Below you’ll find nine of the most frequently asked questions and answers from manufacturing business owners across the United States looking to sell their manufacturing companies.
How do you determine the value of my manufacturing business?
This is the most frequently asked question we get. All brokers will talk about benchmarks and multiples of EBITDA (earnings before interest, taxes, depreciation and amortization) or SDE (seller’s discretionary earnings).
With a 28+ year history of selling manufacturing companies, we take a different approach. Of course, the numbers come into play, but we look at over 175 data points and seek to understand what is truly unique about your company and culture. Because we work exclusively within the manufacturing sectors, we can typically see possible synergies and value others don’t.
Here’s some more information on items that affect the value of a manufacturing business: business valuation.
Can you tell me what my business is worth, without me paying hefty upfront fees?
Yes. We’ll provide you with an estimate of the most likely price range your business will sell at and how long it will take to get the job done. We’ll do so without charge and before we ask you to entrust us with the sale of your company.
This is what we like to call the manufacturing business owner’s Bill of Rights. If someone is asking for exorbitant fees upfront to tell you what your business is worth, perhaps they’re in the opinion business, NOT the business of Selling Manufacturing Companies. We think there is a better way!
I’m afraid of my competitors, customers or employees finding out my business is for sale. Can my business be marketed confidentially?
We never use your name in our advertising. To do so would hurt most of our clients. We maintain confidentiality until a buyer is fully vetted, both financially and professionally. Even with an NDA in place, a potential buyer doesn’t know who you are until they are fully vetted.
How long will it take to sell my business?
Manufacturing companies in the lower middle market usually take eight months to one year to sell. Although we’ve successfully sold companies in dramatically less time, that is not the norm. The speed with which a business can be sold is highly dependent on whether or not the Seller can respond quickly to data requests.
Here’s why you should plan early. Read the following article: Selling a manufacturing company: How long?
Should I use a business broker or M&A advisor to sell my business?
Absolutely. A business broker or intermediary is invaluable in the sale process. If they are a specialist, they will expose your business to quality buyers from all over the country. Additionally, we provide an important barrier between you and the buyer, only releasing information at an appropriate time. Other services include:
- Vetting buyers both financially and professionally
- Preparing a pitchbook to highlight the company
- Facilitating potential buyer meetings
- Navigating due diligence
- Contract negotiation
- Negotiation of asset allocation to mitigate the tax consequence of the transaction
What types of buyers do you typically sell to?
As one of the only firms of our kind in the United States, selling exclusively within the manufacturing sectors and selling nationally, we expose our client companies to a broad range of highly qualified buyers.
We’ve sold manufacturing companies to Fortune 50 companies, private equities, wealthy families and private individuals. Each client has a different idea of the “ideal buyer.” Most want to ensure future opportunity for their staff and respect for their legacy.
We work with clients to understand their goals and what’s truly important to them. We never take a cookie-cutter approach because every manufacturing company is unique.
I’m an experienced manufacturer, but I don’t know a lot about mergers and acquisitions. Will you manage the entire process?
Yes. We’re with you throughout the entire process, including all potential buyer visits, even if you’re on the other side of the country. Most of our clients are founder-led, or family-owned manufacturing companies that have never sold a business before. For most, it’s the largest transaction of their life. We understand how scary that can be. We’ll navigate the entire transaction and you’ll know what to expect every step of the way.
What are the most important things to do to get my business ready to sell?
Here are 10 critical things you should focus on when selling your manufacturing business: How to get the best price for your manufacturing business.