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While this looked like a good business for me, I don't feel as though I can trust the seller or broker. I will talk to a partner at the brokerage firm tomorrow. I'm not an idiot, and I know when people are trying to rip me off. I don't care what business you are in, increasing profits 100% while sales are down 25% would be almost impossible.
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In most businesses where there's fixed costs and assets, sure, that might be the case. In construction/trades related work where you're only paying labor and material on work you're actually doing at the moment, it could well be true. But doubtful of course. Maybe they did a couple jobs that went extremely well, much better than normal, but because they have a fixed cost "menu" for their work the margins doubled?
Our margins can swing a ton from month to month, depending on how much of our revenue was subtrades (we only markup subs 5-15%, while our own work is marked up 10-30%), if we were over or under progressed on a job, and so on. In the past year it dropped in half, but from 2003-5 it doubled. Again I don't know the nature of the business, but profits increasing while sales decrease for my business is well within reason, and not particularly unexpected.
