential Buyer to verify all information provided with
the assistance of a qualif ied professional. The Agency
strongly recommends all Potential Buyers take this
course of action.

6
 1.3 Non-Disclosure
AGREEMENT

In consideration of the Seller providing to The Business ■ VII. Not to communicate directly or indirectly the
Brokerage Agency, this Conf idential Information Recipient’s interest in the business offered by the
Memorandum containing f inancial and any other Seller with customers, suppliers or employees of
information relating to the business, (”Conf idential the business or the Seller;
Information”) to the Recipient, the Recipient
acknowledges the Conf identiality of the Information ■ VIII. Not to disclose to any party (other than those
and the potential damage to the Seller and the mentioned above), that discussions have been
business of a breach of conf identiality and undertakes: held in relation to the Seller, the business or the
opportunity to purchase the business;
■ I. To treat the Conf idential Information as private
and conf idential; The Recipient makes this undertaking in favor of The
Business Brokerage Agency and the Seller, and both
■ II. To use the Conf idential Information solely for the parties undertake to keep the Recipient’s interests
purpose of evaluating the opportunity to purchase conf idential.
the business f rom the Seller, and for no other
purpose; In the event that the Recipient eventually purchases
the said business, whether as an individual, company
■ III. Not to use or allow the use of the Conf idential or partnership privately, through another agent or any
Information to be used to gain any advantage over other source, the Recipient undertakes to compensate
the Recipient or any other party; The Business Brokerage Agency for any damages and/
or loss of commission.
■ IV. Not to allow the use of the Conf idential
Information to disadvantage the Seller or the The Conf idential Information Memorandum and other
business; information is provided by The Business Brokerage
Agency on the instructions of the Seller(s) of this
■ V. Not to disclose the Conf idential Information business and has been prepared f rom information
other than to professional advisors, directors or supplied by the Seller(s) and their Accountants.
employees of the Recipient who have agreed The Recipient acknowledges that this information
to be bound by this Conf identiality Agreement, is further provided on the basis that the contents
and who undertake to maintain strict security are accurate and correct. However, The Business
over the Conf idential Information, and where Brokerage Agency and its management and off icers
the Recipient is acting on behalf of its client, the disclaim any express or implied warranty thereto.
client also agrees to be bound by this Conf idential
Agreement; By accepting this Conf idential Information
Memorandum and proceeding with its reading
■ VI. To return all Conf idential Agreement and and analysis, the recipient acknowledges being in
related notes or copies thereof upon request by agreement with all terms and conditions set forth in
the Seller or The Business Brokerage Agency; the Non-Disclosure Agreement above.

7
 1.4 Acknowledgement
BY SELLER

I, Mr Joseph Smith, President and CEO of “BlackHorse LLC, d.b.a. “BlackHorse Cleaning
& Janitorial Supplies” located at 4847 Sandy Glen Way, Wimauma, FL 33598, USA, hereby
state and declare that I have instructed The Business Brokerage Agency to prepare this
Conf idential Information Memorandum.

Furthermore, I hereby conf irm that all the information contained herein is true and
accurate, at the time of the writing of this document, to the very best of my knowledge
and has been provided to The Business Brokerage Agency by myself in good faith.

Should any signif icant changes to the business and/or its operation and/or f inancials
occur during the sale process, that may contradict or change any of the information
contained herein, I commit myself to promptly advise The Business Brokerage Agency in
writing accordingly.

I would expect any Prospective Buyer to seek professional advice prior to making a
decision in regards to the purchase of this business.

Signed & Dated:

Joseph Smith
01/08/2020

8
 2.1 Our
Agency

T
he Business Brokerage Agency is a lower Middle- With increasingly comprehensive solutions and
Market fully-licensed agency specializing in the partnerships with Accounting, Legal, Financial and
sale of businesses between US$1M and US$10M. Migration f irms, The Business Brokerage Agency
assists sellers by marketing their businesses for
The Business Brokerage Agency’s trajectory began in sale through their business brokers, networks and
October 1984 when it was established by Ms. Jane Doe marketing platforms in order to attract and prof ile
- an experienced entrepreneur with a background in prospective buyers so as to effectively sell their
Manufacturing and Wholesaling. businesses.

Over the last 30+ years, The Business Brokerage Our team is comprised of professionals with extensive
Agency has grown to become a reference in enabling experience in intermediation, with f irst-hand
commercial transactions in the most diverse segments market knowledge and a true passion for delivering
of the US economy. exceptional outcomes to Sellers and Buyers alike.

OUR AGENCY IS BUILT ON THE FOLLOWING 6 PILLARS

Integrity: Passion Customer

We pride ourselves in We are passionate
Satisfaction
being able to conf idently about helping Sellers Whether you are a Seller
say no if ever conf ronted and Buyers realise their or a Buyer, we view you
with a situation that dreams. as a Customer and your
challenges our values. satisfaction is our end-goal.

Professionalism Continuous Success

Improvement We believe that success
We are professionals in Business Sales is
and conduct ourselves We believe that
directly correlated with
accordingly at all times. stagnation is not an
our joint efforts – as such,
option – if we are not
we apply full dedication
moving forward, we
to each sale.
would be moving
backwards.

9
 2.2 Buyer
EDUCATION

T
he purchase of
a business is
one of the most RESEARCH & Buyers are urged to take their time and
ANALYSIS undertake careful research and analysis of
daunting and complex
different aspects of the business - not solely
endeavours that an f inancial. Businesses tend to be multilayered
investor can undertake. and layers tend to have their own set of
particularities to be analysed.
It is a multi-faceted process
that presents a number
of challenges, even to the
most experienced Buyer. SKILLS & Considering realistically one’s set of skills
EXPERTISE and expertise is another crucial factor when
reviewing the compatibility of a business - it
Unprepared or hasty
is important to acknowledge one’s limitations
decision-making can lead
and to consider whether or not these can be
to capital loss. Therefore,
detrimental to the running of the business
it is imperative to have
and whether they can be overcome through
a support system set up
training.
to advise and guide you
throughout the process.

The Business Brokerage

FINANCIAL This is generally the primary factor that guides
Agency acts in a
CRITERIA investment decisions. Buyers must consider
responsible fashion in order more than just numbers on a page, but also
to assure the legitimacy analyse trends and other external factors such
of each purchase and the as dependency on any single customer or
satisfaction of the Seller supplier, among others.
and Buyer alike.

Our Brokers have extensive

industry knowledge and INDUSTRY Buyers ought to take into consideration
are not interested in SECTOR whether this Industry is one that has presented
leading Buyers towards any growth, decline or stability and whether this
investment that they do industry is at risk of any destabilizing influence
not believe to be adequate. that may affect overall performance.

As such, we always advise

Buyers to carefully consider
their options and always
act on the side of caution ADDITIONAL There are a myriad of additional factors that
by taking the points below CONSIDERATIONS must be taken into consideration - including
into careful consideration: geographic location, the history of the
business, competition, security of lease, reason
for sale as well as whether the pricing is
justif iable.

10
 2.3 Executive
SUMMARY

BUSINESS LOCATION INDUSTRY HISTORY

NAME 4847 Sandy Glen Way, Wholesale, Established in 2000,
BlackHorse Cleaning Wimauma, FL 33598 Cleaning Products only 2 owners
& Janitorial Supplies including Seller

LEASE TRADING STRUCTURE REASON FOR

HOURS 7 Full-Time Staff, SALE
Commenced Monday to Friday 2 Part-Time Staff,
Seller wishes to retire
1st Aug 2011 8.00am to 5.00pm, 2 Casual Staff and
for 3x5 year terms No Weekends or 1 Full-Time Working
Public Holidays Owner

REVENUE GROSS PROFIT NET EARNINGS SDE (SELLERS

$6,555,732 Annual $1,737,752 Annual (EBIT) DISCRETIONARY
(F.Y. 2022) (F.Y. 2022) EARNINGS)
$641,331 Annual
(F.Y. 2022) $833,425 Annual
(F.Y. 2022)

FF&E VALUE ASKING PRICE INVENTORY R.O.I RATE

$188,300 $1,950,000 $2,500,000 42.73%
approximate plus Inventory approximate Value Return on Owner’s
Furniture, Fixtures & Investment Rate
Equipment Value

11
 1 3
ROBUST FINANCIAL RECESSION-PROOF
PERFORMANCE PRODUCT RANGE
BlackHorse Cleaning & Janitorial
The product range, being Fast-Moving
Supplies has had a steadily increasing

2
Consumer Goods (FMCG) for the Hygiene
financial performance - both in terms
and Hospitality Industries are Essential
of revenue and SDE, while at the same
Goods, being protected from major
time managing to maintain overheads
fluctuations in the economy to a very
and cost of goods sold stable.
large degree.
LONG AND STABLE
BUSINESS HISTORY
4 Established in 2000, BlackHorse can
safely be deemed a well-established
business. Moreover, it has only had two
WELL-DEVELOPED owners including the Seller, who has
SYSTEMS & PROCESSES owned and operated the business for the
last seventeen (17) years.
Having operated for the last eighteen
years, the business has developed and
perfected systems and procedures
to maximize outcomes and ensure
efficiency positively influences

2.4 Key Acquisition

profitability.

