10 Ways to Inexpensively Increase the Revenue of the Manufacturing Company You Acquire

As a 30+ year manufacturing M&A veteran, I know there are certain things that many retiring owners fail to do in the years approaching their retirement. These things should be among the first you implement to increase revenue. Often, acquirers begin with “big stroke” items in an effort to facilitate fast growth. These may include investing in newer machine tool technologies or implementing a new ERP system, both of which can be costly. There are, of course, benefits to these, but sometimes, the basics are what is needed to gain 25% or more in increased revenue.

Consider the following 10 ways to inexpensively increase the revenue of the manufacturing company you acquire:

1. Do a website refresh. Often, in founder-led companies, the website hasn’t been touched in years, sometimes decades. As a result, the company can be almost invisible in search. This can be a costly endeavor, but it really doesn’t have to be. It can be done right without a big spend.
2. Establish a learning center or blog as part of the website to educate potential customers on your capabilities and areas of expertise. Buyers within large OEMs are often using search engines to find new suppliers. You have to be visible there.
3. Use social platforms like LinkedIn to push your content to a targeted audience. There are groups on LinkedIn for almost every manufacturing sector imaginable. Your competitors are connecting with potential clients there, and you should, too.
4. Directly communicate with current customers about your manufacturing capabilities. It’s likely the company has skills that your customers are unaware of. Highlight all your machining capabilities to existing and new customers.
5. Ask existing customers, “What else can we do for you?” Let them know that you have available capacity with the ability to provide fast turn-around times without sacrificing quality. If the customer has multiple divisions, ask your current buyer to introduce you to buyers in other divisions for which you have the expertise to provide services.
6. Consider a price increase. Often, sellers haven’t raised prices in years because they’re afraid to “rock the boat.” One recent acquirer found out the company’s distributors marked up their products as much as five times. This acquirer was already working directly with the aerospace OEM, so there was a fast and easy solution, they could go direct with the OEM. You can read more about this story HERE.
7. Look at your customer’s competitors. They likely may need the same services you’re providing to others. Sometimes, the best place to be is #2 because eventually, the #1 provider misses on quality or on-time delivery.
8. Fire bad customers and/or get rid of unprofitable work. This will provide additional capacity to handle work that comes in through the above efforts.
9. Offer new services through outsourcing. Sometimes, OEMs want one point of contact for several manufacturing processes. You can develop trusted provider relationships for things like metal finishing, thus enjoying a mark-up to your customer without providing the service yourself.
10. Ask your new employees how they would improve throughput. Often, retiring manufacturers are stuck on their particular way of doing things, yet there is a wealth of knowledge and wisdom residing in the organization’s skilled workers. Great ideas and strategies often come from those doing the actual work. Unleash the talent that already exists in the organization.

Follow these 10 Ways to Inexpensively Increase the Revenue of the Manufacturing Company You Acquire, and watch it grow.