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Pawsitive Pet Resort

Pet boarding and grooming · Growing suburb, Mountain West US

Modern, well-reviewed pet resort offering boarding, daycare and grooming in a fast-growing suburb. Occupancy runs above 85% in summer and around the holidays, and the daycare membership program has a waitlist.

The owner built the facility out five years ago and prices the business at $1.9M, citing the quality of the buildout, the brand and “the growth potential of the area.”

  • SDE of $310K on $1.25M of revenue
  • The owner spent about $600K on the buildout five years ago
  • Leased building with 12 years left plus two 5-year options
  • 16 part-time employees and a full-time manager
  • No customer concentration: about 1,100 active clients
The numbers, as presented
From the broker’s package. Nothing here has been verified.
Asking price
$1,900,000
Revenue
$1,250,000
SDE (stated)
$310,000
Multiple
6.13x SDE
YearRevenueSDE (seller-reported)
Two years ago$1,120,000$280,000
Last year$1,190,000$295,000
Most recent year$1,250,000$310,000

Add-backs in the seller’s SDE

  • Owner salary and payroll taxes$70,000
  • Depreciation and amortization of the buildout$64,000

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 $40,000, closing costs $60,000. A market salary to run the business is $75,000 a year, and ongoing equipment spending is $25,000 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.

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