$$$ can there be a decent income $$$

[jdelbar1]

Hi everyone,
I am looking into buying an existing sign business. I come from a commercial graphics background for many years but have always worked for others, (not signs but commercial printing). Anyway, can there be a decent income from this business and can the product line be increased to have multiple forms of revenue?
After reading some of the posts I get discouraged. It is like when I went to a SCORE,(SBA retire business owners), seminar. All I heard was negativity on any business. It is very discouraging but I do expect some of that.
In this sign business I am looking at the owner is very laid back and does "0" marketing and only does retail cut vinyl so the numbers do not look all that great but with a little ingenuity I can see it expanding to other media.

Back to my original question, can a living be made with enough left over for expansion capital to warrant the many hours that would be needed.


Thanks for any responses that you are willing to give. . . whoo boy! Now I am ready to hear it!!

John

 

[Replicator]

John, Welcome !

There have been so many threads on this precise topic . . .

You should do a search as well as wait for your responses to this question !

 

[Derf]

Hi John.. Welcome..

YES their is plenty of money to put in you pocket from doing this business.

HOWEVER you must have the Drive, Education, and if you don't want to eat top raman every night while living out of your parents living room then you need MONEY... and lost of it.... LOL

Actually if you had enough Cash reserves or Line of credit to carry you for a few years in the down months and during the learning years of your business then you can make a great living.

I caution you that this will NOT be easy or Quick! to build a great business that can sustain it takes building momentum and that is slow at first.

I think if your smart, driven, and have the Cash it will take about 3 years for you to start making real money and then you need to spent the next few years paying back all the money you borrowed. and then if you play your cards right you can even get very wealthy..

Of course you can go way into dept get into drugs and hookers and end up in jail too..

Seen more than one business go both ways.

 

[mystysue]

Well in your situation it really depends on alot of factors... We did kinda the same thing that you are speaking of doing, and had business backgrounds alot like yours in commerical graphics. Things you need to look at in my humble opinion are the location of the shop, the annual income of the shop, time the shop has been in business, the Customer List, will the old shop owner stay and train you to apply the vinyl and to introduce you to the customers. .. If the annual income there now is not good, it may be an uphill battle to get it to where you wanna be.

When we were purchasing our shop we looked at the income as it was and figured we could survive on it till it grew. Its been about a year now and we doubled the income he had.. But in many cases we were lucky and we had some real plus's going into it. The customer list that he had built was very good, as we have some accounts that always are needing signs.
So i guess what im saying is there is not a really cut and dry answer to what your asking.. Yes there is money to be made but look real close at what your buying and the price you are paying.. Is the guy leaving the business now because hes losing money?? It would be hard to turn around a shop that is losing money or has a bad reputation. So look very closely.. also if you have an accountant have him look at the figures.. etc.. ..
and as to expanding.. that is exactly what we did with the business.. we expanded what we offer and expanded the business hours.. the old shop owner was only working 6 hours a day, 4 days a week.

 

[Techman]

You can make good money. But like anything else it takes commitment.
IF you just wanna hang around and play at it you will never make great money. IF you just hang around and cut just stickers you could make some but not good amounts.
IF you get into panels, and sign cans, and good design work then you will get into the realm of better money.

When your doing just two large panels a month then you are gonna make some nice money. I did one job where I just about bust out laughing in the guys face when I quoted the job. It was double the panels price plus double my price plus install. Its all relative. And, nothing feels better than when the customer hands you a final check and its bigger than many person take home in a month and its all in your pocket.

 

[Richard Flint]

Haven't made my first million yet.....so I'm starting on my second! :Welcome:

 

[jdelbar1]

Wow, Great responses keep em' coming.

Thanks,

John

 

[jdelbar1]

By the way, shouldn't everyone here be busy making signs? lol

john

 

[Derf]

Techman... That's so true...

Last year I did one job that was $35k and when I got my ballance chack for 16k and it was most all profit and the same day I got a stack of checks in the mail from a few big contracts and when I went to do the deposit I said to my self... "damn I'm depositing more than most people make in a year" of course it's not going to be in the bank long but it still felt good.

I went and bought my FC-7000-130 the next day!

 

[Derf]

By the way, shouldn't everyone here be busy making signs? lol

john

NO! that's what employees and equipment are for!

 

[Gino]

:Welcome: from PA.


You get out... what you put in. Kinda like the computer or anything else in life. Nothing will do the work for you unless you set it up and get a business where you can delegate.

In your case though, maybe the wheels have been set in motion, not to your liking. If so, why buy a business that doesn't have potential or was abused ??

Start from scratch and do it your way and take the credit if it's successful [or not], then you won’t be able to blame someone’s earlier screwing things up before you took the reigns.

Good Luck....

