CPM One Source Inc (CPM) is an established, 30-year Project Management company operating in the B2B arena in Los Angeles looking for the right partner to help scale up our rapid growth in our Project Management, Construction, Warehousing/Storage, Higher Education, and Hospitality divisions.
Originally founded in 1993 with life-long friends and business partners Ted Afetian and Phillip Sapon, the company was fortunate enough to be awarded a contract with UCLA for on-campus moving services. By providing excellent service and developing our reputation for being dependable, we were able to build upon that base as a commercial moving company to grow into what we are now currently, a Project Management company providing various services to commercial businesses, hospitals, government entities, hotels, and higher education institutions. If fact, we still do 2-3 projects every day on campus at UCLA.
We grew slowly and steadily each year by adding services requested by our business clients. The company grew from providing relocation services to adding first, furniture installation, then warehousing and storage, then design and project management, and in recent years, construction. We always considered ourselves very fortunate over the years because clients always called us, even during a recession. Whether a company is expanding or downsizing, they still need our services. In essence, we were "recession proof."
We currently have 6 Divisions: Project Management; Hospitality; Construction; Moving & Installation; Warehousing & Storage; and MoveCart Rentals. (Note: For about 16 years we sold new office furniture as well, as requested by our clients, but we closed that division last year as the margins in that particular field were becoming less each year, eventually hitting the single digits and we decided that division was not profitable.)
Project Management: This is our "lead" service as everything trickles down from Project Management. For example, as commercial movers, we were always the last to be called on a project and we became just a service commodity. But with Project Management, we are involved in the planning and overall strategy of the project and are now the first to be called. That turned us from a commodity service to a value-added service. Clients now depend on us for our knowledge and expertise, as well as the vast network of vendors and subcontractors that we bring to the table for a project. We operate as the "owners rep" providing overall project management including construction project management, relocation project management, and even staff augmentation for larger project management companies. This division provides us with some of the largest margins of revenue.
Hospitality: This is a specialty service we provide the hotel industry working with hotel chains and developers in the installation of the hotel furniture. When a hotel is remodeling or a developer is building a hotel, they use purchasing companies to buy the furniture for the hotel from manufacturers located world-wide. The purchasing firm will then have each manufacturer ship the ordered products to our warehouse where we receive, inspect, and inventory the items. When the construction crew is finished with each floor, we follow them and deliver and install the furniture in the rooms. We even receive the misc items that you find in hotel rooms like artwork, trash bins, tissue boxes, etc., and assemble all of those items in a "kit" for each room and deliver. This is a fast growing segment for us, especially in Los Angeles with the Soccer World Cup coming to LA in 2026 and the Olympics coming to LA in 2028, there are currently not enough hotel rooms to service those two events, so developers have a lot of hotel projects coming online. We currently have over $15,000,000 in quotes for hotel projects and expect to be awarded 10% - 20% off those projects.
Construction: This is our most recent division started in 2019 just before the COVID pandemic hit. Although we held our General Contractors license for years, we never really used it that much except for marketing purposes, hoping to stand above some of the other competitors. But in 2019, we had clients coming to us asking us to do construction and tenant improvement work, telling us that some of the GC companies they used in the past were too busy or only doing extremely large projects. We took on a few projects to get our feet wet in this arena, but then the pandemic hit in 2020 and shut most projects down. We pivoted with our crew providing fabrication and installation of plexiglass panels for our clients in their business locations, as well disinfection spraying services during the pandemic. In the beginning of 2023, as companies opened back up and projects started coming back online, we decided to shut down the new furniture division and develop our construction division. Our goal was to replace the lost furniture revenue we did in 2022 of about $750,000 with new construction project revenue. Last year we met that goal and were able to do about $800,000 in construction revenue for 2023, replacing the lost furniture revenue. As more and more clients are finding out about our construction division, we have more and more projects coming online. In January 2024 alone, we are starting construction projects totaling over $400,000... over half of the revenue we did for the entire year in 2023! We expect to do at least $2,000,000 or more this year in our construction division, which is almost half of the entire company revenue in 2023!
