Skip to content
All sample deals
Fictional sample dealIntermediate

Lakeside Auto Repair

Automotive repair · Small city, Great Lakes region US

Six-bay general auto repair shop with a loyal customer base and strong online reviews. The price looks reasonable at under 3x SDE, and the broker says there’s already interest from other buyers.

The owner is an ASE-certified master technician who diagnoses the hardest jobs and writes most estimates himself. He wants to close quickly and plans to move out of state about a month after closing.

  • Building lease ends in 14 months with no renewal option; the landlord has talked about redeveloping the lot
  • Owner is the only master technician and writes about 80% of estimates
  • Owner offers a 30-day transition
  • Four technicians, one service writer; two techs have been there over 5 years
  • No fleet or commercial customer above 4% of revenue
The numbers, as presented
From the broker’s package. Nothing here has been verified.
Asking price
$850,000
Revenue
$1,100,000
SDE (stated)
$290,000
Multiple
2.93x SDE
YearRevenueSDE (seller-reported)
Two years ago$1,040,000$270,000
Last year$1,080,000$282,000
Most recent year$1,100,000$290,000

Add-backs in the seller’s SDE

  • Owner salary and payroll taxes$95,000
  • Owner’s personal vehicle$9,000

Assumptions for this exercise

SBA 7(a) loan at 10.5% over 10 years, with 10% of total project cost (price plus working capital and closing costs) as your equity injection. Working capital $30,000, closing costs $35,000. A market salary to run the business is $85,000 a year, and ongoing equipment spending is $20,000 a year.

Your evaluation
Answer all five, then see how an experienced buyer called it.
1. Would you pursue this deal?
2. What price range would you offer?

If you’d pass at the asking price, give the range you’d consider if the seller re-priced. “1.1M” or “950k” work too.

3. What are the top risks? (pick up to 3)
4. What would you ask the broker first? (pick up to 3)
5. Estimate the DSCR

At the asking price, on the seller’s stated SDE, using the assumptions above: cash flow after the market salary and equipment spending, divided by a year of loan payments. The SBA floor is 1.25x.

x

Every sample deal is fictional: the businesses, names, places and numbers are invented for practice, and any resemblance to a real business is coincidental. The simulator is educational, not advice. It isn’t legal, tax, financial, investment or lending advice, and real deals deserve review by a qualified attorney, accountant and lender.

We use analytics cookies to understand how visitors use numanknows. See our Privacy Policy for details.