The Business An eight-year-old, 5,000-square-foot water-ski shop resting in the shadows of snowcapped peaks and whispering pines. A crew of 16, including 10 part-timers, hawks neon skis and boards (30% of sales), boats (25%), and accessories (20%). Young, moneyed walk-ins -- 80% are frequent buyers -- linger, debating the finer points of barefoot technique. The 20,000 catalog shoppers account for 5% of sales. Popular promotional events such as ski swaps and ski-school sponsorship contribute indirectly to sales -- which are currently waxing at 10% annually.

Financial Summary
($ in thousands) 1990 1991 1992*

Gross revenues $1,330 $1,460 $1,600

Recast earnings before $ 72.8 $60.4 $150

interest, taxes, depreciation, *Projected

and owner compensation

Price $550,000, excluding real estate

Outlook This operation has made a splash along the Continental Divide, penetrating roughly 7% of the $200-million-plus U.S. aqua-sports retail market. Although the season lasts only from May to September, increased direct mail could tow in more of the nation's 13 million waterskiing enthusiasts. A computer system and more sales support could triple your top line in just a few years. And why not? Grandma-tested, kidproof kneeboards and tubes constitute a multigenerational sport poised for explosive growth.

Price Rationale Price includes assets fairly valued at $237,000 (42% cash; 41% inventory, churning in robust 70-day cycles). The balance is goodwill and intangibles such as exclusive, in-state selling rights to top brand-name merchandise. Seller will toss in the building and dry dockage for another $265,000 or lease them for $2,400 monthly. Gross margins, at 30%, are thicker than average. The 5.5 multiple on three-year weighted earnings is on the high end of the typical range of 3 to 6, but this market can support it.

Pros Flexibility. Plenty of room to reshuffle product lines to your liking. Plus, you can spend your entire second quarter doing market research at sunny resorts.

Cons The shop (sigh) won't run itself. And if you lack product smarts, you may need to log the 60-hour workweeks this pro outfit now demands. But don't sweat it, say gear manufacturers; you could get yourself up to speed in three months -- six, tops. -- Karen E. Carney

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 Colorado Business Consultants, 303-832-2020.