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If you are considering a manufacturing acquisition in the next few months, understand this: We are (and will continue to be for another 3-5 years) in a SELLER’s market. And, what that means is the seller will have a choice when it comes to deciding with whom to sell. Now, more often than ever before, are we receiving multiple LOI’s for listings, giving the seller a strategic edge in the negotiation process. If you truly want a shot at entrepreneurship, you need to be perceived as a “better buyer” in…
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Typically at the start of each year, manufacturing business owners who are close to retirement will vow that THIS will be the year they retire. They promise their wives and their grandchildren that before year’s end, they’ll have more time to spend with their loved ones, more time for travel and time to enjoy the fruits of their labor. As in all things, life sometimes gets in the way of promises we make and the plans to achieve them. Big orders come in or changes in staff occur that occupy…
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A strange phenomenon is happening all over the United States. Executives are leaving Fortune 500 companies to acquire their way into entrepreneurship. These smart executives often have less than 10 years remaining in the work force. Their goal is to find a manufacturing company that can be scaled up, perhaps doubling in size. The sale of the company after they grow it will be their parachute into retirement. Finding a good product based manufacturer that can be scaled up is hard. Finding one that allows you to live in a…
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On the list of things you should understand prior to selling your business are: What’s included in the listing price What is a fair, reasonable list price for your company AND what is the valuation based on Any business owner who is considering the sale of their company should know there are a number of methods for producing “an opinion of value” for any business. Of equal importance, is the understanding of what is included in any valuation. Recently, it came as a shock to a few manufacturing business owners…
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When manufacturing business owners are ready to sell, they typically research local business brokers or M&A professionals in their geographic area, interview a few and with their fingers crossed make the decision as to who will likely be the best advisor to get the job done. While they should be commended for doing their homework, this method is likely to bring less than desirable results. This approach is missing a vital component needed for success. Here’s why choosing an M&A Specialist can accelerate the process. Who Is Currently Buying Lower…
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Having worked in manufacturing M&A for more than 2 decades, I’ve learned that there is ONE critical skill required above all others if you’re selling a manufacturing company. This one skill is hard to come by in an M&A professional or manufacturing business broker. For Sellers, it’s a skill you should look for in any professional you hire. If they have this Most Critical Skill, a broker can cut the time it takes to sell in half…. or more. We recently went under contract to sell a manufacturing company…
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Here’s a story to inspire; a story to help you believe that your dream of business ownership is possible. You’re not stuck in corporate America forever, with endless meetings and endless layers of approvals to get anything done. This is a story of how one man declared his independence from corporate America by buying a manufacturing company, and how you can too. It’s really not as hard as you think. Jim was a young baby boomer, in his early 50’s. He worked in an executive position for a large and…
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We’ve written previously about The 4 Key Components To An Offer To Purchase A Manufacturing Company. While great information was contained in this article, we’ve watched two great buyers lose deals in the last two months to their competition. In this article we’ll examine the missing element, which was the deciding factor in these two recent deals. If you’re buying a manufacturing company, here’s how to win if you’ve got competition. Consider Who Is Selling Manufacturing Companies: Most of the manufacturing companies we sell have revenues between $2-$15 million. Our…
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Discretionary Earnings Method You can easily Google information on the three basic approaches used to determine the value of a small business. We use the income approach and specifically the “multiple of discretionary earnings method.” What you won’t learn from an Internet search is what it’s really like moving through the process. Candidly, it can be a little bit like having someone go through your underwear drawer. The reason it may be uncomfortable for a seller is because it is at this early stage in the relationship with their broker…
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Our client company is a recognized industry leader in the arena of Micro-Precision manufacturing. They’ve pioneered methods to provide the most accurate and consistent surfaces possible. Customers engage our client when a surface, regardless of it being metal or non-metal, has to conform to exacting standards. High tolerance and consistent finishes are achieved through a variety of expert techniques. This manufacturer has a highly skilled and tenured staff that run all operations and has been in business for over sixty years. Recognized Industry Leader in Micro-Precision Surface Finishing Diversified Customer…
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