Sale or Purchase of Signmaking Business.

[Colin Crabb]

Will you be taking on the staff?

Are the owners retiring / leave the trade completely?

[James Bateman]

The owners will be leaving and due to a previous downturn, two members of staff were made redundant.

[RobertLambie]

Personally, I wouldn’t buy anything at the moment. Especially with something like this!

If you are looking to buy the company, you should purchase based on 3-5 times their EBIT, not their turnover. In short, You want to know what their annual “clear profit” after every single cost is deducted, but before taxes.
You will also want to go back 3-5 years of accounts to see the profit pattern over time.
i.e. is it on a constant decline, rising or fluctuates? then base your offer accordingly.

Obviously, I am generalising here, there are lots to take into account but this is a good starting point to know if its worth going any further.

I would sit-tight and watch it close. you may find that they may not be around by the end of the year, along with others. I think 2020 was just a warm-up for what’s coming. survival of the fittest!

[David Hammond]

Most small businesses are not businesses, but jobs, with owners earning a poultry wage. (perhaps not the case in your situation)

It depends on what their work consists off, if they’re churning out 1000’s correx signs at £5 each, is that really the work you want to be doing. What are the customers like, will they pay ‘your’ prices, or just go the next cheapest?

If they’re closing, then their customers will need to find somewhere else, so you could benefit without spending a penny?

Personally, we’re sitting tight, and riding out and start rebuilding when there’s a little more certainty in the world.

[Chris Wilson]

Was a flat out no from me.

But the council/government contracts raised my eyebrows. But I’d want to see every invoice for that.

There’s one for sale in my area. Incredible price that made my jaw hit the deck, but if they sell it for anything close to that then hats off to them and fair play. And am viewing it as it will go one of 3 ways.

1) it will never sell or not quick enough for them and they will shut up shop and sell the assets.

2) someone will buy it for silly money, start loosing money and fold

3) someone with some sense will haggle it down and buy it for much less and give us a hard time and run for our money day in day out. This is my least preferred option but got to be real about it.

But I also know that one of the printers has dampener issues or something and drops nozzles not long after a clean, that there CNC machine is dreadful and that fair few signs have come off the wall that they have fitted.

Would I buy one 60/100 miles down the road from me… at a good price maybe. But I don’t think I would locally.

[Colin Crabb]

So why I asked about owners and staff:

they’re not retiring or leaving the trade, so nothing stopping them from opening a new company again at a later date, or a member of staff from ‘having a go’ and opening… attracting the old contacts.

Buying ‘Good Will’ isn’t worth very much at the moment.

• This reply was modified 3 years, 3 months ago by  Colin Crabb.

[Steff Davison]

Now is a great time to expand, provided you have done your due diligence, my way of looking at things is be brave when people are fearful, and be fearful when everyone else is being brave (reckless).

If you can buy at your price, rather than theirs then look into it further. Waiting till it closes is fine if you just want the machines ( but from what you have said I think you want their customers) Good luck

Oh and an additional £200-£300K per annum isnt to be sneezed at either( even if that only nets down to an additional £20-£30k a year.

• This reply was modified 3 years, 3 months ago by  Steff Davison.

[James Bateman]

Thanks for your replies, very insightful to hear how you would all feel about the situation.

It’s something that we’ve been considering recently, which is actually selling to a local, similar signmaker. Pre-lockdown, we were expanding but took an unexpected downturn.

The first lockdown definitely helped me pause and look for other opportunities, to learn a new skillset which has changed my career path indefinitely.

It looks like the majority of you would steer clear, which is good to know as it means now might not be the right time to sell. Better off holding out until confidence returns.

[Chris Wilson]

Awwww.. I feel like the plot line has just totally turned on us all there 😂😂😂😂

There’s no harm in putting it up for sale. Just don’t have a billboard outside the unit and you never know who will come along.

• This reply was modified 3 years, 3 months ago by  Chris Wilson.

[James Bateman]

Apologies Chris, I’ve watched too many M. Night Shyamalan movies and couldn’t resist.

In all seriousness though, it was never my intention to deceive, merely gauge how everyone would feel if an opportunity came up.

Personally, I would be hesitant to buy another signmaker out right now, but it looks like holding out for the right buyer might just be the way forward.

[Pane Talev]

<font face=”inherit”>When I was selling my business, as a one band man, operating </font>successfully<font face=”inherit”> 10 years, I never completely understood the sentence:</font>

“There is no business for sale – you are the business, once you are gone, the value of your business = 0.”

<font face=”inherit”>I personally don’t agree with this. But that is me. I was turning over quite a healthy</font><font face=”inherit”> amount. Keep happy 3 of my main clients and you make the 20k (that you pay me) in 3 months. Plus if you offer extra service – potentially you make more revenue. </font>

[James Bateman]

That’s exactly the way I look at it. It’s effectively buying the market share.

We all know how hard it is to land some of the high rollers and once happy, they stay loyal (especially the corporate and local council organisations).

We’ve been going over two generations, so there’s incredibly strong roots that can’t be torn out without buying the tree! 😀