Suggestions On Selling Print Company

[PrintingFools]

We have a print company that offers offset, digital and large format printing. We will make 1.2 million this year. We have a growth of 10 - 35% on a dependable schedule. We own our own digital preses and large format machines . I keep my payroll from 15% to 25% and we carry zero debt.

But, I was just diagnosed with an illness that requires me to retire. I didn’t plan on selling or retiring this early at 46.... but I have no choice. This is really not the future I had imagined.

My big question is “how and where do I sell” ?
I have had people tell me my business is only worth around $450,000 and others tell me it’s worth 1.4 million. I get mailers all the time “we sell your business “ but they don’t look legit.

Have you ever ever sold a business?

How did they determine the value?

How do I find the best company or person to sell my business?

I am also worried about a loss of confidence in our clientele if they find out the business is for sale.
It is very competitive in our area.

Thank you in advance, The Printing Fools

 

[PricelineNegotiator]

Very sorry to hear that PrintingFools. Where are you based? We also receive mailers from Allegra saying that they will buy our business.

 

[PrintingFools]

Very sorry to hear that PrintingFools. Where are you based? We also receive mailers from Allegra saying that they will buy our business.

Thank you PricelineNegotiator , We are located in Las Vegas , Nevada

 

[AP90]

First off, sorry to hear about your health problems. Thats very unfortunate as Ive followed some of your post and you seem to be doing well in business.

Pricing a printing company can be difficult if you ask me. Your real assets will obviously be considered in your sale price, along with cash on hand and any contracts you might have. But the kicker is your client list. Essentially it is only going to be worth what someone else will pay for it. Like you said, being up for sale might instill concern from your clients, and that is something a potential buyer will have to deal with also. You mentioned you are going to make $1.2 million this year. Thats net profit, and not gross correct? Pretty good if thats net. Ive heard a few different ways people valuate a business. One is 2.5x the net profit. Another is simply gross sales of the business = price. I feel that a multiplier of net profit is more accurate and fair.

My guess is you'd need to find a buyer who is going to want to make it as seamless and as invisible of a transaction as possible so then people don't realize that they are now dealing with a new owner. As long as their CSR's and sales people are the same chances are the clients will never know.

 

[gregbatch]

Very sorry that you are dealing with health issues. Been there. Had to close a month after opening due to cancer. A good business broker can take a load off and will help you value the business and hustle to get it sold. It's worth the commission. Typically, a multiple of net is the best model. A large customer base is more attractive to buyers than a smaller base of big customers. From past experience at shops that changed ownership I will tell you to be up front with clients. I have seen customers walk because the change was kept a secret (almost). Broken trust is difficult to overcome. It is far better to assure your clients that the same great people will be there serving them and you are going to find a new owner that cares as much as you do. For the new owner's sake, try to convince them NOT to make any changes for at least 6 months. Keep business as usual and the clients will be put at ease. Phase in any changes slowly.

go to buzbuysell.com and find a broker for your area at the bottom. Talk to several. Better yet, look at listings in your region for print shops and talk to the brokers for those listings.

 

[pacart]

I work for a company that was bought by another within the past year. From what I understand, the deal that was struck was a purchase price for the equipment being transferred and then a schedule of percentage of sales that gradually drops to 0% by the end of year 5. I am not privy to what those percentages are. I do know of many other companies that have done this and it has worked out. The good thing about this structure is it is based on performance of your clientele and reduces risk for the buyer. The rest of the assets were auctioned off.

If you have any trusted competitors in the area, they actually might be interested in buying in this fashion.

 

[Lorenzo lab guy]

Tom Crouser has a lot of good information on valuations and selling a printing business on his site: