Great model. Bad deal.
This fire safety service business has something most buyers chase — 95% recurring revenue.
Inspections and fire suppression systems that legally must be serviced every year.
On paper, that should make this a great deal.
But once you run the numbers, it falls apart.
Deal Snapshot
After Financing
Here’s what you actually keep:
You’re buying a $1.75M business… to make about $60K per year.
That’s the entire issue.
Where It Breaks
This deal is massively overpriced for what it produces.
- 5.83x multiple vs ~2–3x industry norm
- Only $60K post-debt cash flow
- ~5 year payback on down payment
- Recent 40% growth may not be sustainable
They’re pricing this like a premium, high-performing operation — but the returns don’t match.
Financing Reality
This is where most buyers get stuck.
At a standard 10% down payment, the DSCR is only 1.19 — below lender requirements.
To make this deal work, you’d need to bring over 16% down, or nearly $300K.
So now you’re putting in $300K… to make $60K.
That’s not leverage — that’s a weak return.
What Actually Looks Good
To be clear — the business model itself is strong.
- 95% recurring revenue
- Legally required services (non-discretionary)
- Established since 1979
- Stable, repeat customer base
This is exactly the type of business buyers want.
But great businesses still make bad deals at the wrong price.
What This Really Is
This is a classic example of:
- Strong underlying business
- High-quality revenue
- Completely broken entry price
Recurring revenue doesn’t justify overpaying.
BizHub Verdict
This deal scores a 2.9 / 10.
Great business model — but the valuation destroys the return.
Recurring revenue is powerful… but only if you don’t overpay for it.
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