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Just as Baby Boomers on the lean manufacturing plant floor are getting ready to retire, so are the owners. More than 5,000 small manufacturing operations (with annual revenues between $2M – $20M) will either close their doors or find new owners in the next five years. Some of these owners are motivated to keep the business running for their seasoned and experienced employees. Others really want to “cash-out” after decades of hard work. What few of these founder/owners consider is what they can do over the next year to help…
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Every buyer seeking acquisition within the manufacturing sectors wants a business guaranteed to grow. However, in order for that to exist, the manufacturing company would have to address a need that is not only current, but guaranteed to increase over time. For exponential growth, the need would have to be greater than a particular sector or geographic region. Think of products or technologies that have solved a universal need tied to all of humanity. While everyone in every nation might not be using them yet, there is potential for worldwide…
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Making the decision to sell your manufacturing business is a big step. Actually meeting a prospective buyer in person for the first time can feel like an even bigger step. That’s why it’s wise to prepare properly to ensure the buyer meeting goes smoothly. Here are some pointers on what to do before, during and after the meeting. Before the Buyer Meeting As Entrepreneur advises, it’s critical to know whom you’re meeting with. Is it the prospective buyer — or his or her broker or advisory team? Keep in mind that…
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If you’re in the process of acquiring a manufacturing business, you’ll be expected to submit a formal letter of intent — or LOI — to the seller. So what exactly is this, and what critical elements should it contain? The Purpose of a Letter of Intent (LOI) A letter of intent is written after you’ve performed sufficient groundwork to want to proceed with further due diligence prior to an acquisition. It’s generally considered to be non-binding, but it does outline in broad strokes what a final purchase agreement could look like,…
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If you want to create more value for your company, you might be considering acquiring another manufacturing business. At the same time, perhaps you’re an entrepreneur looking to acquire an existing business to take it to the next level. In both of these instances, it’s advisable to work with a dedicated M&A advisory team that has extensive experience in acquisitions in the manufacturing industry. Because as Investopedia points out, an acquisition involves: Large sums of money. Vast amounts of paperwork . Complicated accounting procedures. Government regulations. Other legalities. – It should…
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You’ve worked hard to build your manufacturing business. For years, you’ve put in the hours, the money and the dedication required to keep growing it. And now it’s time for a new chapter in your life — whether that’s starting a new venture or enjoying your retirement. But one question you might be asking yourself at this crucial crossroads is, “should I sell my manufacturing company without a business broker?” Of course, there are advantages and disadvantages to doing so. In this article, we’ll offer some pointers for you to…
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Acquiring a manufacturing business is a significant endeavor. A critical step in this process is securing the funding to buy the company you have in mind. Oftentimes, entrepreneurs seek financing from angel investors or venture capitalists. However, these options don’t always work out. The investors may have requirements you can’t meet or that you don’t agree with. At the same time, they might not offer the full amount you need to acquire the targeted business. SBA-Guaranteed Loans Fortunately, the U.S. Small Business Administration — or SBA — is a governmental…
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Manufacturing Day was established in 2012 to address both the skills gap and misconceptions about modern manufacturing. There is universal agreement this is a valuable and important effort. According to the Bureau of Labor Statistics, more than 500,000 manufacturing jobs remain unfilled month over month, year over year. The projections are this situation will only get worse. Research by Deloitte and the Manufacturing Institute predicts that over the next ten years, manufacturers will lack 2.4 million of the 4.6 million workers needed. The Bigger Problem: Manufacturing Owner Founders…
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When you’re looking to acquire a manufacturing business, securing the financing can be one of the most challenging aspects of the process. Lenders and investors will want to see a certain amount of personal investment on your part, so you need to have those funds available. At the same time, maybe you simply don’t want to take on debt or have someone else involved in the running of your company. That’s why you might be considering using your 401(k) to finance your business. There are three ways to do this,…
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If you’re considering selling your manufacturing business, you might be thinking about selling to a private equity firm or private equity group. As Inc. explains, a private equity firm — or PE firm — operates an investment fund that usually lasts for around 10 years. Because its investors want an ROI that’s greater than the normal stock market return, it looks for opportunities to invest in certain types of companies. In general, these companies: Operate in an expanding market. Have solid management teams and plenty of opportunities. Lack the capital to take…
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