The phrase, “What makes manufacturing companies successful?” returns 169 million results in a Google search in .4 seconds. Now in my 25th year of selling manufacturing companies, I can tell you for sure that what makes them successful is also what makes them easy to sell. Having sold both highly successful manufacturing companies and companies on the brink of bankruptcy, my organization has unique insight into what makes a great manufacturing business. I’m launching a new series of articles on this subject in the hope that some manufacturers will move from one category to another - from struggling to successful. I write in frustration because I simply can’t help everyone that comes to my firm seeking an exit from their business. Some, although relying on the sale of their manufacturing business to fund their retirement, have no clue that their business has no hope of selling at a price they need to fund their retirement. My sincere hope is to change that for some.
Best Business Practices for Successful Manufacturing Companies
There is so much to cover on this topic that it will be a series of articles, over several months. In addition to the insights shared, hopefully we’ll have fun along the way. Even if you’re an incredibly successful manufacturer, you’ll likely take away some ideas to help you continue to build. While some items we’ll cover are unique to the manufacturing sectors, some are applicable to business in general and might be categorized as “best business practices.”
Experience & Background – The Good & Not So Good
Before we dive in, a little background is in order. As a business owner, if I’m reading business advice, I want to know the credentials of the one giving advice. Here’s the short version and why you might want to consider following this series. We have been continuously serving the manufacturing sectors since 1994, though not under the same corporate heading. We began our journey as manufacturing equipment auctioneers, helping companies exit who were often in deep financial trouble and requiring speed. Interestingly our buyers were manufacturers who were growing, thriving and seeking expansion. It was at their behest that we began our M&A services, both to help them retire out of their businesses and grow through acquisition. Although we maintained two divisions for some time (M&A and Industrial Auction), our M&A work far outpaced our auction division. Years ago, we made the strategic decision to close our auction division and focus exclusively on manufacturing mergers and acquisitions. Over the course of many years, we observed the same patterns of behavior in successful manufacturing companies. Manufacturers in trouble displayed much different characteristics. In both cases the patterns became easy to spot over time. We found that we could accurately “predict” the future of a manufacturing company based on how they approached certain key functions.
Questions You Should Ask as You Follow This Series
Today, even though our practice is strictly in mergers and acquisitions, because we are the leading specialist in the sale of manufacturing companies, people come to us for help that we sometimes can’t help. As we move through this series, we’ll highlight both sides of the coin. We’ll talk about the attributes of the manufacturing companies that are incredibly successful and easy to sell, and the attributes of the ones nobody wants to buy. As we cover a different topic with each installment ask yourself these important questions:
- Does my own company’s practice more closely align with successful manufacturing companies, or the not so successful example?
- What one thing can I institute this month, this quarter and this year to better align my company’s practices with successful manufacturers?
- If successfully implemented, how would this new practice change the outlook for my company?
- What would be the cost or damage over time to my company if I don’t improve in this area?
- What are successful manufacturers doing that I’m not doing?
- If I continue doing things the way I’m doing them, will I be able to exit my company at a price that will provide me with the retirement dollars I need?
What We’ll Cover
Here are some topics that we’ll be covering in the coming months. We’ll likely add to this list before completing the series. We’re aiming for this to be an interactive series where business owners can write-in to ask about particular issues they’re facing TODAY. Here are some of the topics we’ll cover in the coming months:
- Sales and marketing – what you’re not doing that can slowly kill your business.
- Why social media really Is for manufacturers…. Really!
- How smart manufacturers are stealing your customers.
- Why the biggest challenge you’ll face in the next decade isn’t what you think it is – are you ready?
- The skills gap – why some savvy manufacturers aren’t feeling the pain.
- If you want more productive employees you better learn how to do this!
- Sustainable and exponential growth – why only a few manufacturers ever achieve it.
- The infrastructure needed to accommodate real growth – it’s more than your building and machine tools.
- You don’t have to be a “contract manufacturer” to sell for millions – basic job shops who’ve rocked it into the stratosphere and how they did it.
- Building an enterprise that can survive your absence – it’s all about the systems.
- The critical numbers – what to measure and who should be involved.
- Simple and fast ways to increase your bottom line NOW.
- Saying goodbye to the good to make room for the great.
- Running a principle-based business.
- What acquirers really want to see.
- How to set your business apart from others on the market.
- Be a CEO and not a machinist.
This is an extensive list but it really boils down to 4 main areas of discussion:
People – Plan – Implementation - Numbers
We’ll begin the next installment with the people portion of our discussion. As we move through our topics I encourage you to write in with questions. If you have a question or are struggling with a particular issue, we encourage you to comment or email us. We can address your concern in a coming article without disclosing your name or your company’s name if needed. If emailing, please write to: firstname.lastname@example.org. If you’re a manufacturer who’s had success in the areas we’re writing about, please write in to share your wealth of experience.
In vain have you
if you have not
imparted it to others.
(c.900, commentary on the Book of Deuteronomy)
I look forward to taking this journey with you – hopefully we’ll all learn a little something from each other and enjoy the process.