After 25+ years of cultivating working relationships with the local farms and being the leading canal water system expert in Yuma County, AZ, Donald Pelfrey left his job to start his own family business with his wife, in October 2023. Pelfrey Irrigation & Welding will focus on creating irrigation gates for the canals and ditches that provide water for the extensive agricultural industry in Yuma County. Farms will usually order 10-30 gates at a time, at an average of 4 times a year. Gate prices are $800-$1000/ea. That means one order of gates would be anywhere from $8000-$30,000. One farm would generate revenue of about $32,000 - $120,000/year. Our business would also provide the labor to install the gates. The charge for this is usually around $800/each. This would essentially double the revenue generated for each order. This is not something that is currently done. Farms usually have to find another company to install gates and are put on a wait list for a company 1-2 hours away, usually waiting several weeks to months.
There were 456 farms in Yuma County, AZ as of 2017. Donald Pelfrey has close relationships with over 50 farms and growing. That alone opens the potential revenue up from $3.2 - $10.8 million/year. These farms have reported wait times of over 6-12 months from companies out of state because they have been unable to find anyone closer.
A local business owner has been trying to sell his welding company for 10+ years but despite being a thriving business, has not been able to find any buyers. There are several reasons for this.
- The seller does not have his business setup to sell with ARR. This does not allow any traditional banks to finance or place any value on the business itself.
- The business is on 7 acres with a large 5000+ sq ft shop, work stations and tools setup for each of his 5 welder employees and all the metal working equipment needed, but they are older and the banks don't believe they will have much appraisal value to lend against.
- The seller is asking for $1 million.
- The business is in a rural area.
We are looking to raise $500,000 - $1 million, in order to cover the cost of the purchase of the business and our starting operating funds. The following reasons are why we believe this is a good investment.
- The company is currently bringing in an average of $30k/mon after all expenses are paid. This is only with their current welding services.
- All farmers, businesses and locals in Wellton, Roll and Tacna, AZ use this business exclusively or have to find another business a minimum of 40-60 minutes away.
- This is the only metal supplier in the area.
- The business usually has a 6 month backlog of work.
- There are 6 full time employees.
- This purchase would allow us to quickly start building and supplying gates, which is not part of the current business.
- The existing monthly income would allow us to grow.
- The company currently runs only on word of mouth. They have no website or social media presence, which leaves a lot of room for growth.
- The company's biggest customers are the same farmers Donald has known his whole life and worked professionally with for 25+ years.
- This would eliminate Pelfrey Irrigation & Welding's main competition.
Pelfrey Irrigation & Welding has two primary owners, Donald Pelfrey and Tricia Pelfrey. While Donald has the hands-on knowledge and expertise for the industry, Tricia has been working as a Product Manager in the corporate world for the last 9 years. She has experience in business strategy, product discovery, product marketing and growth. She will be using her extensive knowledge to guide the company's growth and expand their customer base.
Without the purchase of this welding business, Pelfrey Irrigation & Welding will have a slow start as we build from the ground up. We would need to acquire land, build a shop and purchase tools and equipment before we could start building the gates. With the farmers waiting for gates from other companies now, there is limited work for their installation.
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