Interesting business opportunity

[Scotchbrite]

I just got a phone call from the owner of a plaque and trophy type shop and he's looking to sell out. He called me because they are just a couple of blocks away and we've worked together on a couple of projects. I know very little about that type of work but it seems like it might be a good complementary business for the sign shop. We have a few products that we source from them, but not enough by itself to justify purchasing the business.

The price he's asking seems really good, but I'm wondering what kind of future there is for it. It seems like this type of product might be vulnerable to Internet competition. The one upside is the purchase would include all of the files they have for their customers.

I'm not even certain what they have for equipment. I'm pretty sure they have a laser and some sort of printer, I think it's dye sublimation?

Not knowing anything about the "trophy & awards" type market, I'm curious if anyone has any insight or thoughts.

 

[Notarealsignguy]

You can look at internet competition as either an opportunity or a threat.

 

[Signscorp]

I would want to see the numbers. If it's profitable and you have someone that can do it at your shop then you would be in a good spot.

We started out with awards and I consider dropping it once a year or so. Look at the average sale price for his jobs and decide if smaller jobs are something you want to introduce into your shop. Personally i find them a little frustrating, they're high effort, and end up being under $100 most of the time. Be prepared to do all these small orders in order to get the big once per year ones.

I would say the biggest factor is your shop set up. Are you looking for lots more small jobs? Or are you trying to eliminate those to focus on bigger projects.

 

[garyroy]

Will it introduce you to more customers like the ones you already have or will it be a completely different market that you don't service?
If it's all schools, and there's nothing that your shop does for schools, it might not be worth it.
Also would you have the "counter time" to be able to service PTA type people, one after another? Especially the small orders?
$$$ per sale makes a big difference in business. I'd spend 30 minutes with someone ordering $1000 worth of stuff, but not $30 worth of stuff.
Just sayin'

 

[Scotchbrite]

You two are hitting one of my big concerns. We are definitely more setup for a smaller number of bigger jobs. I'm a little concerned about embracing the idea of doing a lot of little jobs. I'm also thinking there's going to be a much quicker turn around expectation for these products.

We would probably need to bring on at least 1 employee because we don't have anyone here that knows how to run the equipment they have. Let alone someone that knows how to sell the products.

I was thinking it would be interesting to get an idea of what kind of customers they have to see what kind of market we might tap into. We do some work for schools, but not a ton.

We can make room in our shop for the equipment but their current trophy shop has a pretty large showroom area that we could not accommodate. I'm thinking having a showroom might be a big deal for this type of business, but maybe not so much these days.

 

[Gino]

Maybe one of their employees who ran some of this stuff would come along with the rest of the stuff. All problems solved.

About 20 years ago, we bought a whole lotta stuff from a local company who went out of business/retirement. Got it for pennies. Three buildings worth of stuff. Three machines and an ex-employee. What a waste of time and money. The girl couldn't do what she said she could do and we ended up selling what stock we had. Cost me about $1,000, but sold it all for around $10,000 and they collected it up and packed it. Took them 4 days to get it all out. Think hard about making a plunge into something you know nothing about.

 

[Signscorp]

You two are hitting one of my big concerns. We are definitely more setup for a smaller number of bigger jobs. I'm a little concerned about embracing the idea of doing a lot of little jobs. I'm also thinking there's going to be a much quicker turn around expectation for these products.

We would probably need to bring on at least 1 employee because we don't have anyone here that knows how to run the equipment they have. Let alone someone that knows how to sell the products.

I was thinking it would be interesting to get an idea of what kind of customers they have to see what kind of market we might tap into. We do some work for schools, but not a ton.

We can make room in our shop for the equipment but their current trophy shop has a pretty large showroom area that we could not accommodate. I'm thinking having a showroom might be a big deal for this type of business, but maybe not so much these days.

You'll run into trouble with that most likely. We do lots of smaller decal/sign orders, but it still takes more time than any other type of job. The good customers are sports teams and schools, the rest are individuals and small organizations. I would not say that engraving and trophies bring in much signage business.

If you did still want to do it, you should set up one person who takes the orders and does all the engraving production/design. that way it doesn't bog down your shop.

 

[Scotchbrite]

Maybe one of their employees who ran some of this stuff would come along with the rest of the stuff. All problems solved.

