SELLING MY MANUFACTURING COMPANY
If you have decided the time is right to sell your manufacturing company, read on for all the key information and guidance that needs to be considered as you put your exit strategy in place.
For more than a quarter of a century we have helped many shareholders achieve their goal to sell a manufacturing company, building up vast experience in the processes involved and becoming established as the UK’s leading business sales adviser.
SELLING MY MANUFACTURING COMPANY
HOW TO SELL A MANUFACTURING COMPANY
We appreciate the magnitude of the decision to sell a manufacturing company, but it needn’t be a daunting experience if you have the right adviser in your corner to help you every step of the way.
The process comprises several stages and you can count on our expertise throughout all of them.
1. Market valuation of your company
We consider all the important factors that will influence the valuation of your business, analysing the company’s financial profile and outlook whilst also considering the equivalent values that have recently been achieved in your sector.
2. Business negotiations
Striving to achieve the highest possible value for your company requires negotiations which can be any combination of tough, delicate and diplomatic. We have considerable experience in negotiating with buyers and striking the right balance to ensure you emerge with the result you are seeking.
3. Due diligence
An integral part of a business transaction, due diligence will be undertaken by the acquirer to check the financial picture of the company has been presented accurately. We can assist if you want to precede this by conducting your own due diligence process and with the drawing up of confidentiality agreements.
4. Management of assets
In the manufacturing industry, fully functioning machinery and equipment are essential to preserving a company’s value. Ensure all maintenance checks are up to date and safety certificates easily accessible.
5. Letters of intent and final sale
A variety of legal documents underpin the process when you sell a manufacturing company, but you needn’t worry about becoming bogged down in paperwork and red tape because we can oversee all those aspects of the transaction, leaving you free to focus on running your business to best effect.
WHY SELL A MANUFACTURING COMPANY
Shareholders often have their own individual reasons for selling a company, perhaps personal to them in the sense of having decided the time is right to retire or embark upon a change of lifestyle.
Maybe an opportunity has arisen to launch a new project and therefore capital, from the proceeds of the company sale, is required to fund that.
But there may be other factors at play. Profitability projections need to be taken into account, which could be subject to factors such as potential supply chain disruptions and the impact of the global economic outlook on the value of sterling and consumer confidence.
HOW TO VALUE A MANUFACTURING COMPANY
Whether the criteria for the valuation is based principally upon your company’s financial performance or comparisons to previous acquisitions in the sector, it is always worth bearing in mind that the business is only truly worth what someone is prepared to pay for it.
Of course, determining a valuation for your company is part of the service we provide at KBS Corporate, and we will start by identifying ‘value drivers’ that catch the eye of potential acquirers and trigger an appetite within them to buy your business.
6 STEPS TO INCREASE THE VALUE OF SELLING YOUR MANUFACTURING COMPANY
1. Manage hard assets
This means maintaining the entire look of your company to ensure it is displayed as attractively as possible to potential buyers. Besides checking all facilities are functioning to optimum performance, make sure company vehicles and even signage represent the company in the best possible light.
2. Maintain innovation
A clear roadmap for the future direction of the company is desirable to an acquirer. They will want to see growth plans that have been clearly thought through and are eminently achievable, leading to a seamless handover to buyers who will not be as familiar as you with the potential of the company.
3. Compliance with regulation
There should be no loose ends that need tying up in terms of regulatory compliance at the time you sell your manufacturing company, so make sure all checks have been carried out in the appropriate timeframe and that lease agreements, contracts and other legal requirements are up to date.
4. Steady revenue
A healthy cashflow running through the company is highly important for it indicates the strength of how the business is performing. It also reduces the need for the buyer to inject a sizeable amount of working capital and therefore increases your power in negotiations over the eventual sale price.
5. Ensure finances are in order
One of the key aspects here is stock control, ensuring as much as possible of what you produce is being manufactured to order and that there is no excessive surplus of raw materials. Company buyers will not want to pay for anything they deem unnecessary, so running a tight ship will enhance the financial picture.
6. Obtain an accurate company valuation
An informed idea about the valuation of your company is crucial when embarking upon a sale. The hard work you have put in should be rewarded, but the valuation also needs to be realistic. With our years of experience in this area, we are ideally placed to advise you on striking the right balance.
EXPERT SUPPORT WHEN SELLING A MANUFACTURING COMPANY
Partnering with an expert business sales adviser enables you to concentrate on maximising the value of your manufacturing company. KBS Corporate brings extensive experience in selling manufacturing businesses, having guided numerous companies in this sector through to the completion of their shareholders’ exits.
With a history of award-winning success, we’re dedicated to supporting you at every stage to ensure your company sale achieves all your objectives.
For a confidential, no-obligation conversation, contact us on 0161 258 0118.
SALES WE HAVE COMPLETED
IN THE MANUFACTURING SECTOR
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Record Electrical Associates
Sector: Analogue Instrumentation
Location: Greater Manchester
Buyer: Trent Instruments
