How much money can be made in Sheds and Garages?

Posted on : February 8, 2014

This one is always quite hard to find out, until a Shed company goes on the market.

Shed_company_for_sale

 

That is a lot of sheds and a lot of steel.  If you extrapolate the figures here it also tells you the approximate margin they are making.

Note that P.E.B.I.T.A. = Proprietors Earnings Before Interest, Tax & Amortisation

Take this estimate

  • If you say 100k for rent and other expenses
  • $2 million gross sales
  • Owners earnings of $284,000, assuming this is the PEBITA figure.
  •  ~19% margin (depending on how much Gross sales are over $2 million).

 

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2 Responses to “How much money can be made in Sheds and Garages?”

  1. Chris said...

    You should always be careful on the figures put out by a business when it is up for sale, they are never close to that stated. That said, a distributor, working as a fully licensed builder, turning over 2 to 2.5 million a year needs to make around 20% gross profit on sales turnover otherwise they will go broke very quickly. I also doubt that there is anyone in the current market making any more than that.

  2. Shedeye said...

    Hi Chris,

    Yes, very true. To value the business correctly I guess you really need to know the split between building, concrete and kit. I am guessing it would be quite easy to validate the figures by seeing all orders that have been made back to the wholesaler, and applying an approximate per square meter cost to ensure the figure have not been fudged too much. Cash off the books does not count in valuing a business 🙂

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