Moving & Installation: For over 30 years, this has been our "bread and butter" for the company. We don't advertise this division as we get our projects from our vast network of clients or from projects that we are involved in providing project management services or construction services. This allows us not to be "the lowest bidder" as our clients know us for getting the job done right and on time. They see the value that we provide and understand that we are not necessarily the lowest price, but they value our level of service. Although this is not a fast growing division for us, it will continue to grow naturally as we scale up our Project Management, Construction, and Hospitality divisions as moving and installation "trickles down" from those other services. Many times we don't have to even bid out a project because our clients are comfortable with our PM Team and tell us to "just handle" the moving part. (We still provide competitive pricing but we don't have to be the lowest price.)
Warehousing & Storage: Our "cash cow" of the company. We currently have a 26,000 sqft facility in Los Angeles as well as 50 storage trailers (48' and 53' long trailers.) During the pandemic, many of our clients requested us to deliver their items back to them as they found they had some extra room at their facilities as they adopted new, flexible work-from-home policies. Recently we have noticed that clients are starting to need storage again, so we have plenty of room to grow this storage revenue. As we continue to fill up our warehouse storage space and storage trailers in 2024, we will be adding $30,000 - $50,000 or more in monthly storage revenue with no increase in expenses, as we already pay the warehouse rent and already own the storage units. This is one of our main focal points for 2024 to build the warehousing and storage revenue back up to full capacity.
MoveCart Rentals: We own and rent MoveCarts (picture an industrial type laundry cart) to colleges and universities to use when students move in to dorm rooms at the beginning of the school year and also when students move out of the dorm rooms at the end of the school year. CPM currently owns over 4,000 MoveCarts and we service institutions as UCLA, USC, UCI, CalPoly, CSU Sacramento, Chapman University, and others. This too, is a very high margin and profitable division with minimal expenses. We store the carts in the trailers that we own when not in use and also make revenue on the delivery and pickup of the carts. Many schools use our carts year after year, as they are convenient for the students, easy to manage, and provide a fast and efficient way for students to move in and move out, which ultimately reduces traffic congestion during this period. This division is another "cash cow" and can easily be scaled up to a national program throughout the USA.
Why are we looking for an investor? For over 27 years, CPM was able to grow steadily providing a good income for it's owners as well as a good place to work and grow for employees. We've seen employees grow from young adults to buying their own homes and having families of their own. Both Ted and Phillip operated with a sense of responsibility not only to their clients, but to their employees as well. Making sure that if they chose to make a career with CPM that they could grow and meet their own goals. As our clients changed jobs and companies, very often they "took us" with them. Over the years, many clients left UCLA and took us to new companies where they were hired. We grew our client network organically, never having to advertise. As mentioned above, we have always felt fortunate to have a company that did well year after year. Some years better than others, but every year pretty solid. We considered ourselves "recession proof" as our clients always called us whether they were expanding or downsizing. However, in 2020, we learned the hard way like millions of other companies that we were not "pandemic proof". Although we were able to pivot and provide services through the pandemic and our work with hospitals and universities categorized us as "essential workers," we took a hard hit. Our revenue cut in half during the pandemic but we did everything we could to keep our doors open and our employees on payroll. As the losses added up the last couple of years, we knew we had to hang in there as our large network of customers eventually would have to get back to business. Finally in the last half of 2023, projects started to flow in and we estimate our revenue to just about double in 2024. But that good fortune brings a new set of problems as rapid growth needs cash to support it and we used our cash reserves to support the company through the pandemic. Ted and Phillip are no longer young men, so we don't have another 30 years to build the company back up. We are looking for the right investor who shares our values and vision and can help support our rapid growth, consolidate some debts, and help us scale up with the intention to sell the company to a strategic partner within 3-5 years. We've done it before and can do it again.