If you are a commercial printing company owner, you have probably been listening for a very long time that print is dead. In fact, who still prints photographs or keep an analog camera at home?
In the past years, marketers from all over the world has focused their companies in digital advertising in order to reach prospects, as they stopped spending money with printing.
However, according to U.S. Commerce Department, print may not be as dead as we thought. In the last months of 2015, there have been a 3,5% growth in commercial printing companies, and experts are predicting that next few years are going to be even better.
So if you own a business like this, you better hold your breath. Maybe it’s not the right moment to sell your printing company, but maybe it is. It all depends on what has been your growth rate in the past years.
Check the next topics and find out if it is the best time to sell your business.
What is your Commercial Printing Company worth?
First, you have to evaluate your commercial printing company’s finances over the last few years. If your business has seen rising financials and growth in a recent past, it may be the right time for you to consider selling. If not, if your business has been stagnant or tough, the best choice is to wait a little bit more until things get better and growing.
But in order to look at your financials, you have to gather all numbers you can find and compile them into a large and complete report. Take a look at the following metrics and make sure you have all the information you need:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Printing Company business worth more?
Now you know exactly what your commercial printing company is valued, you can begin planning on how to make it worth even more. In order to do that, you need to look at your own business and find out which are the differentials that make your company be more valuable.
Web presence, for example, is essential nowadays, but it’s not every commercial printing shop that has it.
How is your equipment quality? We are aware that new technology is released all the time in this industry, so it may be hard to always have up-to-date machines, but updating your own equipment every two years is a good idea.
Keep that in mind: potential buyers are more interested in businesses which have new technology, because it means they won’t have to change the equipment in a short period of time, and they would probably pay more.
So if you think is better for you to invest some money in the machines before selling your commercial printing company, go for it.
In your business, it’s really important to adapt your company to the trends as much as possible, so that your business is always modernized and able to stay profitable. Especially if we take into consideration that print has been struggling in the past few years, so it was more necessary than ever to go after new possibilities.
Make sure all these metrics are well answered before you set your asking price:
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What does the average Printing Company business sell for?
Since 2005, there have been almost 500 commercial printing company sales. Experts say that the most probable reason for this stampede is print low popularity, as most of people stopped printing photographs.
That’s also must be the reason for the average multiple is not that big, but big enough if we take into account that print was considered dead until few months ago.
Average sales price is $458k and the total transaction value over the past ten years was more than $253 million.
What is the most frequent deal size?
Most frequent deal size is $200k, a little bit less than half of average sales price.
That usually happens because most of commercial printing companies that were sold in the past decade were negotiated for less than $250k, as we can see in the chart.
In 2015, there have been 30 sales less than $250k, 24 sales between $250k and $500k, 7 sales between $500k and $1 million, 4 sales between $1 million and $2 million and 5 sales between $2 million and $10 million.
Is the Commercial Printing Company market getting bigger?
Yes. As we said in the beginning of this article, for the first time in years, commercial printing companies are watching the industry grow.
According to U.S. Commerce Department, it’s expected a 3% growth for the next couple of years, and if you take a look into the chart you will that this numbers can be seen in 2015, which was the best year over the past decade.
At least, more companies have been sold in this period.
Are bigger businesses worth more?
Yes, usually the bigger the business the higher are the investments that were made. So they probably worth more than smaller companies.
Look at 2015 numbers for example: commercial printing companies sold for less than $250k had a multiple of 1.68, while businesses sold for between $500k and $1 million had a higher profit, with a multiple of 2.04.
What states have the most Printing Company business deals?
Arizona, California, Connecticut, Florida, North Carolina, Tennessee and Texas are the best states where you can find good deals.
Sometimes, however, you can overcome the low number of deals with investors or competitors looking to enter a specific new area, and get lucky with an offer.
Why would you sell in the first place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How long will it take to sell your business?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
What is the process of selling your business?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who will buy your business?
If you are wondering about the buyers that can be interested in your Commercial Printing Company, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the printing industry it may likely be a person who already had a store in the field.
Everyone thought that print was dead, but in the end of 2015 there has been a growth for the first time in years among commercial printing companies. Now it’s expected even more growth in this industry and if you were thinking on selling your business, you better think again or at least recalculate your asking price.
You can profit more from your business sale if you know exactly how to value your commercial printing company. So if you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today! Leave your comments on any doubts or feedback, we are glad to hear your thoughts!