Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

This GOLF CART rental shop is selling for $3.5M!!! ⛳️

25 May 2023 · 1 min

Watch on YouTube

0:44

YouTube video (May 25, 2023) by Mike Andes reviewing a Florida golf-cart rental business for sale. The speaker summarizes the offer price and operating details, highlights reported financials (revenue, profit, margin), and warns that the high 55% margins may be unsustainable because competition could easily enter. The video evaluates valuation risk if margins compress and a new competitor appears.

Questions this video answers

$3.5 million

Seven months

100 golf carts

$1,000,000

$550,000

Chapters

This golf cart rental business in Florida is selling their company for $3.5 million, and they only work seven months out of the year. They have a hundred golf carts and all they do is rent them out to tourists. Now the business does $1 million in revenue, and they say there's $550,000 in profit. That's a 55% profit margin. My only concern with a business like this is when you have high margins, that's completely indefensible, which means someone could literally start a new golf cart shop right across the street without any repercussions. I am concerned that those sort margins are not going to be sustainable. And paying a really high valuation, like $3.5 million or six times earnings could potentially become in jeopardy if competition arises. And typically with margins like that, competition shows up.