Michigan Bioenergy & Firewood Distribution, 20-Year Logistics Operation

$600K

Revenue

$600K

SDE

2.4x

Multiple

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Full Editorial Writeup

This is a 20-year-old Michigan business that sources, sells, markets, and distributes bioenergy products and wood products, most notably firewood, to an established customer base. It is not a pure trucking company. The value sits in the combination of supplier relationships, a distribution and logistics network, and repeat customer relationships built over two decades of operating history.

The economics are unusual and worth scrutinizing closely. The listing reports $600,000 in gross revenue, a $250,000 average annual net profit, and simultaneously claims $599,999 in cash flow (SDE) and $600,000 in EBITDA. That means the seller is asserting that essentially all of revenue converts to owner earnings, which is not credible for a business that sources product, runs trucks, and pays for fuel and labor. The far more believable earnings figure is the $250,000 net profit cited in the narrative, which would put the real multiple closer to 5.8x rather than the advertised 2.42x.

The sale includes roughly $200,000 of equipment inside the asking price. The seller is exiting because he is an inventor pursuing patents and new products, not because the business is failing. Management floats a speculative $6 million valuation within six years contingent on aggressive marketing, which should be treated as marketing copy, not a plan.

Why we like it

Firewood and bioenergy for heating are non-discretionary staples in Michigan's cold climate, so the underlying demand holds up in a downturn. Customers buy fuel to heat homes and facilities regardless of the economy, which gives the revenue base a defensive floor.
The business has 20 years of operating history plus long-standing supplier relationships and a loyal customer base, which are the two hardest things to rebuild in a low-tech distribution business. Sourcing access and reliable delivery routes are a real moat against a new entrant with a truck and ambition.
The listing explicitly states the company has operated with limited dedicated marketing, which is a genuine operator lever rather than empty upside. A buyer with basic outbound sales and account development could grow the book without reinventing the model.
At a $1.45M ask with $200k of equipment included, roughly $1.25M is effectively goodwill and relationships. If the real earnings are the stated $250k net, the deal is priced richly, but the asset floor and essential product provide downside protection.

How to improve it

Reconcile the financials immediately and rebuild a clean P&L, because the claim that all $600k of revenue is also SDE and EBITDA is not real. Establish the true owner earnings (likely near the $250k net cited) before committing capital, then reprice the deal to that number.
Stand up a basic marketing and outbound sales function within 90 days, since the seller admits this has never existed. A simple website, local SEO, Google Business profile, and a rep working commercial accounts (municipalities, campgrounds, retailers) should add volume quickly.
Sign or formalize supply agreements with the wood and biomass sources so the sourcing relationships survive the ownership change. Right now these appear to be personal to the seller, and losing supply would gut the business.
Add recurring revenue by launching seasonal delivery subscriptions and standing commercial supply contracts. Converting one-off firewood buyers into auto-refill accounts would smooth cash flow and raise the exit multiple.
Expand the product mix into higher-margin bioenergy formats such as wood pellets, bricks, and bagged retail firewood for hardware and grocery chains. These carry better margins and distribution scale than bulk cordwood.
Route-optimize the logistics network and track cost-per-delivery, because in a distribution business fuel and drive time quietly eat margin. Small efficiency gains here fall straight to the bottom line.
Lock in the seller's operational knowledge with a documented transition, given that support and training are only listed as negotiable. Get supplier introductions, pricing history, and route data transferred before close.

Diligence notes

The headline financials are internally contradictory and must be verified. Revenue, cash flow, and EBITDA are all stated at essentially $600,000, which is impossible for an operating distribution company; demand tax returns and bank statements to find the true earnings, which the narrative implies are about $250,000.
Confirm whether the customer base and supplier relationships are contractual or personal to the owner. The moat here is entirely relationship-driven, so verify how many accounts have written agreements versus handshake loyalty that could walk with the seller.
Inventory and validate the $200,000 of included equipment, checking age, condition, titles, and whether any of it is leased or financed. Trucks and processing equipment depreciate hard and could require near-term capex the seller has deferred.
Assess customer and supplier concentration, since a small distribution business often depends on a few large accounts or one primary wood source. Losing a top customer or a key sourcing relationship post-close would materially change the earnings picture.
The seller is leaving to pursue patents and new products, so probe whether he intends to compete, license, or build anything adjacent to this business. Secure a non-compete and clarify ownership of any processes or IP used in operations.
Investigate seasonality and weather exposure, because firewood demand is heavily concentrated in cold months. Review monthly revenue over multiple years to understand cash flow timing and the working capital needed to carry inventory into peak season.

Source

Originally listed on BizBuySell. View original listing →