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Description

SOLD! ‘Q1 2019

Successful Boutique Web and Creative Design Agency in the Bay Area, –
Strong Reputation and Following!
San Francisco, CA – (San Francisco County)
Zip Code – 94107

  • Asking Price: $150,000
  • Gross Income: $212,550
  • Cash Flow: $31,189
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Real Estate: N/A
  • Established: 1991
  • Employees: 0

 

Business Description

Successful custom web design agency in San Francisco, operating for 15 years! – The business has over 60 past and current clients. It specializes in project-based client service for designing and building websites. These range from next-generation upgrades of current sites to building new sites from scratch.

Services include building websites from scratch, upgrading existing sites, hosting and domain registration services, and creating SEO and social media solutions for clients. The agency focuses on developing lasting client relationships and tailored custom solutions for each client, rather than using templates or outsourcing.

Development is done primarily through contractors. By keeping overhead low and charging highly competitive prices for professional quality work, the business is able to compete with agencies that hire expensive employees to do in-house development.

The current owner is overwhelmed since he runs his primary business and this agency on the side. He has more leads than he can manage and has to turn down work due to a lack of development resources. A new owner could capitalize on the company’s reputation and convert the daily leads instead of turning them away. The agency has a strong online presence and reputation and the majority of the leads come through their website.

 

Detailed Information

  • Inventory: None
  • Real Estate: None
  • Furniture, Fixtures, & Equipment (FF&E): Included in asking price
  • Facilities: N/A
  • Competition: There are competitors, but this company has strong brand recognition in the area
  • Growth & Expansion: Currently spending money on advertising, about $1k per month on SEO. The best way to grow is to bring in more developers and capitalize on the leads they generate every day
  • Financing: Possible
  • Support & Training: 2 weeks at 20 hours per week
  • Reason for Selling: Focus on primary business

 

Competitive Landscape:

Regional economic activity drives demand because most graphic design firms are small and work locally. The profitability of individual companies depends on accurate bidding, timely delivery of projects, and a steady volume of work.

Large companies have advantages in marketing and sales, breadth of services, delivery of complex projects, and supporting ongoing contracts. Small companies can compete effectively by responding more quickly, adopting new trends, and specializing in services or markets.

The US industry is highly fragmented: the 50 largest companies account for about 15% of revenue. Graphic design firms compete with complementary industries that serve the business market and with clients’ in-house graphic design staffs. Freelance designers may be competitors or contract labor. Ad agencies, marketing groups, and architecture firms are among the industries that provide visual services and products and include graphic design in their repertoires.

Companies as diverse as packaging manufacturers and commercial printers also offer graphic design services to clients for customization of their finished products.

Products, Operations & Technology – Major industry services are corporate and organizational image services (25% of industry revenue) and advertising creative services (also about 25%). Other services include website design and development, publication design, and commercial illustration design services.

Revenue by Product – US Census Bureau (2012)

 

Industry Indicators:

Industry Indicators US consumer spending on services, a driver of graphic design demand in consumer advertising, rose 2.7% in July 2018 compared to the same month in 2017.

US corporate profits, an indicator of corporate demand for graphic design, rose 7.7% in the second quarter of 2018 compared to the same period in 2017.

Total US revenue for other professionals, scientific, and technical services, which includes graphic design services, rose 9.4% in the second quarter of 2018 compared to the previous year.

Industry Forecast Revenue (in current dollars) for US graphic design services is forecast to grow at an annual compounded rate of 4% between 2018 and 2022.

Data Published: September 2018

Contact info

Pronova Partners

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