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Buying A Sign Business

Texas_Signmaker

Texas_Signmaker

Very Active Signmaker
No mention of Tex and my BIG squeegee all the ladies like to hold in their hand?
gnubler said:
100% agree. Boy I wish I could have had some hands-on help when I first started operations. I was in a similar situation where the previous owners were ready to retire and they wanted OUT, completely. Up until a couple months ago I hadn't heard a word from them for almost 3 years. Then one of them stopped by one day out of the blue and visited my shop for the first time...for about ten minutes before bolting. Sometimes retired means retired. So consider yourself lucky if the current/former owner is willing to help you get launched.

I have to rely on Gino and his gang here at Signs101 for tutelage, which comes with some abuse but I just brush it off. I've learned a lot from Youtube videos as well, mostly install and wrap techniques.
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Westbound31

Westbound31

New Member
Had another training session yesterday. We went to the shop so he could show me a full job start to finish. It was small job of printing and cutting some vinyls that were going onto a pickup truck that a client had dropped off in the parking lot. For the vinyl side of things, he has a Roland Soljet Pro III XC-540. He also has a smaller thermal printer that he doesn't really use much. He got plenty of calls during the day from returning customers and a few from new customers so I took that as a good sign. He has been meeting with his CPA to come up with numbers so we can have a sit down soon and discuss the financials. He bought the Roland brand new and I will get service records on that as well.
 
Westbound31

Westbound31

New Member
So things are progressing, we are going to merge my current business with his business and then the process of completely buying him out will begin. We're working on a deal that will work well for his retirement as obviously it will be a pretty large cut in income for him to go from this business to social security. He unfortunately didn't plan very well for retirement but we will be working out that deal in the merger/buy out. Actually works out pretty well this way as he'll stick around for at least a year and I'll be taking over all of the smaller CNC signs that he currently outsources. Which is part of the plan for me going forward anyways, to bring back manufacturing to the business with my CNC background. Anything thats too large for my CNC will be outsourced for now but the plan is to invest in a larger machine and remove the need for much of the outsourcing.
 
B

BigDogPrinterMan

New Member
Westbound31 said:
So things are progressing, we are going to merge my current business with his business and then the process of completely buying him out will begin. We're working on a deal that will work well for his retirement as obviously it will be a pretty large cut in income for him to go from this business to social security. He unfortunately didn't plan very well for retirement but we will be working out that deal in the merger/buy out. Actually works out pretty well this way as he'll stick around for at least a year and I'll be taking over all of the smaller CNC signs that he currently outsources. Which is part of the plan for me going forward anyways, to bring back manufacturing to the business with my CNC background. Anything thats too large for my CNC will be outsourced for now but the plan is to invest in a larger machine and remove the need for much of the outsourcing.
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Just don’t let feelings and emotions cloud the judgement of what it’s actually worth.

Have you gotten a breakdown of age of client base? These legacy businesses can sometimes be a real struggle when the millennial who knows how to use the internet takes over the buying position at the various businesses he deals with. If the age group is mostly gen x / bb, they still operate on the “I know a guy” mantra. Millennials and gen z do not.

Something to take into account.
 
Westbound31

Westbound31

New Member
BigDogPrinterMan said:
Just don’t let feelings and emotions cloud the judgement of what it’s actually worth.

Have you gotten a breakdown of age of client base? These legacy businesses can sometimes be a real struggle when the millennial who knows how to use the internet takes over the buying position at the various businesses he deals with. If the age group is mostly gen x / bb, they still operate on the “I know a guy” mantra. Millennials and gen z do not.

Something to take into account.
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Definitely a great consideration and I'll get a detailed breakdown on that soon. Right now his CPA is putting together a massive financial company file for me to go over with an accountant of my own. I have already looked at gross revenues and I'm happy with the business performance at the cursory level but will be going over everything in depth with a professional before making any final decisions. He has spent a lot of time working with independent marketing companies on getting his website top rated locally on Google. One of the biggest factors it seems in getting new customers is the location of the building which is right in downtown on a main street. Only issue is he doesn't own the building... so there's a lot of moving parts and a lot of considerations to make. He's been in business for 53 years so locally his business is well known and frequented by towns in the surrounding area. Getting those same people in the door while changing ownership will be key as well as taking into consideration that I should be looking for a permanent location sooner than later.
 
Westbound31

Westbound31

New Member
ddarlak said:
Don't let his lack of retirement planning affect your money spent buying the place, really has zero bearing.
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The buying price will still be the same but the timeline for complete purchase will be different. What I'm working on is finding a way to make it work for both of us. He just turned 70 and is ready to slow down. He doesn't want to see his business have to close once he leaves as he spent a lifetime building it which I completely understand. He's willing to stay on for a full year once I take ownership which should help retain current customers. Like I said, the buying price will be the same but the timeline to complete ownership will be adjusted. In the meantime, merging my business with this one will give me an immediate uptick in work and shift things over from small signs to large ones while also easing me into ownership.
 
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