Why sell equipment and not shop?

[WildWestDesigns]

WildW……

The OP was talking about selling the business along with the equipment and getting more money as a combined effort.

That's true, depending on how they formed the business they may not be able to "sell" their business only the tangible assests. It just depends. I would actually only be interested in tangible assests from my standpoint, that's not everyones stance though.

Most sign shops line up like vultures when a shop goes out of business or just closes its doors before the last flurry of attempts to stay open. Most places I’ve seen trying to sell the business end up…. the guy goes back after hours and tries to take things out illegally to sell a few more things cause he didn’t get his asking price. I know of a guy that got caught in his shop because he said it wasn’t right what he was being forced to take and was caught red-handed coming out through a chained off window at a Sheriff’s Sale with ink and screens.

I would questioned a person's ability to run a business if that was something that I've also "seen" happen around here, however, even if that's the majority of what you see, that doesn't mean that you could extrapolate from that shops that are just "selling their crap" did so without testing the waters. I'm not saying that it isn't true or that it couldn't be true, but what you have just isn't enough to right off the bat jump to that conclusion.

I can tell you all that I would sell would be "my crap" if I were to go belly up. Trust me, I've testing the waters and know how to run a business and this business in particular.

The owner’s capabilities boil down to what the books say, not what you think or say. Black and white or red is all that matters in a buyout.

Yes and no. You could have an extremely gifted sign maker and business owner, but for whatever reason just didn't make it(be it location, or some type of fees going up quickly, I don't know), that's something that wouldn't be able to be distinguished from the books as easily. In the end it's more about the bottomline, you are correct there, but that doesn't tell you all the story.

We all like to think of terms of Black and White(or Red), but we actually live in a Gray world.

Eventually we bought a building and will probably retire from the sale of that building alone.. It doesn’t need to remain a sign shop to sell. It can go as any number of businesses. So, you see…. location, equipment, and many other things will not deter a customer if you market yourself wisely.

You are right about that. Buildings can almost always be used for something else, but the biggest difference that I see here is that you bought the building, you aren't renting, leasing whatever. I know quite a few successful places that actually did a C/B analysis and it's better for them to just rent then it is for them to buy(again depends on the area that you live in and their rules and regulations etc) and that make it another hard point for a business to be sold.

I can understand your point, but those cases are far and few between for the most part.

Could be possible, probably statistically true for the most part because in order for it to technically truly be for the most part, it would only have to happen the way you see it at least 51% of the time and I'm willing to bet that it's at least that way considering the amount of people in this game. The odds just favor that too much.

 

[ams]

I am not talking about failed businesses. Lets try this.

Lets say my business is 10 years old, I do $500,000 in sales yearly. I have 10 corporate contracts and 50 recurring customers. I have $80,000 in inventory.

Now does that mean my business is only worth $30,000 because of the equipment being used rough? My business isn't worth a penny more? It's not successful but it's failed?

Come on now, if I did $500,000 a year in sales and took home say $150,000.
Don't you think that if I listed my business for sale for say $135,000 that people would jump all over it?

 

[Locals Find!]

The contracts might be worth something depending on how they were written.

That would be up to a good business broker to help decide. A good business broker, lawyer and an accountant. Going over the entire business will help determine value.

When selling a business what you think its worth is irrelevant what others think its worth is all that matters. Your leaving the business.

Something is only worth what someone is willing to pay.

 

[threeputt]

Come on now, if I did $500,000 a year in sales and took home say $150,000.
Don't you think that if I listed my business for sale for say $135,000 that people would jump all over it?

There are business sales models all over the web. It's pretty easy to figure out what your business is worth.

An earlier poster hit the nail on the head. If your business is only throwing off say, $45,000, then a purchaser buying it is buying a job.

In your particular instance you'd have to deduct what a capable business manager (of a 500K per year business) would ask for in salary. Maybe it's $65,000 for example. Then any amount over and above that is company profits. In your case it's 85k.

That's the important number. In your example yes, for sure, if you're netting 150K on 500K in sales, and there's assets like equipment, real estate, or other then you've "got something to sell" as they say.

You're doing quite well as a sign company. Good for you!

 

[ams]

There is one sign shop in my town that has 60 - 65 employees and $7+ million in sales a year. I've seen the figures. So it is possible to do.

But always, I will sell my business and you can all close yours.

 

[Locals Find!]

There is one sign shop in my town that has 60 - 65 employees and $7+ million in sales a year. I've seen the figures. So it is possible to do.

But always, I will sell my business and you can all close yours.

Your a cocky little brat aren't you?? I mean I came on here being a bit of a prick when I started but, man your really going all out. Good Luck with that.

 

[ams]

Cocky has nothing to do with it, I am stating a fact. I am no better than any other sign professional. But I do know a business can be sold and not have to close.

 

[astro8]

Okay here is a big mystery that has me stumped. Every sign shop I've ever seen that is closing, is selling off the equipment and supplies and not selling the actual business.

Because nobody will buy it?

 

[ams]

and if I sell, you will be amazed?

 

[John L]

There is one sign shop in my town that has 60 - 65 employees and $7+ million in sales a year. I've seen the figures. So it is possible to do.

But always, I will sell my business and you can all close yours.

Honestly, $7,000,000 for the amount of work you need to keep 65 people moving is low balling it. They got any euipment for sale?

 

[Pat Whatley]

They must be hiring Mosh's workforce

 

[astro8]

and if I sell, you will be amazed?

No, why would I? The numbers you stated add up.

If I was looking for something...and if it checked out, I'd seriously consider it.

 

[binki]

We tried to buy a number of businesses several years ago and when we did the due diligence we found out one or more of the following:

The owner wanted to stay on, AKA, give him half a mil and he keeps running things.
The owner needed money fast and didn't want to exit the business, just sell old equipment that didn't work so he could buy new.
The owner was stealing the cash payments out of the business but wanted to count them for valuation.
The owner was running personal expenses through the business but didn't want to count them for valuation.

On a rare occasion we found an owner that was retiring and the business had some value to it but it wasn't right for us. Otherwise most of these are scams of one sort or another.

 

[iSign]

Cocky has nothing to do with it, I am stating a fact. I am no better than any other sign professional. But I do know a business can be sold and not have to close.

you are a cocky little liar and a brat if you claim $500K sales & over 25% in your pocket... you are far too ignorant in your posts here for anyone to believe that fish tale... have another hit off the old pipe, dreamer boy...

 

[WildWestDesigns]

have another hit off the old pipe, dreamer boy...

Don't forget: "puff, puff, pass"