26 Year Municipal Water Department Compliance Agency | 97% Client Retention Rate | All Government Clients | 500+ Clients | Growing Every Year | 72% Margin

Pending

Website Closers® presents a rare Technology Business opportunity with a specialized client base consisting of Municipal Water Departments and other city governments, a very lucrative set of clients that has large budgets from state and local tax revenues.

This company helps these government offices follow the mandated rules of U.S. environmental and safe drinking water laws, a crucial need for their agencies. The company has 26+ years of experience producing and printing Consumer Confidence Reports for these agencies, which recognize the value of their work. A whopping 97% of the company’s clients stay with them long-term, and while the company’s average contract is valued at $5,000+, the company’s Lifetime Customer Value is considerably high, at $80,500.

Having served more than 500+ clients over the past two decades and handled a stunning 80 million reports, the company benefits tremendously from word-of-mouth referrals and glowing testimonials from satisfied customers who have included directors or superintendents managing water departments across the country. These clients have also included major cities such as Atlantic City, N.J., Decatur, Ill., Providence, R.I., and Beaumont, Texas.

The company is also unique in having few if any direct competitors providing a similar mix of copy writing, design, and printing services, combined with a thorough knowledge of federal Safe Drinking Water regulations that municipalities must comply with. This has made the company a leader in this vertical, and with a rock-bottom low churn rate of just 3%, the business continues to maintain its prominent position in this field.

Even though the company has been in business for almost 3 decades, their customer base still continues to grow by up to 10% annually, not only from client referrals but also direct mail advertising courtesy of a database of 55,000+ email subscribers. Telemarketing has also enabled the company to continue its solid growth patterns in recent years.

This business represents a clear opportunity for a U.S. Buyer to acquire this company and then scale it quickly by launching new marketing efforts such as an SEO program on the website, an education blog to expand their customer base, and by hiring a dedicated sales team to contact additional municipal water departments around the country.

Business Broker Takeaway

Our analysis of this business shows that the value propositions present are strong for a first-time buyer looking to get into the online space. We are excited about this business for 4 core reasons:

1. Strong Growth Potential. The federal government is giving this agency huge new opportunities. Passage of the Water Infrastructure Act of 2018 mandates that by 2027, all water departments must provide a second CCR each year, rather than the current mandate of a single annual report. By providing two separate CCRs to clients, this company is projecting a minimum 27% boost in revenue, and perhaps considerably higher. The company is also well-positioned to help water departments come into compliance with new rules under the Americans With Disabilities Act, and in providing access to public reports in multiple foreign languages. These are services the company already offers, and with an expert knowledge of federal laws, the company can quickly adapt to any changes in federal rules. The company has already updated its order process system and tracking management system to accommodate the new requirements.

2. Proprietary Systems. Over the years, the company has developed two proprietary systems that have allowed them to continue to achieve very strong margins. The company is now able to manage thousands of client reports at scale, and prior to the introduction of one of their systems, it would take a graphic designer 5-6 hours to design and layout just a single report design from scratch; now a designer receives a fully laid-out report with the style guide already applied, reducing the total design time to 30 minutes, on average.

3. Experienced Team in Place. A highly automated business, the current owners work as little as 1.5 hours per week, usually focusing on overseeing their marketing and direct mail schedules, and handling accounting and finances. The company employs a full-time senior project manager who supervises all daily operations, and that includes being responsible for the flow of each project and tracking the activities of 10 contractor employers who work as graphic designers and compliance editors. Because the project manager runs the entire operation with the help of the company’s internal, automated management system, the business successfully meets all project deadlines to their customers’ satisfaction. Testimonials from past clients demonstrate how effectively the company has impressed these customers with the quality of their work.

4. Recession-Proof Business. Within virtually no direct competition, the business has been able to continue innovating, creating systems and processes that have given the owners a minimal workload while ensuring their clients successfully meet all CCR compliance rules. Because these municipal agencies remain operational even during economic downturns, the company has been able to continue growing its customer base and thriving during even the worst recessions. Municipal water departments have no choice but to deliver a professional CCR each year, which is why agencies always budget for this task, and why the company has a nearly 100% return rate. Because water departments often face persistent staffing challenges, the fact that their workers are stretched too thin is another key reason why they actively seek outsourced solutions.

The Company

For nearly 30 years, this company has become the compliance guru for hundreds of municipal governments in the U.S., helping these agencies avoid compliance violations and enabling them to deliver 100% compliant Consumer Confidence Reports to the state government. The company offers a “No-Worries” Compliance Guarantee that all reports will always meet state requirements.

The company has launched a host of additional services that include handling mailings, foreign language translations, ADA compliance, e-filing, and report hosting on the web. The company’s next step has been exploring the opportunity to introduce an AI component into its report builder application, which could eliminate the need for clients to enter technical information manually and make static reports more dynamic. AI technology could provide this business with hands-off management and the ability to generate a compliant CCR with minimal effort on its part.

Another significant benefit for a buyer is that the company has a very detailed Standard Operating Procedures policy in place, covering every step of the production process. This means a buyer is not dependent on the skills that the current owners bring to this business. The process they now have in place can be duplicated by anyone, regardless of their background or skill set.

Today, more and more municipal governments are establishing business arrangements with private contractors for specialized and high-skill tasks. Doing so has saved their agencies money and given them a higher level of operational efficiency.

With this company’s solid customer base, an excellent reputation within the industry, and lack of competition in this specialized vertical, the new owner gets a company ready to be scaled and to become a leader in providing expert services to an unlimited number of government agencies.