5 Reasons to Hire a Manufacturing Business Broker

Selling your manufacturing business for the best price is important for your financial future.

That’s why you should hire an expert to handle the sale of your California manufacturing business and do business with manufacturing business brokers. 

A manufacturing business broker will help you sell your company by:

• Preparing your manufacturing business for sale.

• Setting an accurate evaluation for your manufacturing company.

• Connecting you with qualified potential buyers.

• Scheduling the best closing date for you.

• Making sure your company’s sale abides by California regulations.

These five reasons you should hire a manufacturing business broker to sell your manufacturing business in California will add up to you getting the highest price. A manufacturing business broker’s commission will pay for itself in the profit you’ll make. 

What Is a Manufacturing Business Broker? 

If you’ve never sold a manufacturing business before, you may not be familiar with manufacturing brokers and what they do. These dealmakers can facilitate the sale of your California manufacturing business by bringing qualified buyers together with sellers. 

Role of a Manufacturing Business Broker 

As a business owner, a manufacturing business broker will handle steps that you may be unfamiliar with as you prepare to sell your manufacturing business. A manufacturing business broker can create and market deals by bringing together sellers with qualified buyers. 

A skilled business broker, also known as a merger and acquisition specialist, will bring more interested buyers to your doorstep and will bring higher offers than you might get on your own. 

Manufacturing business brokers are master negotiators who will represent your best interests during the mergers and acquisitions sale process. 

They’ll represent you and your California manufacturing business all the way to the closing of the sale. 

Steps a Manufacturing Business Broker Will Manage

A manufacturing business broker will manage these phases of the sale of your California manufacturing business. 

Preparation 

A merger and acquisition broker will work with a business owner and chief financial officer in gathering business statements and other documents needed to perform a business valuation, which will determine a profitable price for your business. 

Pinpoint Potential Buyers 

A manufacturing business broker will then identify those who would be well-qualified to purchase your manufacturing business. A broker will know where to find these potential buyers and how to reach them. Discussions with interested buyers will follow as the broker puts together the sale of your California manufacturing business. 

Due Diligence 

When a seller accepts an offer, the due diligence process begins. The manufacturing business broker will review leases, agreements, and contracts and, since it is a requirement in California, open escrow. 

Escrow is usually handled by a company licensed in California that acts as a neutral third party. Deposits are collected from the buyer, and federal, and state tax clearances are obtained. 

Scheduling a Closing 

Your manufacturing business broker will work with all parties to set a date for the sale’s closing, bringing in legal experts and preparing paperwork that will be signed to complete the sale. You might be interested to learn more about the definitive agreement.

Which of the Following Is a Manufacturing Business? 

You may be asking whether your business is actually a manufacturing business. Would it qualify to be sold by a manufacturing business broker? 

A manufacturing business makes a finished product. These businesses make products that are sold to consumers or other businesses by using raw materials or components.

With manufacturing making up 11.3 percent of gross domestic product in the U.S., the business sector includes businesses as disparate as Airstream and Gorilla Glue. Other examples of manufacturing businesses include Heritage Bicycles, L.L. Bean, and Lodge Cast Iron. 

In California, there are an estimated 11,000 manufacturers in the lower middle market segment. Ranging from food, furniture, components, medical devices, machinery and equipment, automotive, electrical devices, mills, bakeries, drones, and aerospace component manufactures among many other manufacturing companies based in California.

Manufacturing Industry Fun Facts in California

• Manufacturing exports worth $149.56 billion in 2019.

• Top 5 export markets in 2019: Mexico 17.75%, Canada 9.24%, China 9.12%, Japan 6.5%, and South Korea 5.14%

• Computer and electronic products are the biggest sector worth of $102 billion.

For more about the California's manufacturing industry, check out this source.

Manufacturing Businesses for Sale

A manufacturing broker is a source for finding a manufacturing plant for sale. Manufacturing business brokers are a source of California manufacturing businesses for sale. 

