Valuing a Printing Business
When valuing a printing business, many factors should be considered. As operators know, a lot goes into a printing service company. More than ever before, a successful printing company requires precise management. Industry reports show that the industry is in decline today. This is mostly attributed to the digitization of our world. As more people and businesses communicate digitally, the demand for printing services declines. Despite this, printing businesses can be extremely competitive and profitable. By valuing a printing business, a business appraiser helps you understand the fair market value. It also identifies ways to maximize your printing business in this declining market.
While market multiples for printing businesses help determine value, there are other important factors. Peak Business Valuation, business appraiser, also considers value drivers for printing companies. Below we discuss both market multiples for printing businesses and value drivers.
Understanding the fair market value of a printing business is important. Whatever your goals are, this information can help you make a better decision. This may include selling or buying a printing company. As a business appraiser, Peak Business Valuation provides business appraisals for printing companies across the country. As part of a business valuation, we discuss key factors in valuing a printing business. Keep in mind the below factors are only a guide. For more specific information, schedule a consultation with Peak Business Valuation, business appraiser.
Market Multiples for a Printing Business
Below are average valuation multiples for printing businesses. A valuation expert uses multiples when determining a printing company’s value.
- EBITDA Multiple Average Range: 2.99x – 3.93x
- SDE Multiple Average Range: 2.60x – 3.26x
- Revenue Multiple Average Range: 0.39x – 0.90x
**Disclaimer: These multiples are for educational purposes only. As such, the information provided does not constitute valuation advice. These multiples do not represent the valuation opinion of Peak Business Valuation or its valuation professionals. Instead, seek the guidance and advice of a qualified business valuation professional about any matter in this article.
How to Value a Printing Business
A valuation expert uses a variety of business valuation approaches when valuing a printing business. Often cash flow multiples – SDE and EBITDA multiples are most applicable. Using their expertise, a business appraiser decides what methods and multiples for printing businesses apply to your business valuation.
Obtaining a business valuation for a printing company can help you understand what your printing company is worth. It also identifies ways you can increase the value of a printing business. This is helpful whether you are expanding, acquiring, or preparing to sell a printing company. If you are searching for a more extensive valuation, schedule a free consultation with Peak Business Valuation, business appraiser.
Key Value Drivers for Printing Businesses
Peak Business Valuation, business appraiser, values printing service companies and printing businesses regularly. Below are several key success factors a business appraiser looks at when valuing a printing business. These can help distinguish and increase the value of a printing company.
Adjust to Customer Demands and the Current Economy
Successful companies constantly adjust how to meet customer demand. Given how technology is changing the industry, this is vital. Top printing service companies have begun providing marketing consulting services to influence sales. Additionally, many offer other marketing services such as website hosting and design. Providing these services can help create a one-stop shop for all things marketing. This increases printing service needs and sales.
Shorten Production Cycles
Many top printing companies have moved to quicker turnaround projects. This may be due to the immediateness of technology. To compete with this aspect of technology, shortening turnaround has become popular. This has required printers to be updated with the most recent advances. It also requires the printing business to operate at optimal levels. So, while this goal may require investment, the increase in sales will increase value. Increased sales results in higher operating efficiency and growth rates. When valuing a printing business, both factors will lead to an increase in the value of a printing business. For additional questions, schedule a free consultation with Peak Business Valuation.
Expand Markets and Key Relationships
Establishing key relationships with top customers of printing services companies is paramount. In terms of sales volume, several customers stand out. These customers include marketing companies that specialize in direct mail marketing. Similarly, political groups during election season can also prove valuable. Establishing relationships with these groups using promotions can drive sales.
Additionally, some of the top printing services companies have relationships with manufacturers. Manufacturing markets tend to have heavy printing needs for packaging and shipping products. Having these relationships and being near these markets is a key value driver for a printing company. Having many high-volume clients can help increase the value of a printing company in a couple of ways. One of these ways is by decreasing risk. These high-volume clients provide consistent revenue patterns. Less risk tends to equate to higher revenue multiples. A business appraiser at Peak Business Valuation analyzes risk and customer diversification when valuing a printing business.
Seize Current Market Opportunities
Last, a top trait among successful printing businesses is a drive to seize opportunities. Printing services companies have many chances to increase revenue in the short term. Organizations often need to quickly disseminate information to the public. By paying attention, these opportunities can provide quick revenue growth solutions. Take election season for example. As candidates are preparing their messages, you can become a solution to them. Printing companies have chances like these often. This is why it is essential to watch the market and spot these opportunities.
One opportunity seized can provide extra cash. While consistently seizing opportunities can become a foundation for your business model. To increase the value of a printing business, focus on seizing many opportunities. Valuations analysts view consistent revenue growth as positive rather than revenue swings. So by stringing many seized opportunities together, you can increase growth and value.
There are many important considerations a business appraiser makes when valuing a printing business. Understanding the value of a printing company is important whether you are looking to buy, sell, or grow a printing service company. Obtaining a business valuation can help you understand the fair market value of a print shop. It can also identify chances to maximize the value of a printing company.
As a business appraiser, Peak Business Valuation values printing companies across the country. We are happy to answer any questions you have about valuing a printing business. You can reach out by scheduling your free consultation below.
Be sure to also check out our blog on Value Drivers for Printing Companies.
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