HIGHLIGHTS
5
EXCEPTIONAL GROWTH
OPPORTUNITIES

7
There are boundless opportunities for
further development - both through
diversification, expansion into new
markets and segments as well as
increasing growth in the core business
by exploiting the strength of the brand LOW CONCENTRATION
portfolio. IN CLIENT BASE
As evidenced by its stellar online reviews
and high rate of repeat business,

6
BlackHorse has grown to become a

8
leading name in its market. The business
is renowned for reliability as well as their
subject expertise in the product range.
BUOYANT AND DIVERSE
TARGET MARKETS STRONG BRAND NAME &
MARKET REPUTATION
The target markets for the business
are limitless considering that any As evidenced by its stellar online reviews
establishment - from a private residence and high rate of repeat business,
to a large institution (I.e. Hospital or BlackHorse has grown to become a
College Campus) - would require leading name in its market. The business
Cleaning, Janitorial and Consumable is renowned for reliability as well as their
products. subject expertise in the product range.

12
 3.1 Business
OVERVIEW

The Business Brokerage

Agency is pleased to introduce
prospective Buyers to an
outstanding acquisition
opportunity: BlackHorse
Cleaning & Janitorial Supplies. BlackHorse has a focus on consumer satisfaction
through the provision of comprehensive
solutions coupled with what has been described

S
ituated at 4847 Sandy Glen Way, Wimauma by the business’ largest client as ‘flawless and
FL, this business was established in July impeccable customer service’.
of 2000 and was taken over by the current
owner in October of 2004. While the business has placed a great deal of
emphasis in strategic relationships with the
The business’ core activity is the supply of core target market (cleaning contractors) the
cleaning, janitorial and consumable goods for the ownership chose to diversify its folio by expanding
Hygiene and Hospitality Industries. towards the Hospitality Industry as well as
providing to large End-Users, who are reached
Over its twenty-one-year history, the business has through a Tender process.
nurtured strong relationships with a number of
distinctive suppliers whose products are regarded In doing so, the business has broadened its client
as being the very best in the market. base massively, as will be explored in Section 3.5,
and it has positioned itself for continued and
As will be noted further ahead in this Conf idential sustained growth.
Information Memorandum, this has been a large
part of what has driven the exceptional growth Furthermore, the owner believes that the business
that the business has experienced. will continue growing in pace with the masssive
growth experienced by the Floridian economy as a
Cleaning and Hygiene Consumable Products whole.
have broad appeal across a number of
developed and emerging market segments BlackHorse sees its role as educating the
- indeed, it can be stated that this appeal is consumers on the advantages of its product range
universal given the fact that there is no entity and offering a service that exceeds its customers’
that does not require them. needs.

While operating in a mature and over-saturated With a well-built internal structure and effective
industry, BlackHorse considers that the business operational systems and procedures in place, it is
model it adopted following the current owner’s believed that the transfer of ownership ought to
takeover in 2004 has been the primary driving be simple and straight-forward.
force behind the business growth.

13
 3.2 Business
HISTORY

“BlackHorse Cleaning and

Janitorial Supplies’ long history
is a testament to the resilience
of its business model.”

B
lackHorse Cleaning & Janitorial Supplies
was established in July 2000 by Mr Jim
Kazakis - a cleaning industry professional
who identif ied that most local cleaning
contractors were travelling as far as Tampa
as there was no presence in and around the
Hillsborough County, even though a number
of customers lived near the area. The business
was originally set up in his residence but
as it expanded, premises were rented in a
commercial street.

Around mid-2004, Jim was approached by

Mr Joseph Smith, an entrepreneur with a
corporate background as a FMCG Executive
who wanted to transition into small business
ownership.

In October 2004, Joseph took over the business

and expanded it greatly through aggressive
marketing and via the acquisition of smaller
local competitors.

As the business continued to grow f rom

strength to strength, Joseph relocated the
business to its current premises on Sandy
Glen Way in January 2011 in order to support
increased demand and to allow for future
growth while taking into consideration the
space required to support it.

14
Leaving the Corporate
World and purchasing
BlackHorse Cleaning
and Janitorial
Supplies’ has been
one the best decisions
I have ever made. It
has allowed me to
comfortably provide for
my family, have a job
I love and to live the
American Dream.”

( J. Smith, Seller)
 3.3 Business
TIMELINE
July 2000

BlackHorse Cleaning
& Janitorial Supplies
Sept 2003
is established by Mr
Jim Kazakis after he As the business
identifies a need in expands, thanks to Oct 2004
the local area for such Jim’s contacts in the
a business catering to local industry, the After being
cleaning contractors business relocates approached by Mr
Nov 2006
- first trading from to a commercial Joseph Smith, an
home with no staff. position on FL-674 in FMCG executive Following an
Wimauma, with the transitioning into small aggressive marketing
intent of building retail business ownership, campaign and a
sales and to support BlackHorse Cleaning re-structuring of the
Inventory storage. & Janitorial Supplies is operations, a focus
Around this time, the sold. is shifted from retail
business begins to operations back to
employ staff members wholesale. Sales at this
for deliveries. stage have essentially
doubled since the
take-over.

Jan 2007

BlackHorse acquires a
small local competitor
Aug 2011
in Apollo Beach,
Following continued
absorbing all the
rapid growth,
May 2014
clientele but none
of the overheads. BlackHorse relocated
Simultaneously, it to larger premises Mr Joseph Smith
gains distributorship at a cheaper rent employs two
of Kimberly-Clark at 4847 Sandy Glen Managers to assist him
products and it opens Way, Wimauma. with the daily activities
a Paper Consumable The business also of the business. As he
range in its product acquires another slowly approached
portfolio. small competitor in St retirement age and
Petersburg and again, plans for a transition.
absorbs clientele only
and no overheads.
Around this time it
gains distributorship
of Polivac range of
machinery.

16
 3.4 Product
RANGE

B
lackHorse Cleaning & Janitorial Supplies sources products of the
highest quality f rom trustworthy vendors, simultaneously assuring
they can be priced at competitive rates while still allowing for strong
prof it margins for the business.

Cleaning Toilet Paper Paper Hand

Chemicals Rolls Towels
A full range of cleaning Toilet Paper Rolls, Jumbo Rolls Hand Towel Rolls and
chemicals for all applications and Interleaved Toilet Paper in Interleaved Hand Towels
is available in 16 oz., 1.5 gallon multiple ply’s and packaging. available in different sizes to
and 4 gallon containers. Brands include: Sunrise fit different dispensers. Brands
Brands include: Alpine Tissues, Mel, Kimberley-Clark, include: Sunrise Tissues, Mel,
Chemicals, Johnson-Diversey ABC, Livi and Tork. Kimberley-Clark, ABC and Tork.
and Research by Oates.

Garbage Bags Cleaning Spare

and Bin Liners Machinery Parts
A variety of garbage bags A range of new machinery A full range of parts available to
and bin liners varying in from backpack vacuum suit different types of machines,
size from 4.8 gallons to 63 cleaners for commercial/ especially vacuum cleaners,
gallons in Black, Clear and industrial use to large floor including Heads, Hoses, Bags
White colour options. Brands scrubbers. Brands include and others. Brands include
include Mel and Maxpak. PacVac and Polivac. CleanStar.

17
 Buckets, Cloths and Sponges and
Baskets & Bin Wipes Scourers
A full range of durable A full range of cleaning cloths A full range of sponges and
Cleaning Buckets, as well as and wipes in various fabrics, scourers in various fabrics,
cleaning baskets and bins. colour-coded for OH&S. colour-coded for OH&S. Brands
Brands include: Sabco, ED Brands include: Sabco, ED include: Sabco, ED Oates and
Oates and NAB-Clean. Oates and NAB-Clean. NAB-Clean.

Brooms and Cleaning Mops and

Floor Brushes Gloves Mop Heads
A full range of brooms, floor Gloves in different sizes and A full range of mops and
brushes and floor scrubs for different fabrics (powder, handles for different
different applications and in vinyl or latex) for cleaning applications, colour coded for
varying sizes. Brands include applications. Brands include OH&S. Brands include Mel and
Sabco, ED Oates and NAB- MaxValu and Mel. ED Oates
Clean.

Washroom Window Disposable

Dispensers Cleaning Gear Supplies
A variety of soap and hand A full range of commercial A limited range of disposable
towel dispenses in metal and window cleaning equipment supplies for the Hospitality
stainless steel for different in varying sizes. Brands Industry. Brands include
washrooms. Brands include include Sabco, ED Oates and Tailored Packaging.
NAB-Clean NAB-Clean.