That's what I'd want to do. Reservation with that is the 2 employees that would know the whole operation are also the owners kids. They don't want to take over the business which is why he's selling. Makes me think they are not the most motivated workers and they may have been working for dad too long.

You'll run into trouble with that most likely. We do lots of smaller decal/sign orders, but it still takes more time than any other type of job. The good customers are sports teams and schools, the rest are individuals and small organizations. I would not say that engraving and trophies bring in much signage business.

If you did still want to do it, you should set up one person who takes the orders and does all the engraving production/design. that way it doesn't bog down your shop.

That's what I'm thinking, one person to basically run the trophy operation from start to finish. At most, they have 3 employees now, so I don't think it's a high volume operation.

I really need to see if I can at least get a tour of the facility to see what they have for equipment. Maybe that would make the purchase worth it, but it could be like Gino's experience.

 

[rjssigns]

What type of equipment? Engravers or lasers? Lasers give you many more options. Guy local to me does nothing but plaques and trophies for some of the local schools. He runs an Epilog laser and says he he's busier than he wants to be most of the time.

 

[Scotchbrite]

What type of equipment? Engravers or lasers? Lasers give you many more options. Guy local to me does nothing but plaques and trophies for some of the local schools. He runs an Epilog laser and says he he's busier than he wants to be most of the time.

The business has "laser" in the name so I've always assumed they have a laser, but I have not laid eyes on it. That is the piece of equipment that interests me the most.

 

[ChaseO]

I feel like it's a recipe for a bunch of last minute orders. A lot of people source them online these days, so if they miss that window, they are coming to you in a pinch. If they have 3 employees total, even if two of them are not hitting it real hard, maybe there is enough business there to make a go of it. The books will tell you that or not. I don't mean to be so pessimistic, maybe it will be a home run, but I'd take a look at the books with someone that knows what they are looking at. Lasers can be bought for less than a business. That is my 2 cents, but I have been wrong about business ideas in the past, hopefully you make the right choice either direction.

 

[gnubler]

I'd be all over this if the opportunity was given to me, without any risk or investment. Not sure if there's much value in this type of business, but it probably depends on your local market. We had one trophy/engraving shop in town that folded a few years ago and no one took its place, not enough demand, I guess. The only one around here offering engraving is a couple who run it out of their garage, more of a weekend side gig.

 

[Stacey K]

I get a lot of people ask me if I do engraving but it's just for "a few trophies" or single name plates. Personally, if you could go after a hospital or school...larger jobs then I would. If it's all little orders then it could be a time sucker. But, with engraving the same people might need signs so then you can do it all for them.

 

[Scotchbrite]

I think the biggest reason I'm considering the idea is more of a long term plan. Every time we need to hire a fabricator or installer it's harder to finally get a good hire. I feel like there's going to come a time when we might have to drop the big sign projects and do the small stuff. Since there are a lot more shops to compete with in that area of the market, my thinking is the trophy shop might help augment the sign business.

 

[Signscorp]

I think the biggest reason I'm considering the idea is more of a long term plan. Every time we need to hire a fabricator or installer it's harder to finally get a good hire. I feel like there's going to come a time when we might have to drop the big sign projects and do the small stuff. Since there are a lot more shops to compete with in that area of the market, my thinking is the trophy shop might help augment the sign business.

I think you'd have to shrink dramatically to make that work. I can give you some numbers if you want to dm, but we're one of the big players in engraving/trophies in my market and there just isn't enough money in it for you to make it a longer term play.

 

[Evan Gillette]

Take a look at his books and as others have mentioned look at ONLY the big orders each year and if they are consistent, basically if the top 10 clients in sales each year are consistent and can support the business I would likely move forward, if not probably pass, maybe pass along to someone you know (someone looking at starting a business or side gig) so you still have access. ADA signage is a GREAT add-on to sign shops but the awards are usually a nuisance. It definitely takes a special type of person to make trophies and deal with that clientele day in and day out, I would eliminate that almost completely (maybe make a $500 MOQ policy) and see how the numbers look.

 

[Scotchbrite]

I was vetoed by the other 2 owners, so we're not going to be buying this business. If they decide to sell off some equipment, we might look into that.