Buying a framing business

[muffinski]

Has anyone had any experience of buying an existing framing business?

[caro]

No, I set up from scratch, what's your angle? Writing a book, looking for one to buy, selling ?
...

[muffinski]

Potential for buying one, would be good to hear peoples experience of buying an existing framing business.

[Glimpse]

I've never bought one, but I recently set one up from scratch. My thoughts: Unless it comes with contracts, what exactly are you buying?
A high street framer might have a few regular customers, but I wouldn't put any monetary value on them.
"Good will" goes out of the door when the previous owner leaves, unless you're taking on his staff. Business name and reputation... Hmmm... It might have value; it might be a noose around your neck.
A recent survey revealed that the average person gets something framed only once ever 18.6 years*, so customer loyalty isn't something I'd pay anything for.
So basically, I'd be totting up the resale value of all the equipment on the second-hand market, and I wouldn't want to pay much more than that.
I wouldn't pay much for stock - 'stock' is generally another word for "leftover crap that you've hoarded on the off-chance that someone wants a 6x4 framing in a particular moulding that you *think* you have a couple of metres of, but you've actually got about a metre, and half of that has been damaged in storage."

* I made this up.

[Jamesnkr]

Glimpse just beat me to it.

View the stock as worthless as it's the stuff he hasn't been able to sell, and budget to spend £1000 on repairs to the equipment you buy too.

The one thing that might be worth something is that the shop is already fitted out.

Customer list? Don't forget all the people who will *never* use that flippin' framer again.

[Graysalchemy]

You don't see very many one man band businesses being sold. If you want to sell a business you need to make it successful without you which unless you have divorced yourself from the business and have a level of middle management its not something you are going to achieve with a small business.

As for stock and equipment I think it has been eloquently summed up above. Even if it had a fantastic customer list, customers both private and commercial to to use you because of you the owner.

Also remember that taking on a lease is a liability and not an asset and taking one on as part of a business with 3 yrs still to run for arguments sake is risky if you are unable to make a success of the business 12 months down the line.

It would be better to have your own lease in with favorable breakouts factored in at the start.

[Jamesnkr]

You don't see very many one man band businesses being BOUGHT.

Fixed it for you....

[prospero]

I would reiterate Glimpse's comments. You are buying a bunch of secondhand equipment plus a lot of stock that may or may not appeal to you. If the business is in a prime location then that may have some value, but customer lists - not worth a great deal. Different matter if it's a gallery selling originals and prints. In that case a customer list may be very useful, but pure framing not a lot. The business is essentially the framer. Different framer, different business.

[Graysalchemy]

Thanks James.

My point was we say plenty of businesses for sale a lot with Great potential for some one prepared to put some effort in. I don't think I have seen one sold as a going concern in all my years in this industry, most on here end up being sold as individual machinery sales. I had thousands of pounds worth of old stock when I moved last year and I could even give it away, I gave it to a guy as firewood, thats all second hand moulding is good for.

[Glimpse]

Another thing that I found when setting up my business is that most framers, whether good bad or indifferent, have a 'bad' reputation. Or to be more precise, 'expensive'.

I set up in a small town that already has an existing framer (well, a gallery that frames). I've had an awful lot of customers who tell me they've had frames off him but he was ridiculously expensive... A typical example would be "he wanted 80 quid to frame an A2 poster... Robbin' b*****d!"

When I ask when this was, they tell me it was around 10 years ago...

Well, his £80 probably wasn't very expensive for a bespoke frame-up, and due to that wonderful thing we call inflation, £80 is probably around £100 in today's money, but they still expect me to undercut the "robbin' b******d" down the road!

By and large, the general public have very little idea of the cost involved in bespoke framing, so when they do get something framed, they very rarely think we represent excellent value!

So the best reputation I think we can hope to achieve would be "very good, but bloody expensive"!!

[markw]

Your question is a bit open ended as there are so many factors involved. The first few I would ask you. what experience do you have in framing - and in business?. As a novice expecting to buy an existing business my answer would be NO. If you have experience of the trade then I would think you can answer the question yourself.
The other replies have set out some fair assumptions - but you would need to look at the books - a busy reliable income would indicate that the business is well located and that is one of the most difficult things to achieve when starting from scratch. Leases can be a nightmare and would need very careful consideration but Ive never heard of a lease that allows you to dip your toes in the water and withdraw them if the dream goes bad. It takes a certain amount of determination to survive in business and sometimes you have to take an educated risk that your ambitions WILL be achieved.

[Graysalchemy]

My lease has a break out every year on a 3 year lease and I know of leases which have break outs every 3 months.

[prospero]

Another problem with leases is that if you inherit one that has a short time to go you don't know what is going to happen. The landlord may decide to double the rent or not renew it. If it is a long lease you are stuck with it.

[muffinski]

You have given me some very good food for thought. I will be accessing the books/paperwork for the business in due course. Lease is not an issue I think it rolls on a month by month basis. Your thoughts on stock and customer list is interesting.

[IFGL]

Having started three retail shops from scratch I can say it takes a while to get established, if I take on any more I will be looking to buy an already established business, I have looked at a few out of interest, non so far have met or come close to my expectations.

[Not your average framer]

Empty shops and secondhand equipment aren't difficult to find, why would you want to buy someone else's business, when you can start from scratch for so much less money!

Sure, the first couple of years might not be easy, but at least your customers won't be comparing you with the previous owner.

[prospero]

Another thing. You aren't only buying the businesses assets you are also buying their liabilities. Which they will most likely not advertise too much.

I've heard tales of disgruntled customers appearing years after the fact to complain to the new management. I've even heard of people going to framers who simply took over an existing framer's premises - not the business itself and demand refunds/compo, threaten lawsuits. Nowt so queer as folk.

So when you buy 'Goodwill' don't forget there may be a lot of 'Illwill' lurking unseen.

[gesso]

YGM

[GeoSpectrum]

It might be different if the buisness has an online presence, not just a website but an established ecommerce site which generates a proven proportion of the business turnover. I suspect that might have some value over and above the cost of developing a website.

[Abacus]

Contrary to the previous replies, I bought my picture framing business 6 years ago and paid quite a lot of money for it.

The previous owner stayed on for 3 months to hand over and show me the ropes. I would have been lost without him.
The two other members of staff (both very experienced) are still with me. This means I can take time off and have holidays.
The day after I took over £1000 hit my bank account and I was able to keep paying my mortgage! I've received a good salary and decent dividends ever since.
The goodwill I bought means that we get many many many returning customers, I've done minimal advertising in the last 6 years and yet we are continuing to grow.
50% of the stock I bought was good recent stuff, 50% crap
The machinery I bought was servisable and although I've replaced most of the big items, this was out of choice and I've kept the old stuff as backups.

I set up a new company with a similar name to the old one, bought only the assets and goodwill. After a year me predecessor closed down his company and any liabilities stayed with him.

The business I bought had been here for 31 years, so the previous owner had been doing something right!

HTH