18
 3.5 Online
FOOTPRINT

Website
www.blackhorsecleaningjanitorial.com

Miami Chamber of Commerce

www.miamicoc.gov/
blackhorsecleaningjanitorial

Facebook
www.facebook.com/
blackhorsecleaningjanitorial
Instagram
www.instagram.com/
blackhorsecleaningjanitorial

Twitter
www.twitter.com/
blackhorsecleaningjanitorial

LinkedIn
www.linkedin.com/
blackhorsecleaningjanitorial

19
 3.6 Online
REPUTATION

4.6 out of 5 4.2 out of 5 4.7 out of 5

Based on 402 Reviews Based on 188 Reviews Based on 94 Reviews

“I highly recommend “Finding the right “ Excellent place to buy all of

BlackHorse Cleaning & cleaning supplies for your supplies! The cleaning
Janitorial Supplies. They are my new business was chemicals are of the highest
easy to communicate with a challenge until I quality and the MEL brand
and are definitely a one- discovered BlackHorse of paper products offers
stop shop for all our needs. Cleaning & Janitorial excellent value for money!”
I can’t recommend them Supplies. Their wide
(A Shelman, October 2022)
enough.” range of products has
made a huge difference
(C Michaelson, May 2022)
for my business and
team. The products are
safe to use, reliable, and “I just plain love BlackHorse
“I have been using competitively priced. Cleaning & Janitorial
BlackHorse Cleaning & Thanks to the team at Supplies! They have gotten
Janitorial Supplies for five BlackHorse Cleaning & me out of so many jams
years now, and I will always Janitorial Supplies!” with their incredible
be a loyal customer. The
(K Ramez, April 2023) advice and policy of always
products are not only
keeping stock on hand.
high quality, but they are
My entire company buys
affordable too. I highly
“BlackHorse Cleaning their products and I would
recommend BlackHorse for
& Janitorial Supplies is never allow for this to be
all your janitorial and cleaning
amazing when it comes to changed. Just a good,
supply needs!”
customer service! Fast and honest, helpful company!”
(V Ortega, October 2022) reliable. They got all the (G Angelis, November 2021)
cleaning needs under one
roof! Highly recommended.”
(P Carmello, July 2022)

20
 3.7 Customer
BASE

1. CLEANING CONTRACTORS

I
nitially, the target market for
Accounting for an estimated 60% of the
BlackHorse Cleaning & Janitorial total sales, this client segment is certainly
Supplies was limited to Cleaning the most important.
Contractors who were located near
In terms of its purchase of Consumable
the Wimauma region. Products (Paper Products, Soap and Bin
Liners) they serve as re-sellers of the
products.
As the business expanded, so did its
clientele and the current owner, Mr This is a secure and steady stream of
Joseph Smith, sought to diversify revenue as Cleaning Contractors need to
constantly replace the material - a number
the types of clients in addition to
of items (for example, mops) can only be
ensuring that no single client would used so many times before needing to be
hold too much of a prominent disposed of.
position in the sales share of the
The majority of Cleaning Contractors whom
business. the business deals with are Commercial
Cleaners, offering their services to Schools,
Colleges, Individual Off ices, Off ice Buildings,
The three major target markets of
Hospitals and Medical Clinics.
the business are as follows:
The Seller estimate the business has
CUSTOMER SEGMENTATION approximately 500 Cleaning Contractors
who can be deemed as Regular Clients.

15%
2. FOOD & BEVERAGE

25% Accounting for an estimated 25% of the

total sales, this client segment began to be
explored by the owner around 2006.

60% This includes Clubs, Bars, Restaurants and

Coffee Shops that purchase goods (primarily
Consumable Products) on a regular basis.

Cleaning Contrac- The Seller estimate the business has

tors approximately 200 such establishments
Food & Bever- who can be deemed as Regular Clients.
age
End-Users

21
 3.7 Customer
BASE

3. END-USERS

T
he owner of the business
The third and f inal segment comprises around
has consciously made 15% of the total sales.
an effort to dilute the
This client category encompasses end-
concentration and importance users such as Councils, Off ices or Schools
of any single client in order to who purchase their cleaning supplies
privately - rather than through their Cleaning
minimise the risk component Contractors.
in the event of any issue such
The larger clients are won by Tender - while
as bad debts and/or the loss of
smaller ones can be reached and coverted
the client. through standard marketing efforts.

The Sellers estimates the business has

approximately 20 End-Users who can be
deemed as Regular Clients

CLIENT #1 CLIENT #2 CLIENT #3

COMMERCIAL CLEANERS END-USER: TRADE CATERING GROUP
11.2% OF TOTAL SALES SCHOOL 4.5% OF TOTAL SALES
(F.Y. 2022) 6.4% OF TOTAL SALES (F.Y. 2022)
(F.Y. 2022)
This is the longest- This Catering Group
standing client of the focuses on large events
This is one of the
business - having traded and on corporate
business’ most recent
with them since 2002 catering and has been
clients as the Seller
and having experienced a loyal client of the
submitted a Tender for
extraordinary organic business since 2011.
the supply in 2007 and
growth over this period, won a 5-year supply
becoming one of The relationship
contract (which is
the most prominent between both
performance-based).
commercial cleaning businesses is excellent
companies in the and purchases
This trade school has
State of Florida. The flow in through the
six different campuses
relationship between Purchasing Manager
in Central Florida and
both businesses is on a weekly basis. There
South-Western Florida
excellent and all area is tremendous scope
and orders come in
managers are familiar for growth here with
through the Purchasing
with Purchasing a range of Disposable
Off ice once a month.
Procedures. They are Supplies.
They have, thus far, been
also prompt payers. prompt payers.

22
 3.8 Supplier
BASE

BlackHorse Cleaning & Janitorial Supplies works with a wide

range of Suppliers to ensure a secure supply for its many
products.

A
number of clients award a high degree of importance to the brand - particularly in
terms of Consumable Products (paper products) and Cleaning Chemicals, although
a large section of clients are far more concerned with quality and product eff iciency
than they are with brand naming.

This created an advantageous situation for BlackHorse as it pits competitors against each
other and does not afford them leverage to price their goods at whatever level they deem
appropriate.

Below is a breakdown of expenditure per supplier for the FInancial Year 2022:

SUPPLIER #1
SUPPLIER #10

12% SUPPLIER #2
17%

8%

18% 14% SUPPLIER #3

SUPPLIER #9

6%
11%
3%
4%
7 % SUPPLIER #4
SUPPLIER #8
SUPPLIER #5

SUPPLIER #7 SUPPLIER #6

23
 3.9 Systems &
PROCESSES
BlackHorse Cleaning &
Janitorial Supplies has
instituted a straight forward
process and has been able STAGE 1
to educate most clients and Week
suppliers accordingly.
1
of Month
Receiving

T
he process begins in the f irst week Goods
of the month when the business
has all merchandise delivered to its
Warehousing
warehouse. Orders f rom customers begin to
flow in towards the end of this week.
STAGE 2
On the second week of the month, Week
1-2
orders continue coming in and goods are
separated and order contents are double-
checked by two separate staff members of Month
- including the warehouse manager whose Incoming
job it is to assure that mistakes do not occur.
Orders
On the third and fourth week of the month, Pick & Pack
orders continue to flow in, though in a lesser
intensity than in the f irst and second weeks
of the month.
STAGE 3
During this time, the focus is given to Week
ensure deliveries are made in a timely
fashion and meeting each clients’ special 3-4
instructions in regards to delivery. of
Month
During the fourth week of the month, as
Dispatch
the monthly orders f inish being dispatched,
Purchasing begins by the Purchasing
manager in consultation with both the
warehousing and sales departments. STAGE 4
Simultaneous to all of these activities, the Week
Accounts Payable and Receivable staff
member follows up and f reezes credit, if
4
necessary, throughout the month to any of Month
client that may be overdue in payment. Purchasing

24
 3.10 Strategic
DIRECTION

B
lackHorse’ overall strategic
direction is to spearhead I. EXPLOITING THE STRENGTH
the trend towards increased OF THE PRODUCT
service efficiency and price-
effectiveness with a product-driven PORTFOLIO
offering centered on the customer. BlackHorse carries most of the industry’s strongest
brands. To achieve optimal leverage, the product
The strategic action plan to range is being consolidated parallel to market and
customer segmentation.

increase its market presence has been focused

Theseon therepresent
brands following three
expertise key
and areas:
quality in
products for the cleaning and hospitality industries.

The high quality and brand power complement

the service delivery method, aiming to solidify
BlackHorse’s position with its clients and increase
growth in the core business.

II. EXPANDING INTO NEW

MARKETS AND SEGMENTS
Since the ownership transition in 2004, BlackHorse
has expanded into new markets and segments -
both by geographical expansion, utilizing its sales
team and by exploiting market opportunities.

This has been exemplified when the business

moved from its focus solely on cleaning contractors,
towards the Hospitality Industry, which was at the
time mostly being serviced by suppliers offering
sub-standard products.

III. GROWTH THROUGH

ACQUISITION
A large part of the business’ historical growth is
explained by acquisitions. In 2007, it absorbed a
Moonee Ponds based competitor and in 2011 it
absorbed a Keilor Park-based competitor.

The business has focused its acquisition strategy

in three areas: (i) increasing geographical market
presence, (ii) complementing the product range,
and (iii) adding new markets in key areas.

25
 3.11 Business
OWNERSHIP

“The last seventeen years at the helm of BlackHorse have been a blessing
- they have given me the resources to comfortably retire, and with the
knowledge that I helped build something that will outlast me.”

Mr Joseph Smith - Owner

REASON OWNER’S OWNER’S ROLE

FOR SALE PROFILE AND HOURS

After successfully running the Mr Joseph Smith had a The Owner’s primary role is that
business for the last seventeen background in the corporate of Managing Director - overseeing
years and transforming into world, working with Fast- the work of the Sales Manager,
the powerhouse it is today, Mr Moving Consumer Goods to the Warehousing Manager and
Joseph Smith now wishes to pharmacies and supermarkets the Accounts.
retire and enjoy some well- - with an academic background
earned rest together with his in Business Management, Moreover, the Owner presently is
grandchildren. specializing in Supply Chain responsible for procurement as
Management. well as Human Resources duties.

His hours are 9.00am to 06.00pm

f rom Monday to Friday.

26
 3.12 Internal
STRUCTURE

Staff #1 Staff #5
Position: President Position: Warehousing Assistant
Role: General Management, Role: Storage, Pick & Pack, Despatch,
Purchasing and Human Resources Status: Full-Time
Status: Full-Time Length of Service: 6 Years
Length of Service: 14 Years Hours: Mon-Fri 7am-3pm
Hours: Mon-Fri 9am-6pm Gross Wages: $48,000 P.A.
Gross Wages: $80,000 P.A.

