Business for Sale: Florida Taxi Company
BY Inc. staff
An overview of a business offered for sale, including the price rationale and some pros and cons of the purchase.
THE BUSINESS Things haven't changed since those days when you moonlighted as a cabbie. But now why not floor the pedal on profits by running the company instead? This one couldn't have a better location, an upscale Florida city. It offers round-the-clock taxi service, keeping seven cabs busy and five spares in the garage. Besides the cars and ties to nine reliable drivers, the deal includes an industrial site (worth $100,000) featuring a radio tower and an antenna. The owner will retire, but the night dispatcher will stay on. If you're not looking for a new day job, you'll need to staff up.
PRICE $200,000 (owner will finance $100,000)
OUTLOOK The $10-billion taxi-and-livery industry is speeding along, accounting for about 20% of transit across the United States. The meter looks good on this company, too, thanks to a local rate increase that recently pushed rates to a $1.25 "flag" fee and $1.50 per mile. (Drivers keep their tips plus 40% of daily bookings.) Since there isn't much competition, a new owner could rev up by expanding beyond the current territory of 50 square miles or by adding cabs. The biggest jam-up: finding new, reliable drivers. Another red light: those 1989 Dodge Diplomats won't last forever.
PRICE RATIONALE Keep your feet on the brakes with this one. For cab companies, two valuation methods are typically used: Take 45% of annual gross sales, which gives you a price of about $86,000 (using a three-year average of about $191,000). Or take 80% of annual adjusted earnings. That's about $61,000 (based on a three-year average of about $76,000). Add the value of the company's real estate, and you get a ballpark price between $160,000 and $186,000. Get in or slam the door.
PROS Great weather and plenty of customers, so long as all those sunbirds keep flocking to Florida.
CONS If this deal isn't structured right, you may not be able to afford suntan lotion.
*Before depreciation, interest, taxes, and owner compensation
Inc. has no stake in the sale of the business featured.
The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Pat McDonald of Business Specialists at 561-744-9319.