Editor’s Note: Three APDSP members with personal experience in selling and buying reprographics shops shared many of their experiences during an APDSP webinar on May 8. If you missed it, you can listen and watch the webinar online by logging into the Member Center and going to the Resources tab. You can also find the full written transcript of the webinar at the Resources tab. Below are six key tips the speakers made:
1) Start the Process Years Before You Want to Sell
Bob Roperti, Jiffy Reprographics (who sold his firm to a commercial printer): “Some of the advanced preparation for the sale really started a couple of years beforehand. The building needed a good painting, and certainly so many work areas needed a face lift. Not only did we declutter, but we invited somebody else in to help us do the staging and decorating. It was an important part of getting a more professional look before we went to market with a company.”
2) Clean Up Your Shop
Roperti: “The atmosphere was important as well. Lighting, background music, the day-to-day cleanliness. We went through and changed our messaging on the answering machine as well as in the reception area, so that we were consistent, regardless of who answered the phone. That the basic information was communicated to whoever was at the other end of the line. We went as far as the parking lot and reorganized so that it had better use of access and someone became responsible for cleaning up out there as well.”
3) Consider Selling to a Company Outside of Repro
David Fox, Fox Blueprinting (who sold his firm to copier/plotter equipment supplier): “Like Bob said, it was enlightening to me in terms of the reality that a repro shop, an AEC repro shop, is not interested in buying another AEC repro shop, because we're all in the same boat. You know, our industry is changing significantly, so it does make sense that somebody who is a peripheral business to your business is actually going to benefit more than a comparable business. …. if you do have interest in selling your business, look for businesses that have a complementary overlap to your business and would benefit from what you do, because they are not services that they are currently providing. That will, you're looking for ways to strengthen another business. Sameness just isn't going to make sense in this new economy.”
4) Be Honest About Your Intentions After the Sale
Doug Magid, BluEdge (whose company has acquired several other repro firms): “We want to know what the leadership wants to do. Typically the ownership is the leadership, but whoever is running the company, what are their plans post-acquisition? Here, you know, we just want to be able to, there's no right or wrong answer, we just want to be able to plan for the future and know what we're getting. We've had owners, you know, tell us that they want to get out, retire, and move away, and that's fine with us. You know, we've had them stay on for a month in a transition, and then move on. That worked great. We've also had it work out great where we've had owners stay over 10 years and retire with us. That's happening shortly with one of our former acquisitions, and that worked out great, too. What we really just want is honesty and not saying what you think we want to hear, but say what your plans really are, and then we can kind of work it out together.”
5) Consider Asking Key Employees and Clients to Sign Contracts
Magid: “To the extent that key people are staying on board and to the extent that there are contracts in place, I know that may not be the case in a lot of companies, but some companies were, their FM business, their MPS business is a big part of their business. There are contracts in place. You know, those are things which are important and help us value the business higher because we're more confident that we're going to hold onto the business. Whatever happens a couple years or more out is up to us, really, and can we, the kind of service we provide, but we want to at least know that the clients are not going to jump ship during a transition for any reason.”
6) Be Honest About Problems
Magid: “Look, we realize every business, ours included, has some warts, and as long as we know what we're getting into, we think we can generally deal with the issues that are going to come up, again especially if it's within our geography, then we're really confident we can work out and iron out any issues in the business…. The biggest turn-off is really easy for me to say, and what it is is stories and numbers that just really seem to us to be slanted at best, or at worst potentially untrue…. I would say, by far, that is what has led us to drop deals and walk away, because quite honestly, if there's not trust, it's just a lot, you know, there will be other opportunities. It's just a lot easier for us to walk away.”
You can view/listen to the webinar, and download the complete written transcript, in the APDSP Member Center.