Staff #2 Staff #6
Position: Warehousing Manager Position: Driver
Role: Storage, Pick & Pack, Despatch, Role: Deliveries, Warehousing Duties
Supervision of Drivers & Warehouse Status: Full-Time
Status: Full-Time Length of Service: 6 Years
Length of Service: 7 Years Hours: Mon-Fri 9am-5pm
Hours: Mon-Fri 7am-3pm Gross Wages: $52,000 P.A.
Gross Wages: $65,000 P.A.

Staff #3 Staff #7
Position: Sales Manager Position: Driver
Role: Sales, Key Account Role: Deliveries, Warehousing Duties
Management, Supervision of Status: Full-Time
Customer Service and Sales Length of Service: 14 Years
Status: Full-Time Hours: Mon-Fri 9am-5pm
Length of Service: 4 Years Gross Wages: $52,000 P.A.
Hours: Mon-Fri 9am-5pm
Gross Wages: $70,000 P.A.

Staff #4 Staff #8
Position: Warehousing Assistant Position: Customer Service
Role: Storage, Pick & Pack, Despatch Role: Enquiries, Order Processing,
Status: Full-Time Complaints Handling
Length of Service: 6 Years Status: Full-Time
Hours: Mon-Fri 7am-3pm Length of Service: 2 Years
Gross Wages: $48,000 P.A. Hours: Mon-Fri 8am-4pm
Gross Wages: $55,000 P.A.

27
 3.12 Internal
STRUCTURE

Staff #9 Staff #11

Position: Sales Representative Position: Warehouse Assistant
Role: Key Account Management Role: Storage, Warehousing Duties,
and New Sales Pick & Pack
Status: Part-Time Status: Casual
Length of Service: 5 Years Length of Service: 2 Years
Hours: Mon-Fri 9am-1pm Hours: As Required
Gross Wages: $32,000 P.A. Gross Wages: $22 per hour

Staff #10 Staff #12

Position: Accounts Position: Storage, Warehousing Duties,
Role: Invoicing, Payments, Wages and Pick & Pack
Admin Work Status: Casual
Status: Part-Time Length of Service: 6 Months
Length of Service: 8 Years Hours: As Required
Hours: Mon-Fri 9am-1pm Gross Wages: $22 per hour
Gross Wages: $29,000 P.A.

MANAGING DIRECTOR
Staff #1

WAREHOUSE MANAGER ACCOUNTS SALES MANAGER

Staff #2 Staff #10 Staff #3

DRIVERS WAREHOUSE STAFF SALES CUSTOMER SERVICE

Staff #6 & 7 Staff #4, #5, #11, #12 Staff #9 Staff #8

28
3.13 Photo
GALLERY

29
3.13 Photo
GALLERY

30
 4.1 Strategic
POSITION

T B
he geographic position
lackHorse Cleaning & Janitorial
of the business in Supplies is situated at:
Hillsborough County
has awarded it a prominent
position in the Industry as 4847 Sandy Glen Way,
it quickly grew to dominate Wimauma, FL 33598
this segment of the market
- while also positioning it
for further growth as this
The business was originally established
area drives much of the having in mind that cleaning contractors
growth seen in the Tampa who resided around the Sun City and
Metropolitan region. were forced to travel to Spring Hill or
Hudson for their Cleaning Supplies.

The business eventually transitioned to

Shell Point Road in Ruskin where it was
at a prime commercial location, though
accordingly the Rent was quite high.
Under the new ownership, the business
transitioned one f inal time as a
commercial location was deemed not
to be a priority as the sales focus were
re-shifted towards Trade Customers, and
the business efforts turned towards a
Delivery Model, with little attention to
Retail.

Moreover, parking at Shell Point

Road was diff icult for clients, suppliers
and staff members - while parking at the
current location is plentiful.

While the business could potentially be

relocated to another locality as far as
Suppliers are concerned, a number of
clients (an estimated 15%) still pick-up
their goods rather than having them
delivered.

In addition, most staff members live

around Wimauma. As such, a shift
towards a farther area could prove to be
problematic in this regard.

31
 4.2 Maps &
DISTANCES

DRIVING
LOCATION DISTANCE

S
TIME
andy Glen Way is
a purely industrial Sun City Centre 7 minutes 2 miles
street, accessible
f rom Coral Springs Willow 13 minutes 7 miles
Boulevard and runs
parallel to Route 301. Balm 16 minutes 8.7 miles

Gulf City 21 minutes 7 miles

Parrish 17 minutes 12 miles

The following are the
distances f rom Wimauma
Fort Lonesome 19 minutes 13 miles
to major local destinations
with high concentrations of
clients: Lithia 28 minutes 21 miles

Fish Hawk 35 minutes 18 miles

Keysville 39 minutes 29 miles

Bloomingdale 32 minutes 17 miles

Apollo Beach 21 minutes 12 miles

32
 4.3 County
PROFILE

H
illsborough County is a county located in the
west central portion of the U.S. state of Florida. A
2019 estimate has the population of Hillsborough
County at 1,471,968 people, which itself is greater than
the populations of 12 states according to their 2019
population estimates. Its county seat and largest
city is Tampa.

Economy Employment by Occupations

The economy of Hillsborough County, The most common job groups, by
FL employs 701k people. The largest number of people living in Hillsborough
industries in Hillsborough County, FL County, FL, are Office & Administrative
are Health Care & Social Assistance Support Occupations (92,555
(93,014 people), Retail Trade (82,167 people), Sales & Related Occupations
people), and Professional, Scientific, (83,488 people), and Management
& Technical Services (63,236 people), Occupations (72,145 people).
and the highest paying industries
are Utilities ($75,431), Management of Domestic Trade Growth
Companies & Enterprises ($61,691), and In 2020, total outbound Florida trade
Professional, Scientific, & Technical was $497B. This is expected to increase
Services ($57,802). 43.6% to $714B by 2045.

Median Household Income Interstate Trade

Households in Hillsborough County, In 2015, the top outbound Florida
FL have a median annual income domestic partner for goods and
of $58,480, which is less than the services (by dollars) was Georgia with
median annual income of $61,937 $19.5B, followed by Texas with $16.6B
across the entire United States. This and California and $11.5B.
is in comparison to a median income
of $54,731 in 2017, which represents a Source: https://datausa.io/profile/geo/hillsborough-
county-fl
6.85% annual growth

33
 POPULATION BUSINESS TOP 3 INDUSTRIES
1,471,968 124,188 Health Care & Social
Assistance (93,014 people),
Retail Trade (82,167
people), and Professional,
Scientif ic, & Technical
Services (63,236 people)

STAFFING EDUCATION HOUSING

Total Employment: High school graduate or Housing Units: 590,779
601,133 higher: 88% Owner-occupied
Total Annual Payroll: Bachelor’s degree or housing unit rate: 58.1%
$30,391,827 higher: 32.7%

FAMILIES EMPLOYMENT INCOME

Households: 516,478 60.8% Working Full-Time Median Weekly Income:
Persons per household: 25.9% Working Part-time $624 - Personal
6.1% Away From Work $1,439 - Family
2.6
$1,192 Household

34
 4.4 Business
PREMISES
The business operates out of
spacious and modern premises at ■ Showroom (Upstairs)
4847 Sandy Glen Way, Wimauma, ■ Warehouse
Florida - zoned by the local council ■ 5 x Off ices
as Industrial 1.
■ 1 x Boardroom
■ 1 Kitchenette
The total land area is 1,094 sq ft
■ 1 x Staff Room
approximately and the total building
area is 879 sq ft approximately divided ■ 3 x Loading Bays
as follows:
■ 20 x Car Spaces
■ 2 x Male Toilets
■ 2 x Female Toilets
■ 1 x Reception

35
 4.5 Lease
AGREEMENT

PARTIES
The Lease Agreement commenced
on 1 November 2016 between LG
Nominees LLC(Landlord) and
BlackHorse LLC (Tenant).

TERMS
The present Lease Agreement
commenced on 1 August 2011 for an
initial term of Five (5) Years with Two
(2) Renewal option of Five (5) Year
each. The Lease was renewed on 15
March 2016 with One (1) additional
renewal option to be exercised by 15
March 2021.

RENTAL
The Rent, after the renewal in 2016
was fixed at the following rates:
Year 1: $152,800 P.A.
Year 2: $154,912 P.A.
Year 3: $157,108.48 P.A.
Year 4: $159,392.82 P.A.
Year 5: $161,768.53 P.A.

MISCELLANEOUS
The landlord has stated there are
no alteration/demolition works, or
other matters planned or known to
the landlord during the renewal of
lease that would affect the Tenant’s
business.

36
 5.1 List of
ASSETS

B
lackHorse Cleaning &
Janitorial Supplies will be
sold with all equipment,
f ittings and f ixtures used in the
business – except for any private
property of the Sellers that may
be registered under the business
as follows:

• BMW Black Sportivo ABC-123

• Owner’s iPhone 8X
• Owner’s Laptop Computer

On the closing of escrow, all equipment

will be transferred to the Buyer f ree of
any debt and in good working order and
condition (subject to fair wear and tear).

A list of equipment can be found in the

next page containing all major items
included.

The estimated total value of the

equipment is $188,300 – and this value
is inclusive in the Asking Price of the
Business.

