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Five-Star Full-Service Signage Business in NorCal for Sale

$722,443 Sales as of June 2022 with 31% PROFIT

Specifications

 Price:
$450,000
Revenue:
$650,000 (Projected 2022)
Cash Flow:
$200,000 (Projected 2022)
Location:
San Francisco Bay Area
Service Area:
San Francisco Bay Area
 Profit Margin:
25%
 Employees:
3 Full Time Employees
Includes 1 Owner
Reason for Sale:
The Sellers
are Retiring
Goodwill: 30 Yr. Reputation, 4.9 Star Reviews, cross-trained experienced staff
Year Established:  Early 1990s
Services:  Full-Service professional signage company with design, printing, manufacturing and installation under one roof
Equipment:  $51K of equipment included in sale
Licenses Held:  C61/D42 non-electrical sign contractor license and C45 electrical sign contractor license
Revenue Mix:  98% Commercial & 2% Consumer; 95% New Signage & 5% Refurbishment
Facility  2,451 sq. ft. with 76% used for manufacturing and 24% for office space.
Lease:  Lease ends 12/31/2024, monthly lease $4,030.41 + CAM
Employees:  3 FT Employees + 1 FT Owner
Major Software Used:  Corel Draw, LXi, VersaWorks RIP, QuickBooks, MS Office, Adobe Illustrator and Acrobat

This well-recognized signage business has been serving the San Francisco Bay Area for over 30 years, beginning with the mission to meet the signage product demand during the economic boom of Silicon Valley. Since inception the business has proven itself in the marketplace, building a reputation for quality of work, performance, and integrity.

The business has a 5-star rating on Google. This success reflects the enthusiasm, professionalism, and commitment to customer service by the owners and the staff. The staff is very stable and cross-trained with many years of experience in the industry.

The business designs, manufactures, installs and refurbishes a wide variety of signs and graphics — ranging from digital prints and panel signs to large internally illuminated monument signs.

Seller currently holds both electrical (C45) and non-electrical (C61/D42) sign contractor licenses. C61/D42 will be required to provide installation service; C45 is not required if the buyer will not produce electrical sign.

The business is also a member of Signworld Business Alliance that provides customer referrals from an exclusive geographic area (this membership will need to be renewed by the new owner if desired).

Commercial clients consist of 98% of the business’s client base, of which 60% are recurring clients. There is no customer concentration.

There are three full-time employees covering the full sign-making process from sales, design, to manufacturing and installation. The owner is responsible for general administration, HR, and assists with sales and accounting as needed. An absentee owner spends less than 10 hours in the business each week to manage the business’s accounting and basic office operations.

Value Proposition

  • •30+ Year Establishment
  • 5 Star Customer Review
  • Well Diversified Signage Products
  • No Customer Concentration
  • Experienced Staff with Cross Training
  • Projected 25-30% Profit Margin in 2022 with Strong Recovery
  • As of the end of 9/2022, Revenue in pipeline totaled $191,856
  • Clean Operation with Stable Staff
  • C61/D42 contractor license required for installation

Revenue Breakdown

Financial Highlights

  • Asking Price: $450,000 with 2.25x SDE multiple
  • 2022 Sales is likely to reach their best performance in history.
  • Projected EBITDA/SDE for 2022 is likely to be over $200K
  • Annualized 2022 EBITDA/SDE ($166,788) is understated given certain COGS already booked in P&L without revenue
  • Profit margin for 2022 will likely be 25-30%.
  • $51K worth of FF&E included in the sale.
  • Clean separation of the owners’ personal expenses from the business operation.

Cashflow Analysis

Asking Price

The asking price is determined using a cash flow methodology. Cash flow is the sum of net income from the business plus any non-cash expenses, non-recurring items and any seller’s personal expenses. A multi-factor multiple is applied to the cash flow based on the condition of the business.

For this business, the annualized cash flow as of 2022 is applied. The multiple applied in this case is 2.25x.

Funding Example

Purchase Price: $450,000

10% Buyer Down Payment

$45,000

Buyer’s Equity

90% Bank Loan

$405,000

10-Yearterm at a rate of 6.50% = Monthly loan payment of $4,599

  • Cash Flow (TTM June 2022): $200,000
  • Annual Payment to Bank: $55,184
  • Net Profit (After loan payment to Bank and assumed officer salary of $50,000): $94,816

* Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.

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