 

[jdelbar1]

Not bad for being posted for only 30 minutes. Some real good stuff here so I don't keep getting bogged down in that negative crap.
thanks,
john

 

[high impact]

The first sign biz I bought was a retired gentleman who developed cancer and lost his biz. We found out about it after he had gone out of biz though. I wish I had found him sooner.

We purchased this "dead" biz anyway and put him on staff "part" time. It worked out great cuz he was able to work when he felt good and he taught us alot (granted alot of it was old school). Gave him new life and the business went from "complete shut down" ($0) to 30k per month in first 8 months.

Now, that just didn't happen...it took tons of work!!! And the former owner fought us a little when I backed a dumpster up to the building and filled it to overflowing with old "junk". But he understood later I think.

You can do great in this biz but it's not instant success...don't plan on getting rich quick. You need to be somewhat unique if there are other shops in area though. What will separate you from the competition?

GOOD LUCK!!! If you take the plunge...don't look back!

 

[jdelbar1]

This business I am looking at is around $50,000 to purchase with a gross of about $95,000 existing. After working the numbers it seems that the toatl owners benefit is about $35,000. Does this sound right?

John

 

[Derf]

NO!..... 50k for a business that grosses only 95k seems a bit steep to me!

Think of the equipment you could buy with 50k

I would start from scratch and spend about 30k in equipment and deal with the fact that your not going to have the greatest year in sales your first year

Now I could be wrong because this is a very complex issue with way to many variables... but that is my gut feeling.

 

[onesource]

Yeah thats close but with a little marketing you could increase those figures easy. Do a market analysis How many shops are you competing with in a 30mile radius How big is the city Whats the main demand How is the business located (road front, shopping center, hidden from view, existing home based etc.). These are some things to think about
A friend of mine had an established sign biz that was kinda out of sight and he did well. When he had to move because of new shopping center plans he found a new location that was in direct view of traffic his numbers nearly trippled and he had to hire more help.
You probably already know this but trying to help
Good luck
But I have never been the one to understand buying a franchise or existing business unless the profits are huge
I would just buy what I need and open

 

[jdelbar1]

This is exactly my concern.
Do you buy an existing biz hitting the ground walking in this case but at least there is an income flow to work off of or do you suck it up and do a start up at a lower buying cost but a starting form "0"?
This is a real hard question, there seems to be 2 schools of thought. One is so what you buy an exhisting and pay more as long as you can make payments which inturn buys you time to build it up and you can improve on the model that is already in place at a time when cash is so desperatley needed, the other is why pay more when you can have a lower nut to deal with.

Confused

 

[threeputt]

Value of the business can be stated in a variety of ways. One way, that I've heard about is this.

Take the gross sales figure for the year, subtract the owner's salary. What's left can be multiplied by a factor of anywhere between 1.0 and 2.

That's a rough snapshot of the value of the business. Very rough. The equipment is not figured in because that is what is needed to perform the daily operations. Employees don't impact either.

Regarding your other question: I bought this business 8 years ago. All I had to put down on it was $20,000 cash. Made payments for four years. I now own it. It was only doing $105,000 per annum when I purchased it. We're nearly three times that number now because the previous owner didn't really work it. Absentee owners.

I won't say you get rich in this, but you can make a nice living.

 

[Pro Signs & Graphix]

can a living be made with enough left over for expansion capital to warrant the many hours that would be needed

It all depends on the equipment located between the shoulders, ie: brain and heart.

There is money to be made, and about 3 million directions a business can profitably evolve. What this business is NOT - get rich quick.

When making any purchase, business or equipment, use you head not your heart. If the figures of this business are not good, what are you buying? It may be a good deal anyway, but you need to do the math - only you and an accountant can do that.

 

[high impact]

There are MANY variables that will determine what a business is valued at. No one here on the forum can determine what that value is with just the figures you shared. You must look at ALL the variables.

I've started businesses from scratch and purchased turnkey. Turnkey is actually much easier to jump in and just start rolling...you've got a pot to work out of. HOWEVER, you could be purchasing a pile of junk as far as inventory and equipment. Continue to do your homework like you are.

Take the advice you get here...it is very good. Look at your market, current inventory, market value on equipment, commercial accounts, repeat business, inventory, name rights (small town?). LOOK AT ALL THE NUMBERS. If he is unwilling to allow you to snoop then RUN away. I tried to purchase another sign shop a couple of years ago and the owner kept "telling" me what the biz did and would not show me true numbers. I finally spoke with an employee (dangerous) and found out sales and inventory weren't near what he was telling me. So I lowballed him and now he thinks I tried to rip him off. He's the one who never sold and is now out of biz.

So we started from one from scratch...takes a little longer to build up in my opinion this way. BUT my equipment and inventory is what I have purchased to meet my needs and vision.