37
 5.2 FF&E
SCHEDULE

ITEM NOTES ESTIMATED VALUE

Isuzu Truck 2009 137,000 kms $78,000

Hyundai 2 Tonne Van 2012 67,000 kms $35,000

Holden Barina 2007 155,000 kms $5,000

Nissan Pulsar 2012 78,000 kms $12,000

Forklift Gas -- $10,000

Director Computer System -- $2,000

Warehouse Manager Computer System -- $2,000

Sales Manager Computer System -- $2,000

Sales Representative Laptop Surface Pro $1,500

Accounts Dept Computer System -- $2,000

Xero Accounting Software -- N/a

Off ice Furniture -- $1,000

Banner, Signage and Others for Trade Fairs -- $2,000

Shelves & Baskets at Showroom -- $8,000

Pallet Racks -- $20,000

Reception -- $500

POS System -- $500

Outside Signage -- $1,500

Television -- $300

FujiXerox Printer -- $5,000

38
 5.3 Intellectual
PROPERTY

BlackHorse Cleaning &

Janitorial Supplies will be
sold with all intellectual
property associated with
the business.

T
his includes the business name, websites and any associated domains it has secured.

These will be transferred to the Buyer on the day of Settlement.

Moreover, as part of this deal, the Sellers will provide a total of 4 weeks of training, at no cost,
during which they must introduce the Buyers to customers, suppliers, employees of the
Business and provide details of all contracts utilized by the business and provide all intellectual
property relating to the conduct, methodology and trade secrets of the business.

39
 5.4 Licenses &
PERMITS

The Sellers have informed us that the Buyer

does not need any special qualif ication, permit
or license to operate the business, except for
the following which would be benef icial but,
according to the Seller, not essential at this time:

• Forklift Driving License

O
• Heavy Vehicle Driving License
ne of the many
positive features Having said that, it is imperative
of this business is that the Buyer conducts his/her own
that it does not necessarily investigation in this regard, with the
require the Buyer to have assistance of a qualif ied professional.
previous experience in the
The Buyer does not need to have any
industry as the learning
specif ic skill other than that related to
curve is relatively short. the following areas – which would be
benef icial but not essential:

• Management
• Customer Service
• Sales & Marketing

The Buyer does not need any specif ic

qualif ication, but should undertake a
course on:

• Workplace Health & Safety

The Buyer does not need to have

experience in the cleaning supplier
industry as the Seller will provide full
training on the job.

40
BlackHorse
Cleaning &
Janitorial
Supplies occupies
a commanding
industry position
and is well-placed
for further growth
and development.
 6.1 Financial
SUMMARY
The Financial Performance of a
business is one of the strongest
factors that drive decision-making.

W
hile BlackHorse Cleaning &
Janitorial Supplies’ f inancial
performance is excellent, as
the reader will see in the next few pages,
we kindly remind the reader that this
should not be the only factor at play.

Having said that, we have compiled the

information f rom the business’ Prof it
& Loss Statements for the last three
f inancial years.

A copy of the full Financial Statements,

including Balance Sheets and
Depreciation Schedules are enclosed
to this prof ile and available in the Data
Room.

In addition, as part of the Due Diligence

process - should the reader choose to
proceed - the reader will be provided
with copies of the business’Quarterly
Statements, Company Tax Returns, IRS
Portals, Receipts/Invoices, Management
Accounts f rom its Xero Accounting
Software and any other information that
the reader and/or his f inancial advisers
deem relevant.

42
 6.1 Financial
SUMMARY

REVENUE COST OF GOODS SOLD

(F.Y. 2022) (F.Y. 2022)

$6,555,732 $4,817,890
GROSS PROFIT GROSS MARGIN
(F.Y. 2022) (F.Y. 2022)

$1,737,752 26.51%
EXPENSES NET PROFIT (EBIT)
(F.Y. 2022) (F.Y. 2022)

$1,096,421 $641,331
S.D.E. S.D.E. MARGIN
(F.Y. 2022) (F.Y. 2022)

$833,425 12.71%
ASKING PRICE R.O.I. RATE
plus ~$2.5M Inventory At Value (F.Y. 2022)

$1,950,000 42.73%

43
 6.2 Trading
STATEMENT

F.Y. 2022 F.Y. 2021 F.Y. 2020

INCOME

Total Sales $6,555,732 $6,031,273 $5,688,991

TOTAL INCOME $6,555,732 $6,031,273 $5,688,991

COST OF GOODS SOLD

Opening Inventory $2,366,402 $2,210,122 $2,065,556

Purchases $4,901,700 $4,454,663 $4,180,551

Closing Inventory $2,450,122 $2,366,402 $2,210,122

TOTAL COST OF GOODS SOLD $4,817,980 $4,298,383 $4,035,985

GROSS PROFIT $1,737,752 $1,732,890 $1,653,006

GROSS MARGIN 26.51% 28.73% 29.06%

44
 6.3 Profit & Loss
STATEMENT

F.Y. 2022 F.Y. 2021 F.Y. 2020

OPERATING EXPENSES

SALARIES & WAGES EXPENSES

Directors Wages $80,000 $80,000 $80,000
Salaries - Permanent Staff $451,000 $451,000 $462,000
Salaries - Casual Staff $8,008 $15,977 $6,977
Freight Charges $49,855 $69,855 $22,855
Benefits - Staff $42,845 $42,845 $43,890
Benefits - Director $7,600 $7,600 $7,600
Long Service Leave - Admin $7,600 $12,775 $0
Car Allowance $12,000 $8,000 $8,000
Work cover $7,744 $7,744 $7,744
TOTAL WAGES EXPENSES $666,652 $695,796 $639,066

RENT & UTILITIES EXPENSES

Rent $154,912 $152,800 $152,800
Rates & Taxes $23,550 $22,726 $21,930
Electricity $12,096 $11,673 $17,665
Water $6,775 $7,665 $7,397
Gas $451 $435 $556
Cleaning $1,988 $2,899 $2,798
Contents Insurance $4,500 $4,343 $6,770
Rubbish Removal $2,000 $3,500 $3,378
Security $1,400 $1,870 $1,805
TOTAL RENT & UTILITIES EXPENSES $207,672 $207,910 $215,098

45
 6.3 Profit & Loss
STATEMENT

F.Y. 2022 F.Y. 2021 F.Y. 2020

ADMINISTRATIVE EXPENSES
Registration Fees $350 $350 $350
Computer Expenses $899 $1,744 $2,000
E-mail & Internet $2,330 $1,000 $309
Accountancy $7,500 $8,000 $8,000
Legal Fees $7,500 $0 $0
Printing & Stationery $12,771 $22,177 $10,996
Depreciation $48,907 $77,542 $66,144
Interest Paid $38,887 $28,886 $22,764
Other Insurance $10,775 $10,775 $10,775
TOTAL ADMINISTRATIVE EXPENSES $129,919 $150,474 $121,338

OPERATIONAL EXPENSES
Packaging Supplies $1,887 $1,821 $1,757
Petrol $15,002 $14,477 $17,554
Motor Vehicle Insurances $14,667 $14,154 $16,778
Motor Vehicle Repairs & Reg $10,888 $10,507 $10,139
Telephone Expenses $19,726 $17,088 $27,886
Uniforms $288 $288 $576
Advertising $12,334 $11,902 $17,665
Sponsorship $4,500 $4,500 $4,500
Travel & Conference $12,886 $12,435 $12,000
TOTAL OPERATIONAL EXPENSES $92,178 $87,172 $108,855

TOTAL EXPENSES $1,096,421 $1,141,352 $1,084,357

NET PROFIT (E.B.I.T.)

$641,331 $591,538 $568,649
EARNINGS BEFORE INCOME TAX

NET MARGIN 9.78% 9.81% 10.00%

46
 6.4 Adjustments
EXPLAINED

1
This part of the Conf idential Information
ABSTRACT ACCOUNTING
Memorandum may require some
clarif ication as a number of readers are not
EXPENSES
familiar with the concept of Adjustments – This generally refers to Depreciation
also referred to as “Normalisations” or more and Amortisation - expenses
popularly, as “Add-Backs”. that show up on the Prof it & Loss
Statement but never really occurred.
In a nutshell, an “add-back” is an expense For example, the P&L might show an
f rom the Prof it & Loss Statement that expense of $10,000 in Depreciation,
is added back into the Net Prof it of the and while completely valid f rom an
business to present the Buyer a more accounting perspective, at no point
accurate picture of what the business is the business owner wrote a cheque
truly generating to a single working owner. for $10,000 to anyone.

The “Net Prof it” f igure is relevant for

Accounting and Taxation purposes - this is
2 INTEREST EXPENSES
If a business owner takes out a loan,
the f igure the IRS (Internal Revenue Service)
or incurs interest over late payments,
is interested in. However, it does not present
those expenses are reverted back into
a full picture of the business for a Potential
the Net Prof it. The rationale behind is
Buyer.
that this was his/her decision - if he/
she does not have capital invested
What Business Brokers aim to do, is to
into the business to avoid these
present the Buyer with an accurate picture
charges, that is his/her prerogative,
of what the business is truly producing
not the business’.
while how that is being distributed is a
separate matter.

