Be a Fire Marshal Instead of a Fireman When Preparing to Sell Your Manufacturing Business
Instead of putting out fires in the process of selling your manufacturing business, be a fire marshal! Thinking ahead and being prepared, with the help of an experienced broker, will greatly simplify and speed up the process.
Be Prepared to Answer Questions
- A good broker when preparing to sell your manufacturing business will let you know in advance almost every question that a buyer will ask. The broker should know the information and be able to add to the conversation if the Seller is stumbling or nervous. A good broker may ask leading questions of the client to provide an opportunity to bring up important points or features of his company’s products and services. Buyers reason that if you can’t even get through simple questions and answers, the due diligence process will be a nightmare.
Get your computerized records in order
- If not, this can break an entire deal. Professional investors and buyers have plenty of businesses to choose from. If you make them work too hard to find the information necessary to make an informed decision, they’ll move to the next opportunity.
Organize your office and shop floor
- When a buyer visits your shop, it should look immaculate and organized. Think about the last time you shopped for a house. Weren’t you immediately turned off if the place was a mess or smelled bad? This is so simple and basic, yet it’s ignored by so many when preparing to sell your manufacturing business.
Provide information
- About your margins, number of customers, number of industries served and what percentage of your income is derived from each. Most private equity buyers won’t tour the plant unless they have this information in advance.
Prevent interruptions during the meeting
- If a seller can’t organize his time and staff to take a meeting for a short period of time, the buyer will wonder how deep the lack of organization goes.
Have all systems in place
- A buyer doesn’t want to struggle to run the business after your exit. Having written systems and procedures will alleviate this fear.
Don’t Wear too Many Hats
- Make sure you are not the only person who can provide quotes. If the Seller is the only salesperson or person responsible for providing quotes, you’ll get an instant thumbs-down. That means the company is too dependent on the owner and the buyer’s investment will be at risk.
So be a fire marshal. Calmly get ready for the process of finding a great buyer when preparing to sell your manufacturing business instead of having to respond to a 911 call!
Contact us with any questions or to learn how an exit plan could help you achieve your goals of retirement with an appropriate liquidity event.