How to Sell a Machine Shop in Optimal Time

Posted On: / By: Brian Knoderer
Selling A Business

The machine shop industry’s annualized revenues have remained largely unchanged over the past five years, making it an attractive industry to those looking for a steady business model. If you’ve been contemplating whether or not to sell a machine shop or milling business, now may be the time to do it.

Five Questions to Ask Before You Sell a Machine Shop

Before you list your machine shop or fabrication shop for sale, ask yourself the following five questions. Equipped with answers to these questions, you’ll be ready to take the next steps towards selling your machine shop.

  1. How will you exit the business?

Whether you’re selling your machining business in the near future or later on, you should always have an exit plan in place. A detailed exit plan should answer all of the following questions.

  • business owner preparing to sell a machine shopWhen will I exit the machining business?
  • Will I continue working as a consultant or advisor to the new machine shop owners for a set timeframe?
  • Does my retirement depend on the sale of my machine shop?
  • Will machine operators and managers continue working under new owners?
  • Who is my ideal buyer?
  • Do I have all of my shop’s financials and contracts in order?

These questions will help you begin crafting your exit strategy, but consider enlisting the help of a professional to create a solid plan.

  1. What is the value of my machine shop?

After you’ve finalized your exit strategy, you must value your machine shop. While there are a variety of ways you can value your shop, the best route is typically enlisting the help of a valuation service. A professional valuator has the experience to accurately and impartially determine the worth of your shop. With an understanding of what your business is worth, you can select and defend an asking price.

  1. Will I sell my machinery and tools with the business?

Before your list a machine shop for sale, consider whether or not you’ll sell your machinery and inventory. As you know, the cost of milling machines, saws, grinders, and shapers, adds up quickly. Including lightly used machinery and tools in the sale may increase your value and catch the attention of potential buyers.

  1. How can I improve my machine shop’s revenues?

Interested buyers are looking for a machine shop that rakes in considerable revenues. The better your financials look and the stronger your book of business is, the more quickly you’ll find a buyer.

Consider how you might increase your revenues in order to pique the interest of buyers. For example, should you broaden your offered services to accommodate the growing number of commercial manufacturers? Alternatively, should you hone in on the medical manufacturing sector to accommodate the aging population in the United States? While these may not be solutions for every machine shop, it’s certainly worth weighing your options with a trusted business advisor.

  1. How will I advertise my listing?

You could have the best machine shop in your area, but without proper advertising, your listing will never get in front of interested machine shop buyers. To help you sell your business quickly and for maximum value, consider enlisting the help of a professional business broker.

Business brokers have access to an extensive network of interested buyers and can take the stress out of listing your machine shop for sale and identifying interested parties. Plus, once you receive an offer on your shop, a broker can guide you through negotiations, contracts, and closing a deal.

For more information on preparing to sell a machine shop or to request a valuation of your machining business, contact Sunbelt Business Brokers. Your local Sunbelt Business Brokers office can guide you from listing to closing, all while allowing you to focus on what’s most important – your business.

Brian Knoderer is the President of Sunbelt Business Brokers. He has over 20 years of experience as a business owner and managing business transactions. As a seasoned intermediary, Brian has successfully represented companies in a broad range of industries helping business owners achieve their desired exit strategy or growth initiative.

Brian is also co-owner of Sunbelt Indiana and Managing Director of MMI Capital Partners, a franchisor focused investment banking firm.

Previously Brian was involved in several entrepreneurial ventures as well as having held corporate roles in Franchise Development for Prime Hospitality and Choice Hotels.

Brian is a graduate of Ball State University with a degree in Management Information Systems and earned his MBA from Butler University. He has received the Certified Merger & Acquisition Advisor (CM&AA) designation, holds both the Series 7 – General Security License and the Series 63 – Uniform Securities Licenses, and is a licensed Real Estate Broker. He has been affiliated with several organizations including the Entrepreneur Organization, a Member of the International Business Brokers Association, Venture Club, and a Board Member of The Entrepreneur Institute.

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