Printshop for Sale

A Virginia Franchise owner wrote to say that she was pleasantly surprised on reading our new book “Print Shop For Sale.” She discovered that her business appears to be worth even more than she had thought. Here are the details.

She started her printing business in 1983 and has had steady, although unspectacular, growth over the past 24 years. In the past three years, sales have been growing at about 5% per year and they stood at $950,000 in 2006. Her owner’s compensation percentage has been climbing as she has worked to trim costs in all areas of the business. Through this hard work, she has improved it from 13% in 2003 to 18% in 2006. When I spoke with her in late 2003, she asked me to guesstimate the approximate value of her business. Based on sales of about $800,000 and 13% Net Owner’s Compensation, I put the value at about $300,000 at that time.

I remember her being pretty upset with this value, because she wanted to retire by 2008 or 2009 and she felt that she needed a lot more than $300,000 from her business. I indicated that her best bet to raise the business value was to improve the profitability while continuing to grow the sales. Well, that is what she has done and it has paid off in spades. Based on the 2006 numbers of $950,000 sales and 18% Net Owner’s Compensation, her business value came out to be $570,000, or almost double what it was in 2003. In addition to the increased value of the business, she is also enjoying a lot of extra profit each year. In 2006, she made $171,000 Net Owner’s Compensation (18% of $950,000) vs. $104,000 in 2003 (13% of $800,000).

Needless to say, she is very happy with the improved profitability and plans to continue to work at building the business value for another couple of years. Her new goal is to get the sales up another 20% or so and get Net Owner’s Compensation into the 20% range. Based on her calculation, using the CD that’s available with the book, she figures that her business value will increase another $200,000 to about $770,000. Then, maybe she’ll retire or, maybe she’ll keep building value. That’s a nice decision to have to make.




True Stories

Value Lower Than Expected
Author Larry Hunt explains why so many printing businesses end up being valued so much lower than owners expect!
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How to contact the authors:John Stewart, Q.P. Consulting, Inc.
2110 S. Dairy Road, W.
Melbourne, FL 32904
FAX 321-727-2166

Larry Hunt, Larry Hunt Publications, Inc.
P.O. Box 6082,
Palm Harbor, FL 34684
FAX 813-854-4005