Sale of a Copier Business...

[Oystercopy]

Hey folks,

I am considering, after 25 years, letting the company go to someone younger and with more energy. I have built the company into a profitable entity, but can't do it forever.

I would like to know, how have other guys dealt with this scenario? Better to sell to another technician (like myself) or to sell out to the next largest company? Did you handle it through a business broker, or
just go it alone?

Thank you sincerely for all replies,
OC

[qbert69]

Hey folks,

I am considering, after 25 years, letting the company go to someone younger and with more energy. I have built the company into a profitable entity, but can't do it forever.

I would like to know, how have other guys dealt with this scenario? Better to sell to another technician (like myself) or to sell out to the next largest company? Did you handle it through a business broker, or
just go it alone?

Thank you sincerely for all replies,
OC

Definitely sell to someone who has business savvy & is not going to hang your employees out to dry!!!....employees are the #1 asset of the company as they already know the customer base!!!

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[SalesServiceGuy]

There might be another office dealer in your area looking to expand their base of customers.

It is far less costly for you to reach out to potential buyers than via a 3rd party broker.

If you get any interest, you need to get the potential buyer to sign a Non Disclosure agreement.

Expect to get a lot of detailed Q&A about your company's last audited statements.

If you try to sell your business in a hurry expect low ball prices. You need to plan two years ahead to find the right buyer at the right price.

Your business is only worth its monthly recurring gross and net revenue.

Your parts inventory and toner inventory will get pennies on the dollar.

If you have current, new unboxed copiers in stock, you might get some value for those.

Expect a structured payout of maybe 50% now, 25% six months later and 25% one year later.

Expect a couple of $k worth of legal fees.

Expect to sign a non compete clause to keep you from coming back into the business for 5+ years.

[copyman]

Better to sell to another tech. Even if you hold like half the note for a few years. *Make sure to get at least half the $$ up front. Agree to stay on for a few months to introduce to customers, etc. Perhaps stay on board longer with pay to help run company etc, or run company for an investor.
There are all kind of options to avoid selling to a big company and use as last resort only. A lot of my accounts have become like friends over the last 20 yrs I've had my own business, hate to throw them to the big company sharks!

Big companies will want to pay you per account not what your business is really worth after years of building it.
It is a great oppertuinty for a tech tired of working making big companies rich to have their own profitable, turn key business on day one!

I will be doing the same thing selling my business in next year or two so will monitor this thread closely.

Best of luck!

[copier tech]

Hey folks,

I am considering, after 25 years, letting the company go to someone younger and with more energy. I have built the company into a profitable entity, but can't do it forever.

I would like to know, how have other guys dealt with this scenario? Better to sell to another technician (like myself) or to sell out to the next largest company? Did you handle it through a business broker, or
just go it alone?

Thank you sincerely for all replies,
OC

Is there enough profit in the company to take on a business partner, another engineer for example so you can take a back seat but still stay in control?

[copyman]

Is there enough profit in the company to take on a business partner, another engineer for example so you can take a back seat but still stay in control?

Another good option!

[Oystercopy]

Thanks for the replies... NO, I'm definitely not interested in taking on a partner and expanding the business. The only way I would have done that was with a seasoned salesperson, and I tried that several times but they all flaked out for one (inexplicable) reason or another. That's the reason I've never taken on a salesperson to grow the business further, because they're all cheats/liars and cannot be held accountable for ANYTHING..LOL. I guess I could consider selling out to another dealer but they're older as well and trying to sell their businesses, just like me. I was offered an opportunity to buy another copier business recently, but the price was completely out of line with the revenue. When I inquired why this was, there was "CRICKETS".... no response...hmmm... makes you wonder. I'm not going to get into specifics, but the business is very profitable under my diligent care. Translating that to another owner might be tricky; especially if they were not business-savvy to begin with. And God knows, many of the techs I've met in my life have one addiction problem or another (mostly alcohol). so not sure I can trust them either... dang!
OC

[qbert69]

Thanks for the replies... NO, I'm definitely not interested in taking on a partner and expanding the business. The only way I would have done that was with a seasoned salesperson, and I tried that several times but they all flaked out for one (inexplicable) reason or another. That's the reason I've never taken on a salesperson to grow the business further, because they're all cheats/liars and cannot be held accountable for ANYTHING..LOL. I guess I could consider selling out to another dealer but they're older as well and trying to sell their businesses, just like me. I was offered an opportunity to buy another copier business recently, but the price was completely out of line with the revenue. When I inquired why this was, there was "CRICKETS".... no response...hmmm... makes you wonder. I'm not going to get into specifics, but the business is very profitable under my diligent care. Translating that to another owner might be tricky; especially if they were not business-savvy to begin with. And God knows, many of the techs I've met in my life have one addiction problem or another (mostly alcohol). so not sure I can trust them either... dang!
OC

Spot on with the salesman as a partner aspect!!! When our owners sold to a larger company, we had a salesman that quit, went to a competitor company & took the client list with him!!! Prior to that happening, he wanted to buy the company but his financial background didn't check out. Needless to say, I didn't have much respect for him after that!!!

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[copyman]

Thanks for the replies... NO, I'm definitely not interested in taking on a partner and expanding the business. The only way I would have done that was with a seasoned salesperson, and I tried that several times but they all flaked out for one (inexplicable) reason or another. That's the reason I've never taken on a salesperson to grow the business further, because they're all cheats/liars and cannot be held accountable for ANYTHING..LOL. I guess I could consider selling out to another dealer but they're older as well and trying to sell their businesses, just like me. I was offered an opportunity to buy another copier business recently, but the price was completely out of line with the revenue. When I inquired why this was, there was "CRICKETS".... no response...hmmm... makes you wonder. I'm not going to get into specifics, but the business is very profitable under my diligent care. Translating that to another owner might be tricky; especially if they were not business-savvy to begin with. And God knows, many of the techs I've met in my life have one addiction problem or another (mostly alcohol). so not sure I can trust them either... dang!
OC

Same reason I never hired a salesperson. I always regretted it because I know it would of took my biz to a new level, BUT after I thought about it you are right copier salespeople are cut throat, lieing bastards! Put them right there with car salepeople, maybe worse!

Not sure it applies to copier industry but I heard there is a formula they use to value a business, something like 2.5 times the yearly gross or maybe the net profit. Maybe someone else has heard of this?

Another scenario I thought of with selling my biz was a few salespeople buy the business hire a tech and grow the business from a nice solid base. Or pay me to stay on for a while during transition. Something like that would work for me.

[SalesServiceGuy]

The cold hard reality about selling your copier business is that it only worth the value of its monthly recurring revenue generated by cost per copy meter reads.

Hopefully, you saved along the way to fund your retirement because very few dealers end up with a pot of gold for their life's work. Retirement is more about not having to do the daily grind anymore of fixing copiers in an increasingly complicated technology industry.