How to Sell a Manufacturing Business

How to Sell a Manufacturing Business 2019-09-17T15:42:50+00:00

Selling your manufacturing business is a major decision. Therefore, it should be approached with care and diligence. Without undertaking some advanced research, sellers may not understand:

  • How to ensure they receive the best price for their business.
  • How to expedite a sale.
  • How to ensure the sale process remains private.

The right CT business broker firm can help answer all of the questions a seller might have. Then, they can facilitate a transaction on the best terms, in the shortest possible timeframe. At VR New Haven, we do exactly that. As one of the best business brokers in CT, we have years of experience in effectively managing manufacturing business sales.

Let’s take a closer look at the process of selling a manufacturing business, and why VR New Haven is the leading choice for sellers in this industry.

Selling a Manufacturing Company

The manufacturing sector is often misperceived as an industry that is on a slow decline to irrelevance. However, the truth is much different – the manufacturing industry employs 12.8 million people and contributes more than $2 trillion to the U.S. economy. In 2019, the industry reported its strongest job growth numbers in 30 years, according to U.S. government statistics.

As a result of this growth, manufacturing business sales are also increasing, as demand has risen.

In order to facilitate a successful sale, it’s important to follow a few key steps, which we will outline below.

  • Sell When Your Manufacturing Business Is in a Strong Position You wouldn’t sell your home if it had a leaking roof and peeling paint, so why sell a business when it’s operating at less than peak form? A manufacturing business with robust underlying financial numbers, a strong infrastructure, and talented staff is a desirable proposition. A company that is declining, however, will turn off prospective buyers and likely lead to a slower sales process and a lower than desired sale price.
  • Plan Ahead – It often takes a year or more to conclude a successful business sale, and that timeframe can be significantly expanded when sellers fail to prepare properly. That’s why it’s critically important to have detailed business records, a business history, and a sales portfolio on hand. By preparing and planning ahead of time, sellers can help facilitate a faster sale.
  • Create a Detailed Transition Plan – One of the core challenges of any business acquisition is leadership transfer and integration. If you’re not staying involved in a management capacity as part of the sale agreement, it’s a smart idea to have a viable management structure in place. Not all buyers will integrate a new business into their own management structure; many are wholly reliant on the people already in place at the target business. As a result, it’s a good idea to create a detailed transition plan that portrays the company as a machine that can operate flawlessly even in the absence of its current owner.
  • Develop a Proper Valuation – Determining the right asking price for a manufacturing firm is often difficult for sellers, as they may have little context by which to make such an assessment. Generally speaking, it’s necessary to conduct market research that focuses on comparable sales in the industry and in the region. Choosing to work with a business broker can help expedite the valuation process while ensuring that sellers don’t aim too low. This is because business brokers have much more experience with market values and access to the most current data. This allows them to find the “sweet spot” that helps ensure a timely sale at a fair price.
  • Choose the Right Partner – Owners of manufacturing businesses don’t have to negotiate the tricky terrain of a business sale alone. By working with an experienced business broker, sellers can minimize errors, streamline the sales process, arrive at a proper valuation, and target likely buyers. In essence, a business broker can help ensure a seller realizes a fast sale at the desired price, without any unforeseen stumbling blocks. However, choosing the right partner is critical, as some business brokers are more experienced than others. The right broker should have particular expertise with manufacturing business sales, as this industry-specific knowledge is often the key to expediting a transaction on favorable terms.

Why VR New Haven is the Leading Choice for Manufacturing Business Sales in CT

At VR New Haven, we help owners of manufacturing companies realize their sales goals every day. Our expertise spans the entire manufacturing industry, and we facilitate sales in the following categories:

  • Technology Manufacturers
  • Contract Manufacturers and Precision Machine Shops
  • Specialty Chemicals Manufactures
  • Construction Equipment and Product Manufacturers
  • Industrial Product Manufacturers
  • Consumer Product Manufacturers
  • Beverage and Food Product Manufacturers
  • Niche Manufacturers
  • Raw Material Manufacturers

By choosing to work with VR New Haven, manufacturing business sellers receive a variety of powerful advantages. We offer our clients access to a database of relevant likely buyers within the industry (both qualified and targeted) and a deep understanding of deal structures and market valuations. Our expert team can also authoritatively speak the language of the industry and address the issues that are most important to buyers and sellers.

We have also developed a sophisticated model that allows us to provide the industry’s most accurate business valuations. Our analysis is focused on six key areas:

  • Strength and Depth of Company Management
  • Quality of Current Customer Base
  • Quality of Financial Controls
  • Threats of Competition in The Market
  • Vendor and Supplier Risk Assessment
  • End Markets the Company Operates In

This model allows us to provide our clients with the most advanced guidance on how to value a manufacturing business. From preparing a sale to evaluating a business and targeting the most likely buyers, VR New Haven has the right processes in place to help ensure a timely and successful transaction.

If you have a manufacturing business for sale – or you’re considering beginning the process – contact VR New Haven today. Our expert team will discuss your situation in greater depth and get your business on the path to a successful sale.