Buyers interested in buying lower middle-market manufacturing businesses will consult with manufacturing M&A advisors to find out which businesses are for sale. 

Suppose you are selling your manufacturing business or are in the market to buy a California manufacturing business. In that case, a manufacturing broker with experience in mergers and acquisitions should be a part of the buy and sell side M&A process. 

Mergers and Acquisitions M&A FAQs 

You may have questions about selling a manufacturing business in California. These FAQs may help.

How Do I Sell My Manufacturing Company in California? 

Selling in manufacturing doesn’t only involve products. How to sell in manufacturing can also include selling a manufacturing company. The best first step is to hire a California manufacturing broker to manage the sale process from start to finish.

How Is a Manufacturing Business Valued If I Want to Sell My Manufacturing Business?

The first step in selling your California manufacturing business is to set an accurate value for the manufacturing company. 

A manufacturing broker who is skilled in manufacturing M&As can answer the question of “How to value my manufacturing business?” by helping increase visibility and recognition of your brand and then performing a business valuation. 

Studying cash flow and net income, or earnings before interest, tax, depreciation, amortization (EBITDA), the value of facilities, and the California manufacturing market will result in a professional manufacturing business valuation from a manufacturing M & M&A broker. 

The Bottom Line 

Selling manufacturing businesses in California and buying California manufacturing companies requires the expertise of manufacturing business brokers who understand California manufacturing businesses. 

A California manufacturing business M&A broker can make sure you follow the correct steps toward selling manufacturing businesses, from an accurate valuation of a manufacturing company to closing the sale. 

By hiring a professional California manufacturing business broker, you can be sure you aren’t neglecting any step in the sale process. 

A manufacturing business broker can determine the value of your manufacturing business and the best time for it to go on the market to bring the highest price. A California manufacturing broker will also know the requirements of state law. 

Hiring a manufacturing broker will save time and money and give you peace of mind that you’re putting your business in good hands.

Next, let's take a look at a valuation question that a lot of manufacturing business owners ask: How much is my company worth? 

If you are a retiring business owner looking to exit your lower middle market manufacturer in California, here are six tips to get you started:

1. Don't wait until the last minute to start planning your exit. The process of selling a lower middle market manufacturing business can take a long time, so it's important to start early.

2. Have a clear idea of what you want to get out of the sale. Know your goals and what you're willing to negotiate.

3.  Know what's your company's worth. This is an essential step to take when planning to sell your manufacturing business in California.

4. Choose the right type of buyer. Not all buyers are created equal, so do your research and find the right one for your business.

5. Be prepared for a lot of due diligence. M&A buy-side due diligence is when buyers will want to know everything about your business, so be ready to provide documentation and answer questions.

6. Be flexible with the terms and conditions of the deal. It's important to be open to negotiation to get the best possible deal for your business.

Rogerson Business Services, also known as, California's lower middle market business broker is a sell-side M&A advisory firm that has closed hundreds of lower middle-market deals in California. We are dedicated to helping our clients maximize value and achieve their desired outcomes. 

We have a deep understanding of the Californian market and an extensive network of buyers, which allows us to get the best possible price for our clients. We also provide comprehensive support throughout the entire process, from initial valuation to post-closing integration. 

Our hands-on approach and commitment to our client's success set us apart from other firms in the industry. If you consider selling your lower middle market manufacturing business, we would be honored to help you navigate the process and realize your goals.

If you have decided to value and then sell your lower middle market manufacturing company or still not ready, get started here, or call toll-free 1-844-414-9600 and leave a voice message with your question and get it answered within 24 hours. The deal team is spearheaded by Andrew Rogerson, Certified M&A Advisor, he will personally review and understand your pain point/s and prioritize your inquiry with Rogerson Business Services, RBS Advisor.

Go to the next article: Part of tips to selling manufacturing business in California series ->