This business is a state certified potable and wastewater treatment operator, providing contract operations for water and wastewater treatment and/or distribution systems. In short: for almost 8 years, they have provided routine maintenance, operational service, and project management to ensure their clients’ water systems stay safe and healthy. Their revenue consists largely of operations and maintenance (75%), but also includes consulting and project management (15%), repair (5%), and parts (5%)
This business serves a very stable industry, but one that is geared for large municipal and wastewater service providers, leaving a sizeable market of clients where service is unavailable or the hook-up costs are prohibitively expensive. Their typical clients, primarily rural communities and organizations that cannot connect to municipal water systems, include RV parks and campgrounds, schools, golf courses, mobile home communities, small water districts, tribal casinos and water districts, industrial wastewater, and the occasional private home testing. They serve clients throughout San Diego, Riverside, San Bernardino, Imperial, Santa Barbara and Los Angeles counties.
Business Model
This business provides contract operational services. They operate 30+ sites under active monthly service agreements, plus the occasional private or non-service agreement customer. The current owners add 2-3 clients per year (on average); to determine needs for new clients, they will meet the prospect, check their licensing and regulatory requirements, and perform site inspections to gather the required information. They determine the required operational and maintenance tasks and sign contracts (annual or biannual) to provide those services. All contracts include resubmission clauses should significant changes be made to client’s water and/or wastewater systems, and the contract generally increase 3-5% every two years.
The business owns 3 trucks equipped with the necessary tools and supplies, which employees keep at home; the business can be run from a home office, with no rent expense! The employees are licensed and certified to conduct system audits, evaluations, and troubleshoot, as well as perform routine sample collections and report to state certified laboratories and governing agencies. The owners operate the back office: one partner manages the crew, sells, and consults, while the other handles administrative tasks including payroll and bookkeeping.
Opportunity
The owners relocated to be near family, and it has been more difficult than expected to remotely manage and operate the business. This is an opportunity for a California-based buyer to step in and immediately pickup their team of highly specialized employees, book of clients, and $120,000 of net income. Despite grossing $520k+ in 2020, this business has a great deal of room to grow.
They have built the business-to-date on word of mouth alone: absolutely no (zero-zip-nada) marketing effort. Their digital presence is bare minimum at best. A new owner should immediately revamp their website: it has potential to be a great authoritative resource for clients, but is instead a one-page graphics-free teardown. They should use social media or reminder apps to stay in direct touch with their employees, clients (management, onsite maintenance staff) and prospects. They don’t use email marketing to stay in the front of customers and prospects. Plus, a new owner should get additional education and certification for the already licensed employees, and offer additional services such as backflow testing, mobile temporary wastewater treatment systems, construction and engineering services to increase sales!
The business has many advantages. It has consistent, year-round contract business, with no competition from overseas manufacturing or ecommerce; provide good service, and clients tend to be long term. Since wastewater is a relatively licensed and regulated business with specialized knowledge, barrier to entry is higher, and therefore fewer competitors. It is currently an industry with many smaller players, so there is plenty of room to make a reasonable living, grow, or acquire.
Operations and Maintenance (75% of revenue)
The business provides weekly operations and maintenance for wastewater systems, both routine and “as needed”, for treatment lagoons, activated sludge, extended aeration, membrane treatment, sequential batch reactors, biofilters, trickling filters and sand filters, nitrate removal techniques, secondary treatment and tertiary treatment, and septic systems.
They also provide weekly operations and maintenance for water distribution and water treatment systems , both routine and “as needed”, for multiple well sources, storage tanks, treatment and chemical injection systems, reverse osmosis, well blending, metering, pump sizing and installations, subcontract for well drilling and pump installations.
They work with client’s maintenance or managerial staff, meet with representatives of local and state governing agencies, and provide government agency reporting, (including monthly, quarterly, annual self-monitoring reports), and annual water production reporting to state water division.
Additional Services (25% of revenue)
The businesses consulting / project management (15%) includes consulting on wastewater and water treatment/distribution system upgrades, training client’s maintenance staff on behalf of clients, meeting with local and state governing agencies, and large project management. Repairs (5%) are generally minor and they subcontract the major repairs. Parts (5%) are provided to clients that prefer to source through the company, or larger items unavailable to the general public.
Rarely does a perfectly profitable, successful niche business come to market with a great deal of room for growth. This water treatment business is an established six-figure income business with a book of loyal niche clients. This is an excellent opportunity for someone in the industry looking to expand by acquisition, or for an entrepreneur starting out that wants to enter the water treatment business. If either of these is you, contact the Agent today.
