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Listing ID: 48165 | Office Identifier: MD165 Midtown Manhattan West Map Print Office Equipment Wholesaler Listing Details BBP Industry ID: 1611 NAICS: 423 Industry Description : Merchant Wholesalers, Durable Goods Title: 000- Office Equipment Supplier Business Name : Listed Price: $1,200,000 Total Sales : $2,241,790 Seller's Discretionary Earnings: $300,431 Inventory: $70,000 (Included in listed price) Financing / Terms: TBD Reason for Sale: Retirement Training & Support: The owner is willing to train & support for a reasonable period of time. Executive Summary Business Description : The business sells, leases, and rents copiers, printers, and fax machines to mainly small businesses, medium sized businesses, and professional service providers such as doctors, lawyers, architects, engineers, and real estate offices. Any business with an office is a candidate for the company’s products and services. A typical customer will be leased, sold, or rented a copy machine along with a fax machine and printer. That customer will than buy into a service maintenance contract that will enable the company to service the customer over a long period of time, particularly for the purpose of servicing the machines. Moreover, the customer will buy supplies such as ink cartridges, toners, and paper goods from the company which creates a further residual income effect. These relationships can last from 2 to 5 years or longer, so long as the customer continues to lease or use the copier. Even though the business benefits from many customer relationships which produce residual income for the business, it is important to the note, that the owner must procure new customers on an ongoing basis to increase and stabilize the business’s cash flow since you never know when past customers stop using Canon products or do not have a need for a copier, fax, or print machine. The current customer was built by word of mouth referral marketing, direct mailings, and the perpetual management of current customers for the purpose of selling them service contracts and supplies. The business currently has 1,000 customers and sends 10,000 mailing pieces 6 months out of the year. The company is operated 5 days per week on a 9am to 5p.m. schedule by the current owner who is responsible for the overall management of the business and customer relationships. The company employs a total of 9 employees which includes 4 technicians, 4 office administrative people and 1 salesperson. The technicians are responsible for fixing and installing machines. The administrators are collectively responsible for service dispatching, accounts receivables, service contract billings, answering phones, and other secretarial functions. The one sales person who is employed has been with the company over 10 years and gets paid $100,000 which includes his salary and commissions earned. The trend of sales declined from 2005 to 2006 but has been steady from 2006 to 2007. Also, it is important to note that Canon is not a franchisor nor a licensee of its products. The owner’s relationship with Canon is strictly a supplier relationship under a perpetual contract so long as the owner receives updated product training and knowledge. The owner is free to sell other branded or unbranded products and is not restricted by product or territory. At the moment, the owner is one of 13 Canon dealers in the New York City Metro area. The company is considered one of seven “Office Product Dealers” as opposed to the other 6 “Full Line Dealers” that exist. The difference lies in the number of Canon products that can be sold. To become a “Full Line Dealer,” the owner would have to go through a specific training process and be willing to invest the money in the selling products he currently does not sell. The sale includes the business’s goodwill, customer lists, customer relationships, inventory, accounts receivables, accounts payables, and all furniture, fixture, equipment. The accounts receivables range from $50,000 to $100,000. The accounts payables ranges from $ 30,000 to $65,000. The inventory at cost value is estimated from $50,000 to $70,000. The business is estimated to have 1,000 customers. Most of the receivables can be collected within 30 days and there are no receivables that exist more than 45 days. Historical Summary: The business was started and established in 1991 by the owner, who had mainly a background in corporate management. The company operated from a location a few blocks away from its current location for close to 10 years before moving to its current location 6 years ago. Competition: The business faces competition from Xerox, IBM, and other office equipment dealers particularly on the issue of price. Further, there are 12 other Canon Dealers in the New York City Metro area. To overcome these obstacles, a new owner must be customer service oriented and must be willing to market the company. Potential for Growth : The business’s profit and continuing success revolves on the ability to procure new customers for the copiers, fax machines and printers. This procurement of new customers leads to further residual income which stems from the sale of service contracts and supplies. Hence, growth strategies must be centered around the procurement of new customers. The number one growth strategy available to a new owner is the development of sales force which focuses on procuring new customers. Second, the new owner himself should focus on bringing in new business using strategies such as networking, participation in trade shows, and participation in key industry associations that can lead to new business. Operations Year Established: 1991 Year of Last Acquisition: 1991 Form of Ownership: S Corporation Days & Hours of Operation : Mon.-Fri. 9am-5pm Number of Employees : PT / 9 FT Location Relocatable: YES Type of Location Commercial Square Footage 3000 Facilities / Location Description 3,000 square foot space which includes 1,500 square foot office space (upstairs) and 1,500 basement warehouse space. On average, the business carries on average $50,000 to $70,000 worth of inventory, most of which is supply inventory. Monthly Rent: $6,500 Option: N/A Terms and Conditions: N/A Security on Lease : $19,500
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