OUR SERVICES


• Business Brokerage Services
• Business Sales... detail
• Business Acquisitions... detail
• Business Valuations
• New Franchised Business Sales

MERGERS AND ACQUISITIONS


Sell-Side Representation
>Buy-Side Representation
• Sell-Side Due Diligence
• Buy-Side Due Diligence

Confidential Consultation


You can rely on our Business Intermediary Services to deliver. We offer free confidential consultation to discuss your Exit Strategies and/ or Acquisition options. Call (416) 364-5550 Or ....eContact Us

Feb
01

Buying a Manufacturing Business: What You Need to Know

By

Buying a Manufacturing Business: What You Need to KnowBuying a Manufacturing Business

Most business people see the buying of a manufacturing business as a lesser risk as compared to building one from the ground up. It is true that buying a pre-existing business has its high points. But this does not in any way guarantee that the business will succeed in your hands. If you have made up your mind to purchase a manufacturing business, you need to tick some vital boxes and ensure that you are making the right decision.

Following could be the points for due diligence:

  • Get a Valuation

Once you have located a business that fits your business aspirations, it is important that you get a valuation of that business. No bank will touch you with a 10 foot pole and give you a loan without a professional valuation of the company. It is foolhardy to jump in the water and try to take on everything by yourself. Remember you need start-up capital to keep the business running. So do not commit all your cash.

Get professionals in on the valuation job. You cannot afford to rely on your own judgment which might narrow-minded or birthed on sentiments. Business valuation experts always return with the winning numbers to help potential owners decide if they are good to go or if they should abandon a purchase. So do not try to reinvent the wheel.

  • Keep Diligent Employees

All great businesses are driven by even greater individuals. Do not waltz into the place and fire the people who helped to make the business a success in the first place. It is crucial that you keep hardworking and passionate employees who understand the business, customers and how to handle the competition. If you let them go, your competition might just welcome them with open arms. And this is bad news for you.

  • Unpaid Bills

Remember that buying a manufacturing company comes with a saddle of hassles. You might be charting new courses or expanding your business terrain. But it is vital that you realize that certain lapses would come with the territory. It is not every business owner that will put you in the loop about talk about unpaid bills or pending debt payments.

It is up to you to play the sleuth and check up on the contractors and tax agencies to find out if the books are clean and healthy. Ensure that you also get 2nd opinions from the employees about the status of the company accounts.

  • Profit Projection

You do not just whip out your money and pay for a manufacturing business just because it is there for the taking. You need to know when you will start to rake a profit from the business after getting your principal investment back.

If you are pushing the purchase through with a loan, figure out when your last payment would be paid. Can you wait 5 or 10 years before you start to rake in the profits? If it is going to take you over 2 years to break even, does your financial position allow you to sit comfortably waiting for that to happen?

Categories : Blog, Tips/Articles

Leave a Reply

SELLING A BUSINESS


Looking to sell your business? Selling your business confidentially & in top dollars needs preparation, patience, & right Business Brokerage Service. We market & process your sale while you concentrate on your business operation.....details

BUYING A BUSINESS


Considering buying a business? We can assist you find the right business & manage the entire buying process to ensure a successful transaction. For matching business opportunity suitable for you, let us know your preferences. ...details

VALUING A BUSINESS


Right pricing results in quick sale of a business. Overstating or underestimating business value can be costly for an owner. We help our Client avoid costly mistakes by valuing a business that can help you make/ save when buy or sell....details

AFFILIATIONS

footer carousel