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Paula Fargo

5 Reasons to Sell a Sign Company Plus 6 Options

It’s all about your options.

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PHOTO: ISTOCKPHOTO

SELLING YOUR SIGNSHOP is like Donkey in Shrek – many layers to peel back and consider.

Let’s start with why you want to sell, and there can be as many reasons as there are owners.

  1. You feel like you’ve worked hard enough all these years and are ready to enjoy the fruits of your labor.
  2. You’ve noticed your interest and enthusiasm for the job has been waning and you don’t want your lack of motivation to negatively impact your employees.
  3. You or a family member got a bad health diagnosis, and you need to remove yourself from your work obligations and stresses.
  4. You built your company up to a profitable juggernaut and want to sell out while you are on top of your game.
  5. You don’t want to continue investing in the equipment you need to stay competitive.

So, what are your options? How can you sell a small, privately owned company that may or may not be particularly marketable? Here are a few ways:

  1. You have a family member or other valued employee working in the business who you’ve been grooming to take over.
  2. You belong to a franchise which is willing to work with you to find a buyer for your business.
  3. You know a local business broker who can list, market and try to sell your company for a fee.
  4. You have some competitors in your market to reach out to and discuss a buyout, merger or “tuck in.”
  5. You have heard about mergers and acquisitions companies in our print/sign/graphics space who can work with you to valuate, market and sell your shop.
  6. You’ve gotten letters from national franchise organizations discussing their “matchmaker” programs that help independent shop owners sell to new or existing franchisees.
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Each of these options has something to recommend as well as potential downfalls or risks.

And how do you want to be paid? This question is best answered by the leverage you have as an owner. If your company is financially healthy and profitable, with a long-term loyal staff, a wide variety of clients and updated equipment, you will have more bargaining power when it comes to payment options. If on the other hand your financials aren’t in good shape, you’ve struggled with employee turnover, have a high percentage of sales with just one or two large clients, and you haven’t been updating your equipment, you will likely find yourself at the mercy of the buyer’s terms.

These considerations are just the tip of the iceberg when it comes to selling your business. It’s not like driving your shop to the local SignShopMax for a quick estimate and a check to be cut for the bluebook value. Each combination of answers will point to a different path to take.

In the upcoming column, I’ll look at the pros and cons of each of the selling options, as well as possible deal structure/financing.

This is the second in a series of columns by Paula Fargo. Click here to read the first column, “Why I Sold My Print and Sign Company.”

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