Business for Sale, Would I buy It? | Commercial Signage & Graphic Design

In this version of “Would I Buy This Business”, we have commercial signage and experiential graphic design, award-winning. I feel like maybe they ran out of characters for that headline there. So commercial signage, graphic design. If we look at the stats, it’s just over $2,000,000 [2,002,787], in gross revenue. [339,250] in cash flow and 625,000 asking price. So right off the bat, what I don’t like about it with 2 million in revenue, they’re only generating $339,000 in cash flow. So doing the math, that’s about 17, 16%, which is pretty low. Usually, sign businesses do pretty well. I would have expected the margin to be at least twenty-five if not 30% instead of about half that. So I don’t know why they’re not doing better. It says you’ve seen their branding work all over the country, from bustling shopping centers to prominent commercial landmarks. Not if they’re only doing 2 million in revenue, I doubt that I’ve seen that much of their work. It says nationally recognized and award-winning 25-year-old business portfolio of work unmatched by any other. Unique business model gives it the ability to conduct the same quality of work anywhere in the country. The organization runs out of a 2500-square-foot office with five employees excluding the owner who operates as a manager. Three are full-time employees, two are part-time. Yeah, I don’t know. I just think there are better sign shops to buy, at least from a margin standpoint. Or maybe there’s an opportunity here to fix whatever it is that’s causing them to have such a low profit for the volume of business they’re doing. I would think if you’re award-winning and nationally recognized, you’d be able to charge a premium and if anything, have a higher profit margin than average, not lower. So I’m not sure what’s going on here. Sign shops can be good businesses and can be very profitable, so it might be worth a look to find out what’s going on. But if all these numbers turn out to be accurate and there’s no obvious fix on why they’re not doing better, even though the price is pretty reasonable. I just think that you can do better buying a better business with better margins than what this one appears to be.

More about this series, CapForge’s owner and founder gives us a little behind-the-scenes on what a good or bad business would be. CapForge helps tons of clients either buy or sell business and Matt was a business broker before starting CapForge. Let’s look at some of these businesses up for sale and see if Matt would be interested in buying them.