How to Sell Your Manufacturing Business

Posted on Tue, Sep 01, 2020


How to Sell Your Manufacturing Business

Small to mid-sized U.S. manufacturing businesses have become attractive targets for acquisition as more companies want to label their goods, “made in America.” Boomers who own manufacturing companies are ready to exit and move on to the next phase of their lives. Preparation is essential to a successful sale; think about how to sell your manufacturing business before you start the actual process.

Keep it Quiet

Confidentiality is critical to the successful sale of your business. As you begin your preparations, make sure that no one finds out that your efforts are in preparation for a sale. The things you will be doing – cleaning up your facility and records, making sure you are in compliance with all laws and regulations, writing off old inventory, building a strong second tier of management – are all good business practices that should require no further explanation to employees other than that you are always striving to improve your business.

Clean Up

Cleaning up your facility and putting processes in place to keep it clean should be high on your to-do list as you prepare to sell. It’s surprising how important “curb appeal” can be when a serious buyer comes for a site visit (off-hours, of course!). But it’s not just the facility that should be ship-shape, but your record-keeping as well. Owners accustomed to rolling up their sleeves and walking around the plant floor sometimes don’t focus enough on keeping financial and other records in perfect order. Buyers (and lenders) however, will want to see employee and operational manuals, financial records, regulatory compliance records, licenses, etc. all up-to-date and accurate.


Make sure that your business is in compliance with all environmental, employee and workplace regulations. Failure to attend to these items can come back to haunt you even after a successful sale. If, after closing, an issue comes up regarding something that was amiss while you owned the company, it may still be your responsibility. So, it pays to resolve any potential problems before you sell.


A warehouse full of unsold parts and old, unused equipment will turn off prospective buyers. No one wants to buy a business only to inherit a “clean-up” project. Write off and get rid of old inventory, sell or dispose of old, unused equipment and make sure that your facility is organized in a clean and efficient manner.

Exit Plan

Devising an exit plan for a manufacturing business, or any business, requires the owner to consider what role he will have in the business after the sale. Some owners just want to show the buyer where the light switch and keys are and take off for parts unknown! But, normally, a more formalized succession plan is required. Depending on the seller’s desires, the industry knowledge of the buyer, and the strength of the seller’s second-tier management team, post-closing seller involvement can range from as little as two months to as long as a year or more.

Work with Professionals

Your business has many moving parts, and so does preparing for, structuring and concluding its sale. Without professional help, you would have to both run your business and prepare for and conduct the sales process on your own. Keeping your business profitable and attractive is already a full-time job. That’s why you should work with experienced manufacturing business brokers who know how to sell your manufacturing business. They can package and present your business as an attractive opportunity, locate and vet prospective buyers, obtain the strongest price and ensure confidentiality throughout the process.