buying new printing business

[RAJ]

Hi to everyone,

I am new in this forum and feel lucky to found this forum.

I just need an advise about to buy a new small printing business.

Present owner has a 2 digital xerox m/c, one is 1250 and other is DOCUCOLOR 5065. He also got a RYOBI 3300MR with 7 numbering head and VARN system, and finishing equipment like Electric Guillotine, electric air feeder,duplo DC 8 collator,electric stapler,puncher,manu scoring m/c,offset desktop plate maker and metal plate maker.

I am not sure, how much machine worth.He is doing business since last 10 yr and he has got client base as well, he is running business by himself.

Can anybody please advise how much do I have to pay to buy business ?

Appreciate your answer.

Thanks

 

[gordo]

IMHO, you can get the pricing of the equipment from the original vendors. Also, is the equipment owned or leased?
The real value is in the customer base and possibly the location if that's a factor in the printer's business. He should be able to provide you with records of customer jobs (e.g. Is his customer base loyal multi-job customers or are the customers one offs)? Does he have any intellectual customer property (e.g. Databases) that would make it difficult for his customers to leave and go to a different printer. Does he make a profit? Why is he selling. If you are borrowing money to purchase the business contact your bank, they may be ale to go over the company's finances and give you an evaluation of what it's worth. Your accountant may also be able to perform this service.

Best, gordo

 

[RAJ]

Thank you for your valuable reply.

 

[Fatboysmart]

Find out what the current owner is going to do after he sells the business. If he starts up a new printing business not for away, you will lose most of his customers. Also keep in mind that a lot of customers are connected to the owner himself rather than the business, so don't be surprised if you lose half of his cliental.

 

[OkiTech]

Hi I am selling my business as well, it is should be normal that current owner will sign some kind non-compete agreement like he can't directly contact the customers and can engage is the same business within reasonable distance from your location. Please check that equipment is owned, if leased - it has no value. See if you can arrange to stay in the business for couple of weeks (this may require you put some money on escrow account of attorney who will handle the transaction as things you will learn and see can't just be shown to anyone, just make it is reasonably conditional - if everything the way owner says it is, money should go toward the payment and if not than you can backout, i.e. he says business books $5,000 per week and it is $2,000 for example.) Also I think it is normal if current owner will stay for a month or so to introduce you to the customers and help with easy transition...

 

[RAJ]

Hello,

Thanks for your answer, can i ask one more question ? What are the working capacity and output of DOCUCOLOR 5065 ? are they good machine for medium production. If I want to upgrade which one is good after 5065 for medium production ? and are they expensive ?

Thanks
Raj

 

[arossetti]

The value of the business is probably pretty equal to the revenue from last year.

Edit- And no, a DC5065 is not a mid-production machine. You will have a hard time running anything that will need finishing. The curl will be extreme and the registration is... well it isn't. Your image will bounce from page to page by a 1mm or more. Business cards and the such will be near impossible. Source: Used a DC3535 for awhile.

A x700 would be the next step for mid-production. I think new they would be around $70k, I'm not sure about used.

 

[OkiTech]

Ty the best of my knowledge - the value of the stable established business is 1.5 times the revenue, if it shows a good growth it could be x2 plus all the assets - equipment, etc if any must be evaluated to the market price, not how much they were purchased for.

 

[RAJ]

Ty the best of my knowledge - the value of the stable established business is 1.5 times the revenue, if it shows a good growth it could be x2 plus all the assets - equipment, etc if any must be evaluated to the market price, not how much they were purchased for.

Hi,

Thanks for your reply and good calculation about business. I am buying all that machines with customer base on 60,000 AUD. Is that a good price ? what is your opinion sir ?

Thanks
Raj

 

[arossetti]

Hi,

Thanks for your reply and good calculation about business. I am buying all that machines with customer base on 60,000 AUD. Is that a good price ? what is your opinion sir ?

Thanks
Raj

Way too many factors for someone halfway across the world to give you an answer on this. Before purchasing any company you should seek advisement of a professional. I'm concerned that you would make a $60,000AUD purchase because some random uninformed person on the internet told you it was a good deal.