For this purpose, a number of expenses are

reverted back into the Net Prof it, leading 3 SELLER’S PERSONAL
EXPENSES
to the f inal f igure of PEBITDA (Proprietor’s
Business Owners f requently throw
Earnings Before Interest, Tax, Depreciation
into the business personal expenses
and Amortisation) which is what is truly
of theirs (or their family members)
relevant to the Buyer and what he/she
- be it purchases, phone charges,
must take into account when assessing the
motor vehicle expenses, subscriptions,
business.
donations, personal accounting
charges, etc. The rationale behind
This f igure of PEBITDA is more commonly
reverting these back into the Net
referred to as “Adjusted Net Prof it”. The
Prof it is that the business does not
main types of add-backs are laid out below
need them in order to exist/operate.
and on the next page

47
6.4 Adjustments
EXPLAINED

4 REMUNERATION TO SELLER
Another expense that is added back
into the Net Prof it are payments that
the owner makes to himself (or his/
her spouse) in the form of Wages,
Director’s Fees or Superannuation.
The rationale behind is that the
business is producing this money, he/
she is simply distributing it to him/
herself in the form of remuneration,
rather than the dividends.

5 EXCESSIVE/UNNECESSARY
EXPENSES
Occasionally Business Owners
have both unnecessary expenses
or excessive expenses - that is his/
her prerogative, not the business’.
The rationale behind it is that a new
owner does not need to continue
paying more than necessary for a
certain item in order for the business
to maintain its operations at the
current pace.

6 INCOME REVERSAL
This is, in many ways, the opposite of
an add-back. This refers to income
that is removed f rom the prof it in
order to provide a clearer picture. This
usually refers to interest received,
insurance recoveries, prof it on sale of
assets, etc.

48
 6.5 Add-back
ADJUSTMENTS

F.Y. 2022 F.Y. 2021 F.Y. 2020

NET INCOME (E.B.I.T.)

$641,331 $591,538 $568,649
EARNINGS BEFORE INCOME TAX

NET MARGIN 9.78% 9.81% 10.00%

Depreciation $48,907 $77,542 $66,144

Interest Paid $38,887 $28,886 $22,764
Legal Fees $7,500 $0 $0
Remuneration to Owner $80,000 $80,000 $80,000
Benefits to Owner $7,600 $7,600 $7,600
Motor Vehicle Expenses (Owner) $5,200 $5,200 $5,200
Telephone Expenses (Owner) $4,000 $4,000 $4,000

TOTAL ADJUSTMENTS $192,094 $203,228 $185,708

SDE (SELLER’S DISCRETIONARY

EARNINGS) / ADJUSTED NET $833,425 $794,766 $754,357
PROFIT

SDE MARGIN 12.71% 13.18% 13.26%

TOTAL INCOME - 3 YEAR PERIOD $18,275,996

AVERAGE INCOME - 3 YEAR PERIOD $6,091,998
TOTAL PEBITDA - 3 YEAR PERIOD $2,382,548
AVERAGE PEBITDA - 3 YEAR PERIOD $794,182

ASKING PRICE: $1,950,000 plus Inventory

Inventory Value: $2,500,000 (estimated)
FF&E (Furniture, Fixtures & Equipment)
Value
$188,300 (estimated)

49
 6.6 Financial
ANALYSIS
CONCLUSION 1:

S
ales for the business have been the increase was 19.37%.
growing at a steady rate for the last
three f inancial years. The Seller has stated the reasons are two-
fold: (i) an increase in costs that have not
They grew 6.01% f rom 2019 - 2020 to 2020 been met by an increase in pricing and (ii)
- 2021 and a further 8.69% f rom 2020-21 to the Seller has purchased Inventory that is
2021-2022. Overall, the increase was 15.23%. not
turning over fast enough.
The Seller has explained this increase due to
the new focus in trying to win over end-user In turn, the Gross Prof itability increased at
clients through Tenders, as well as organic an overall rate of 5.1% and the Gross Margin
growth over the last three years. dropped as a % f rom 29.06 to 26.51% -
though Net Prof itability increased as will be
The Cost of Goods Sold also appears to have demonstrated ahead.
increased over the same period: It grew 6.5%
f rom 2019 - 2020 to 2020 - 2021 and a further
12% f rom 2020 - 2021 to 2021-2022. Overall,

TRADING STATEMENT TRENDS (IN US$ MILLIONS)

F.Y. 2019-2020 F.Y. 2020-2021 F.Y. 2021-2022

Income COGS Gross Profit

50
 6.6 Financial
ANALYSIS
CONCLUSION 2:

W
hile sales have grown services.
exponentially over the same Administrative Costs have increased by
period, BlackHorse has managed 7% over this period - with a sharp increase
to maintain its overheads essentially at the between 2019 - 2020 and 2020 - 2021 of 24%
same level - with very minimal fluctuations. followed by a drop of around 8% the year
after.
When analysing the four expenditure
categories separately, we see that: The Seller attributes these fluctuations
particularly to a large expenditure in printing
Wage Expenses increased 8.8% f rom 2019 (purchases for off ice) mostly.
- 2020 to 2020 - 2021 and then decreased
approximately 4% f rom 2020 - 2021 to 2021- Finally - Operational Expenses dropped over
2022. Overall, the increase was only 4%. this period by 18%. This is attributed to the
owner sourcing better packages for phones,
The Seller has explained that as the as well as for Motor Vehicle expenses.
processes have become more eff icient, there
has been less need for overtime When analysing the whole - expenses have
payments. indeed remained quite steady:

Rent and Utilities have decreased overall 2019 - 2020: $1,084,357

during the three year period - the Seller 2020 - 2021: $1,141,352
attributes this to being able to source better 2021 - 2022: $1,096,421
deals for its utility usage and for contracted

EXPENDITURE TRENDS (IN US$ MILLIONS)

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
F.Y. 2019 - 2020 F.Y. 2020 - 2021 F.Y. 2021 - 2022

Wage Expenses Rent & Utilities Administrative Costs Operational Costs

51
 6.6 Financial
ANALYSIS
CONCLUSION 3:

T
he Final Conclusion we may draw is of $794,183. This is what is termed “Future
that the business is clearly displaying Maintainable Earnings”.
an upward trend in its prof itability.
When considering an Asking Price of
The PEBITDA, or Adjusted Net Prof it, $1,950,000 - we arrive at an R.O.I. (Return on
increased by around 10% over this period. Owner’s Investment of 40.73% by using the
Future Maintainable Earnings
This corroborates what this prof ile aimed to
apprise the reader: And when using the most recent Adjusted
Net Prof it Figure - $833,425, we arrive at an
The combination of excellent supplier R.O.I. Rate of 42.74%.
relationships, the diversif ications of its client
base and the strict control of overheads In either scenario, this is an excellent rate
have translated into higher prof its for the given the magnitude of the business and
business. its turnover which is slowly approaching the
seven million dollar mark.
When adding the prof its of these three
years and dividing - we arrive at a f igure

ADJUSTED NET PROFIT (SDE) IN US$ MILLIONS

0.84

0.82

0.8

0.78

0.76

0.74

0.72

0.7
SDE

F.Y. 2019 - 2020 F.Y. 2020 - 2021 F.Y. 2021-2022

52
 7.1 Competitive
ANALYSIS

B
rief research undertaken has Moreover, GODFREY’S CLEANING
identif ied a total of 88 Cleaning SUPPLIES is another prominent industry
Supply Distributors in the player - although their focus is known to
TampaMetropolitan areas. be more towards individual consumers,
with a strong emphasis on the sale of
According to the Seller, the largest ones domestic vacuum cleaners.
are as follows:
In addition to these, there are a large
number of businesses who do not
CENTRAL CLEANING SUPPLIES specialise in cleaning supplies but
Located in Wesley Chapel that offer cleaning products, as well as
Consumable Products, as peripheral
MELBOURNE CLEANING SUPPLIES products.
Located in Hudson
These are:
HANNAFORDS TRADE SUPPLY
Located in Port Richey ■ Off ice Supplies
■ Catering & Disposable Supplies
APEX CLEANING SUPPLIES ■ Food Supplies
Located in Tarpon Springs
Furthermore, supermarkets, hardware
VICTORIAN CLEANING SUPPLIES stores and general retailers also carry
Located in Lutz cleaning supplies, but at a very high
mark-up.

ANALYSIS:

BlackHorse clearly operates within a

highly competitive mature market,
with an over-saturation of players.

This forces the business to consider

its pricing position as well as having
to develop key competencies that
allow it to stand out f rom others.

53
 7.2 Industry
REPORT
In order to assist the reader with further background information, the following
report has been purchased by the The Business Brokerage Agency f rom
IBISWorld.

What follows is the executive summary and key statistics. The full report is
enclosed to this Conf idential Information Memorandum in the Data Room.

Report: OD4126 (“Janitorial Equipment Supply Wholesaling in the USA”), July

2021

O
perators in the Janitorial Equipment Supply Wholesaling industry sell specialized
equipment and supplies used by service establishments, such as floor cleaning
equipment and vacuuming systems. The industry also sells beauty parlor and
barbershop products, in addition to laundry products and equipment. Prior to 2020, the
industry benef ited f rom overall economic growth. However, the industry was adversely
affected by the COVID-19 (coronavirus) pandemic in 2020. Despite this, an economic
recovery in 2021, combined with growth before 2020, have led industry revenue to grow over
the f ive years to 2021. As a result, IBISWorld estimates that industry revenue has increased
an annualized 2.5% to $26.1 billion during the current period, including an increase of 3.5% in
2021 alone.

