Printer/Copier Sales & Service Business
A subscription business, where customers pay for a service on a regular basis, is a great business. That is what this business has. The business sells and services office printers/copiers. They make a profit on the sale of the copier and ongoing revenues from the service contracts that customers buy.
All the service contracts are based on “click charges”. These are charges based on the number of black or color pages printed each month. There is a minimum charge that includes a contracted number of black and color pages. If the actual number of pages is above this figure, there is an additional charge. The number of pages is read automatically over an Internet connection to the copier.
Due to its excellent customer service and relationships, the business has grown every year since it was started. It has about 350 service contracts that will be up for renewal from 2021 – 2025. It is typical that a customer buys or leases a new copier when their current lease is up for renewal. This business has a renewal rate around 90%.
This is a very profitable business with excellent cash flow. The business operates out of an office that it leases for $900/month on a month-to-month lease. It has little ongoing capital expenditures or accounts receivable. Most copiers are sold as a lease and the leasing companies pay promptly. Service contracts are billed ahead; the average accounts receivable is around $10,000 to $15,000.
The owner is selling to plan for his retirement. He is the primary salesperson in the business and is willing to stay on with a buyer for a few years for an orderly transition.
A qualified buyer should be able to obtain SBA financing with 10% down.