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Buying out a competitor?

cartoad

cartoad

New Member
Looking at the posibility of a competitor who is going to sell off her business in pieces as she has been unable to sell it as an operating business. So I will have the opportunity to purchase the roll stock, substrates, and files. For the right price this could be a big bonus for us, but trying to decide what would be a fair price to offer on the items.
For the vinyl, printable, and substrates I am thinking of 60 to 75% of current cost. Any thoughts??

As for the files, I would get 6 years of customer files, both pricing software and Flexi files, hard copies and the electronic version. But have no idea on how to value it. Any suggestions are greatly appreciated.

And then there is a large volumn of clip art files, again I am thinking of 60-75% of cost as being fair and reasonable.

Thanks
 
Circleville Signs

Circleville Signs

New Member
You are SUPER high. I'd offer roughly 20-25% of value on the roll stock, and around $1/customer in her files (to include all art files as well). Her customers weren't enough to keep her in business - why would you pay for them through the nose?
 
rjssigns

rjssigns

Active Member
I make no apologies and am brutal when it comes to something like this. Look at the books and compare against the client list. That is where the real money is to be made. If there was any to begin with.
Vinyl has a finite shelf life and you don't know how long it's been sitting. Pennies on the dollar there. Everybody thinks their leftovers are worth a million bucks.

Nothin' personal just business.
 
threeputt

threeputt

New Member
Kind of got to go with the foregoing posts.

Materials way, way down. Maybe 15 to 25 percent.

Clients, hard to say. If you're getting the client art files and their pay history including what amounts they've been doing and such, that might be worth a bit more than a dollar and account.

Could be as much as five times that. But....in the absence of a contract, they are not obligated to do business with you, and you only.

Keep that in mind. Just because you "have" the account. But if you've got the proprietary art files, then you've at least got a leg up on any other competitors out there.

Good luck.
 
rjssigns

rjssigns

Active Member
ProWraps said:
why would you buy a failure?
Click to expand...

Why not? Thousands of people made millions during the Great Depression.
There are always good bones to pick clean in nearly every business failure.

Just bought an $1800 heat press for less than 400 bucks from a guy that went under. Got a Synchrowave optioned out with 6 hours on it for a grand and the guy delivered it! (head unit alone was 2200)

Just business, nothin' personal.
 
WildWestDesigns

WildWestDesigns

Active Member
rjssigns said:
There are always good bones to pick clean in nearly every business failure.
Click to expand...


Absolutely. I knew a guy that went to a restaurant that went under and was getting rid of all their kitchen equipment and he was able to deck out his personal kitchen with commercial grade stuff for cheaper then buying top of the line consumer grade equipment.

Although, at times that man does have more money then sense, but it's his to use as he sees fit.
 
L

Locals Find!

New Member
Spend a few dollars and hire a business broker/evaluator. Follow their advice. A good Business Broker/evaluator is going to be able to give you a much better idea of the value of the business pieces your trying to buy than trying to do it on your own.
 
cdiesel

cdiesel

New Member
I think Prowraps was talking more about the client list. Materials & equipment are a commodity. Price them and buy them. The client list, however, didn't work for the last shop... Probably not worth much.

1) The last shop wasn't making enough for the owner to want to stay in biz.
2) Who's to say they'll use you when the other guy's gone?
 
Pat Whatley

Pat Whatley

New Member
50% of the value of the consumables IF they throw in the customer files. Think about it, what else are they going to do with the stuff?
 
TyrantDesigner

TyrantDesigner

Art! Hot and fresh.
**** this ****. buy her **** at 10-20% it's value for materials, maybe 25% for the equipment that has been beat to **** and **** her ******* computer files ... computer files are probably pieces of **** you have to fix every ******* time you open one up. and the clip art ... next to nothing is what I would pay for it ... I passed up buying a 'sign shop' that had a 32" gerber, a half way decent computer, 2 work tables and the 48x96 cutting mats (and some ****ty supplies) because they wanted $4k for it all ... most I would pay for a shops entire setup would be $1k or $2k depending on the equipment ... even then that is pushing it. **** her get yourself some really good deals.
 
J

Just Another Sign Guy

New Member
a TON of assumptions are being made from the information we have been presented with. A lot more information would be needed to give an estimate of the value of assets & intellectual property than what we have been given.
 
TyrantDesigner

TyrantDesigner

Art! Hot and fresh.
Just Another Sign Guy said:
a TON of assumptions are being made from the information we have been presented with. A lot more information would be needed to give an estimate of the value of assets & intellectual property than what we have been given.
Click to expand...

assumptions ... not really, equipment devalues as a resellable component extremely fast and if it comes down to it ... I will go by ebay pricing for equipment then quote at 50 - 75% of that price, software I will only take with a machine and it only holds value with the ability to have the liscense transfered and even then 25% of it's actual value (if that), clipart is not something that is a comodity in a sale (crap, i have 4 vehicle template disks and never paid more than $10 for each one) ... materials are only good if they don't have a shelf life and if they do ... not worth butt wipe ... if they don't ... 10%, tools are 10% their actual retail price (same price you would get selling it to a pawn shop) If someone want's what they paid for their busted p.o.s. that didn't make them money ... I will just laugh and walk away. otherwise my starting max for an entire cut vinyl shop will be $1k. (basically if they have a decent plotter, complete computer system that is bug free and fully functional, jammed full of legal software that is fully transferable and a ton of essentials like drills, tools, etc) If they have an aqueous print capability I will say starting max $1.5k-$2k depending on equipment and it just goes up. I refuse to pay for client lists, files or a company name ... leave that **** in the street so I can run it over with my car. I don't want your weak sauce reputation to follow me.

I don't care if you have a sign shop, one man repair company or a 20 employee retail store ... you won't ever get what you paid for the stuff inside that business if it can't support itself without you being there ... and even then you better hope you don't have an employee who is doing it all for you ... if you sell he/she is most likely gone as soon as you can say 'and here is the new owner' your dead business means you are going to have to sell for what you can get (which isn't much).

So in short, **** her.
 
Bly

Bly

New Member
50% of stock, max. If it's not way past use by.

Her client list is probably worth as much as pulling numbers out of a phone book.
 
SignosaurusRex

SignosaurusRex

Active Member
Bly said:
50% of stock, max. If it's not way past use by.

Her client list is probably worth as much as pulling numbers out of a phone book.
Click to expand...
....more if he has the digital and hard copy files along with what he already possesses in the way of biz sense and skills. A plus if she will assist transitioning her clients over to him ....insurance against the other competition that has not put up a dime hopeing to swoop in when the curtain falls.

CT......Make sure you get a "Bust A**" installer in the deal! :wink:
 
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