Over the past f ive years, businesses in the janitorial, laundry and beauty services industries
invested in capital equipment and bought large volumes of supplies f rom industry
operators. However, the coronavirus pandemic led to a contraction in industry revenue in
2020 due to the effects of lower consumer spending and social distancing measures on
downstream industries. Nonetheless, this effect was partially offset by increased residential
construction activity, demand for enhanced janitorial services; moreover, demand declines
in other verticals were mostly mild or nonlethal. Moreover, an economic recovery in 2021 is
expected to drive growth for the industry as consumer spending increases and downstream
businesses resume spending that either directly or indirectly benef its industry operators.
Janitorial Equipment Supply Wholesaling in the US June 2021
IBISWorld expects industry revenue to rise moving forward, increasing an annualized 1.4%
Industry
to $28.0 billion over the f ive years Performance
to 2026. Demand f rom downstream businesses that
use industry products in
their operations is expected
to recover in line with
the general economy as
employment and consumer
spending recover f rom
the coronavirus pandemic.
Consumers are expected to
spend more on downstream
businesses that either buy
industry products directly
or contract businesses that
do. Moreover, an increase
in construction activity is
anticipated to spur demand
for several industry product segments,
Key External such asofjanitorial
Value equipment and f ire alarms and
residential construction
sprinklers. However, increasing external competition
Drivers f rom online B2B marketplaces may
The value of residential construction measures spending by the private sector on residential construction, such as
pose a threat to the industry during the outlook period,
single- and multifamily constraining
structures and homes. As the valuerevenue growth
of residential construction todemand
increases, a from
multiple industry product segments increases, such as demand for janitorial equipment and fire sprinkler devices
certain extent. and alarm equipment. The value of residential construction is expected to increase in 2021, representing a potential

54
opportunity for the industry.

Number of businesses
Janitorial Equipment Supply Wholesaling in the US June 2021

Industry at a Glance
Key Statistics Key External Drivers % = 2016–21 Annual Growth

$26.1bn 8.1% 3.0%

Revenue World price of crude oil Per capita disposable income

Annual Growth Annual Growth Annual Growth

0.5% 4.1%
Number of businesses Value of residential construction
2016–2021 2021–2026 2016–2026
-2.7%
2.5% 1.4% Private investment in industrial
equipment and machinery

$1.1bn Industry Structure

Profit

Annual Growth Annual Growth POSITIVE IMPACT

2016–2021 2016–2021 Capital Intensity Concentration
2.5% Low Low
Regulation & Policy Technology Change
Light / Increasing Low
Industry Globalization
4.2% Low / Steady
Profit Margin
MIXED IMPACT
Life Cycle Revenue Volatility
Mature Medium
Barriers to Entry Competition
Medium / Increasing Medium / Steady
4,592 NEGATIVE IMPACT
Businesses
Industry Assistance
Annual Growth Annual Growth Annual Growth
Low / Increasing
2016–2021 2021–2026 2016–2026

1.0% 0.9%
Key Trends

 Increased e-commerce orders have helped to counteract the

58,959 decline in demand for many operators
Employment
 A rise in the number of deaths due to the pandemic is
Annual Growth Annual Growth Annual Growth
expected to bolster industry demand
2016–2021 2021–2026 2016–2026
 A greater number of manufacturers are enabling customers
3.0% 1.5% to place orders directly through suppliers' websites

 As employment and consumer spending resume, new

businesses will likely form

$3.2bn  Growth in consumer spending and disposable income is

Wages expected to bolster industry demand

Annual Growth Annual Growth Annual Growth  Operators are expected to experience rising competition
from manufacturers and e-commerce sales
2016–2021 2021–2026 2016–2026
 Industry profit is expected to decline in 2020 as a result of a
2.1% 1.5%
deteriorating economic landscape

55
7 IBISWorld.com
Janitorial Equipment Supply Wholesaling in the US June 202

Products & Services Segmentation

Major Players SWOT

There are no major players in this industry

STRENGTHS

Low & Increasing Level of Assistance

Low Imports
High Profit vs. Sector Average
Low Customer Class Concentration
Low Product/Service Concentration
Low Capital Requirements

WEAKNESSES

Low Revenue per Employee

OPPORTUNITIES

High Revenue Growth (2016-2021)

High Revenue Growth (2021-2026)
High Performance Drivers
World price of crude oil

THREATS

Low Revenue Growth (2005-2021)

Low Outlier Growth
Per capita disposable income

56
 8.1 SWOT Analysis
EXPLAINED

The Final Conclusion

we may draw is that
the business is clearly
displaying an upward
trend in its prof itability.

The PEBITDA, or Adjusted Net Prof it,

increased by around 10% over this period.

This corroborates what this prof ile aimed

to apprise the reader:

The combination of excellent supplier

relationships, the diversif ications of
its client base and the strict control of
overheads have translated into higher
prof its for the business.

When adding the prof its of these three

years and dividing - we arrive at a f igure
of $794,183. This is what is termed “Future
Maintainable Earnings”.

When considering an Asking Price of

$1,950,000 - we arrive at an R.O.I. (Return
on Owner’s Investment of 40.73% by using
the Future Maintainable Earnings

And when using the most recent Adjusted

Net Prof it Figure - $833,425, we arrive at
an R.O.I. Rate of 42.74%.

In either scenario, this is an excellent rate

given the magnitude of the business and
its turnover which is slowly approaching
the seven million dollar mark.

57
 8.1 SWOT Analysis
EXPLAINED

S W
TRENGTHS are analyzed in EAKNESSES are
the context of a Business Buying analyzed in the context of
SWOT Analysis to assist the Buyer a Business Buying SWOT
in identifying areas where the business is Analysis to assist the Buyer in identifying
performing well and give it its competitive disadvantageous characteristics of the
advantage. Identifying these strengths is business. The first step to minimizing or
necessary so the Buyer knows what can be eliminating weaknesses is being aware
maintained so this advantage is not lost. of their existence. Every business has its
Growing the business further will involve weaknesses so you needn’t be taken aback
finding ways of using and building on these by the fact that they exist – the question
strengths is whether you as a new owner will have
what it takes to turn them around from
weaknesses into Opportunities

O T
PPORTUNITIES are analyzed in
the context of a Business Buying HREATS are analyzed in the
SWOT Analysis to assist the Buyer context of a Business Buying

in identifying opportunities that the business SWOT Analysis to assist the Buyer

could take advantage of in order to make in identifying external factors that could

greater profits. Opportunities are created adversely affect the business. Such as

by external factors such as market trends. regulatory changes, market trends or actions

But by taking into consideration Strengths by competitors. By identifying a threat, the

and Weaknesses (Internal Factors) one new owner will be able to plan accordingly

understands the business’ ability to seize an to counteract it, depending on the business’

opportunity at the appropriate time. strengths and weaknesses.

58
 8.2 Business
STRENGTHS

MARKET PRESENCE AND CLIENT-BASE SPREAD

1 BRAND AWARENESS 2 AND RELATIONSHIPS

Given its longevity and its work with major BlackHorse has diversified its client base
customers, BlackHorse has developed a very and ensured that no single customer holds
positive image in the market and cultivated too high a percentage of sales. They have
a reputation for quality of service/advice and also cultivated excellent relationships with
reliability. decision-makers in client organizations.

STRATEGIC SOLID INTERNAL

3 LOCATION 4 STRUCTURE

The business position in Hudson is The business has built a solid internal
advantageous given the relative lack of local structure, not solely relying on any single
competition and the closeness of Hudson to staff member who could not be substituted
major throughways leading to all suburbs. if need be. Moreover, staff are skilled,
competent and loyal.

SYSTEMS AND INVENTORY

5 PROCEDURES 6 LEVELS

BlackHorse has developed and perfected a In an industry notorious for “back- orders”,
series of systems and procedures to ensure BlackHorse has gained a reputation for
service quality standards are met and mistake carrying inventory levels that meet regular
seldom occur. clients’ demands.

PRODUCT AND ESSENTIAL AND

7 SUPPLIER CHAIN 8 FAST-MOVING GOODS

BlackHorse endeavors to only carry products The product range the business sell is
whose labels assure its quality and market deemed essential and recession-proof. In
satisfaction. Relationships with Suppliers are addition the market for these products is
excellent given BlackHorse record of prompt essentially universal given there is no single
payments. entity that would not need cleaning products.

59
 8.3 Business
WEAKNESSES

ONLINE AND SOCIAL MOQ (MINIMUM

1 MEDIA PRESENCE 2 ORDER QUANTITIES)

BlackHorse acknowledges having somewhat Goods are sold, in their vast majority by
lagged behind with its online presence - with pallet load or carton load -while the business
a website that has not been updated in a sells goods per unit, allowing for remaining
year and nonexistent Social Media presence. Inventory to become obsolete over time or
simply slow- moving.

COMPETITION WORKING
3 LEVELS 4 CAPITAL

BlackHorse operates within an overly While BlackHorse has endeavored to balance

saturated industry, with extremely high supplier and client trading terms, this has not
levels of competition and a handful of always been the case as some clients pay 30-45
major players with whom BlackHorse must Days EOM while some suppliers only offer 30
constantly compete. Days from Invoice Trading Terms.

CAPITAL CONVERSION RECRUITING AND

5 TO INVENTORY 6 TRAINING NEW STAFF

Inventory levels must remain high, as Recruiting reliable staff is always challenging
such much capital profit is converted into but training them to understand the vast
inventory. As the business grows, so must product range is time-consuming.
inventory levels.

RIGIDITY OF RULES BUDGET

7 AND PROCESSES 8 RANGE
As it grew, BlackHorse stopped allowing for BlackHorse does not presently offer a budget
urgent deliveries or weekend openings to range of products - which can be complicated
satisfy last-minute demands. This rigidity given that a number of customers are
causes some dissatisfaction among area unsophisticated towards understanding the
managers in Cleaning Companies. benefits of expensive/durable products vs
cheap ones which may break or be ineffective.

60
 8.4 Business
OPPORTUNITIES

DIVERSIFICATION: ONLINE
1 DISPOSABLE SUPPLIES 2 PRESENCE

While BlackHorse has a small range of The business can expand on its web
disposable supplies for the hospitality presence by undertaking in Search Engine
industries, the reality is that it does not cover Optimization as well as paid advertising
even 5% of what is available and many of through GoogleAds.
its customers do require these goods and
presently buy elsewhere.

EXPANSION INTO NEW BUDGET

3 MARKETS & SEGMENTS 4 RANGE

Just as it successfully moved onto the BlackHorse may develop a range of products
Hospitality sector - BlackHorse may wish to in a lower price bracket to satisfy the lower
begin marketing to new segments such as end of the market - which it presently rejects
Laundries, Car Washes or Mechanics with altogether
specialty products.

DIVERSIFICATION: SOCIAL MEDIA

5 SAFETY SUPPLIES 6 MARKETING

BlackHorse only sells safety supplies relevant The business can develop a comprehensive
to cleaning such as A-Frames or Gloves - but Social Media strategy to target the existing
there is huge synergy between both product markets, or new ones, via LinkedIn,
ranges and an expansion could see increased Facebook, Twitter, Instagram, YouTube or
sales. Others.

FRANCHISING VERTICAL
7 MODEL 8 INTEGRATION

The business can consider a Franchising set- As it builds sufficient turnover, BlackHorse
up whereby it undertakes expansion by selling may begin to consider sourcing its own
operational know-how, while allowing for supply products directly from manufacturers
channels not easily accessible overseas and buying container loads in order
to reduce costs

61
 8.5 Business
THREATS

CURRENCY ONLINE
1 FLUCTUATIONS 2 REVIEWS
Most goods are imported from overseas As is the trend nowadays, this business is
markets, as such currency fluctuations can also susceptible to negative online reviews -
have a strong impact on gross profit margins. particularly through Google Reviews which
may discourage new purchases.

GOVERNMENT PAYMENT
3 LEGISLATION 4 DEFAULTS

While it operated within a relatively Most clients work with credit - accumulating
deregulated space, as with many industries debts over a 30-60 day period. Commercial
in Texas, the risk of Government legislation Cleaners are generally asset-poor and
and punitive measures is always looming. money cannot be recovered through
insolvency.

COMPETITOR GREEN MARKET

5 MARKET 6 TRENDS

While there is a barrier of entry in terms of While the ‘green wave’ has already occurred,
the high capital investment required, there a number of products such as Bleach or
are few other ones - allowing for disruptions Virgin-Pulp toilet paper remain tainted with
by new entrants. a negative environmental rating.

LOSS OF SUPPLIER
7 TOP 3 CLIENTS 8 CONTRACTS

While the relationship with major clients is While relationships with suppliers are
excellent, the top three customers together also deemed to be excellent, there are no
account for 22.1% of total sales. A loss of contracts in place nor exclusivity. Should a
all three, while highly unlikely, would be supplier stop trading with BlackHorse or cut
adversely felt. its credit, the effects would be felt.

62
 9.1 Concluding
MESSAGE

We live in a global economy that has been

driven by monumental changes - the
emergence of Cryptocurrency and the prolif ic
influence of Social Media have shaken the very
foundations of how business is conducted.
Moreover, events such as the Global Financial
Crisis, Brexit and the looming tariff wars
between the United States and China present
major challenges.

In this context, investors can be reassured of putting

their money into a stable industry that distributes
basic and essential recession-proof Fast-Moving
Consumer Goods to the most diverse markets.

While the industry has moved with the times, the

need for basic cleaning and janitorial goods, as well as
Paper Consumable Products remains high and steady
- driven by organic growth as Hillsborough County is
poised to overtake others and become Florida’s most
populous city as well driven by the business’ product
and service leadership - achieved through innovation
and continuous improvement.

The acquisition of BlackHorse Cleaning and Janitorial

Products presents a remarkable opportunity for any
savvy investor to acquire a well-established business
that has, over eighteen years, forged long-standing
relationships with customers and suppliers alike and
has cemented its market presence and its position as
a leader in its f ield.

It is our sincere hope that this Conf idential

Information Memorandum has been able to present
the reader with an image of BlackHorse Cleaning
and Janitorial Supplies as a business of outstanding
reputation, proven track-record and successful
operational model.

63
 9.2 Frequently
Asked
QUESTIONS

HOW DOES THE BUSINESS ACQUIRE ITS

COMMERCIAL CLIENTS ACROSS A
BROAD RANGE OF INDUSTRIES?

Prior to establishing BlackHorse Cleaning & Janitorial Supplies, the current owner has
cultivated a solid network of owners and executives within the Fast-Moving Consumer
Goods (FMGG), Pharmacy, and Supermarket industries, which he leveraged to attract the
business’s first few clients. However, as the business gradually cemented its position in the
market, clients started coming in organically through word-of-mouth, without any client
acquisition effort or costs.

HOW HAS THE COVID-19

PANDEMIC AFFECTED THE
BUSINESS’S OPERATIONS?

BlackHorse Cleaning & Janitorial Supplies thrived amid the pandemic due to increased
demand for cleaning and janitorial services. As contractors received more jobs, so was their
need for suppliers – and the business was ready to fill this gap. Moreover, as its product
range is categorized as essential Fast-Moving Consumer Goods (FMCG) for the Hygiene
and Food & Beverage Industries, the business was protected from major economic
fluctuations during this period.

WHAT IS THE IMPACT OF

CHANGES IN INPUT COSTS ON THE
BUSINESS’S PROFIT MARGINS IN
THE PAST THREE YEARS?

Over its twenty-one-year history, BlackHorse Cleaning & Janitorial Supplies has nurtured
strong relationships with its suppliers whose products are regarded as being the very
best in the industry. The business’s strong ties with these suppliers enable it to purchase
inventory at lower bulk prices, softening the impact of inflation or price factors.

64
 9.3 Data
ROOM

For the reader’s convenience we have stored all of the supporting documentation
provided to our f irm by the Seller of BlackHorse Cleaning & Janitorial Supplies
in a cloud storage which we have hyperlinked to this Conf idential Information
Memorandum.

Just CLICK on any of the boxes below, and the document will open through your web browser:

FY 2022 AUDITED FY 2021 AUDITED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

FY 2020 AUDITED
FINANCIAL STATEMENTS FY 2022 COMPANY TAX
RETURNS

FY 2021 COMPANY TAX FY 2020 COMPANY TAX

RETURNS RETURNS

FY 2023-YTD PROFIT & FY 2023-YTD BALANCE SHEET

LOSS STATEMENT (FROM INTERNAL (FROM INTERNAL
ACCOUNTING SOFTWARE) ACCOUNTING SOFTWARE)

FF&E STAFF
SCHEDULE ROSTERS

IBISWORLD INDUSTRY LICENSES &

REPORT PERMITS

SALES BY CLIENT BREAKDOWN -

COPY OF LATEST FY 2020-2023 (FROM INTERNAL
PRODUCT CATALOG ACCOUNTING SOFTWARE)

PURCHASES BY SUPPLIER PAY SLIPS FOR STAFF MEMBERS

BREAKDOWN - FY 2020-2023 (FROM (WITH NAMES/CONTACT
INTERNAL ACCOUNTING SOFTWARE) DETAILS OMITTED)

65
 9.4 Next
STEPS

Initial Review of Business Negotiations

Business Inspection and Offer
This is the step you have just The next step is to organise a visit Once you are satisf ied with the
undertaken by reading this to the business and an informal information provided and are ready
Conf idential Information meeting with the Seller - during to move forward, you can negotiate
Memorandum, coupled with any which you will have the opportunity a Conditional Offer with the
follow-up questions you may have to understand the business better. Business Broker.
for the Business Broker.

Due Contracts and Settlement and

Diligence Other Matters Possession
Once the Offer is accepted by the You will need to engage a Solicitor Once both parties have signed the
Seller, and a Deposit is paid into a to review the Contract of Sale Contract of Sale, you can move on
Trust Account, you will be able to prepared by the Buyers’ Solicitor to Settlement and take possession
undertake a Due Diligence and to assure you are protected in of the business, enabling you to
investigation to verify the accuracy the transaction. now drive the business in whatever
of all relevant business information. direction you choose.

66
9.5 Get in
TOUCH

Thank you for

reading this
Conf idential
Information
Memorandum

On behalf of the entire team at The

Business Brokerage Agency, I want
to thank you again for giving us the
opportunity to assist you with your next
Business Purchase.

Please get in touch with myself, or any

member of the team, so we may either
help you further on this business enquiry
or so we can assist you in f inding an
alternative investment option.

CONTACT US

SW 2nd Street,
Miami FL 33130

+1 (555) 555-1234 or +1 (555) 555-4321

john@tbba.com

www.tbba.com

67
 BlackHorse
Cleaning &
Janitorial Supplies

This Confidential Information

Memorandum (CIM) was developed
for commercial purposes only as a
sample.

“BlackHorse Cleaning & Janitorial

Supplies” and “The Business Brokerage
Agency” are fictional businesses - any
similarities with any real business/es are
purely coincidental.

The entirety of the contents of this

sample are copyrighted to BBMS Media
(“Marketing for Business Brokers”) Pty
Ltd and may not be duplicated without
permission.