Whether you are ready to retire or start a new venture, you don’t want to leave any money on the table when selling your steel business. It’s a complicated process, but not impossible. Here’s how to get the best price when selling a steel industry business like yours.
Manufacturing Remains Relevant and Profitable
The manufacturing industry remains one of the most relevant and profitable industries in the United States. Metal fabricators, building material manufacturers, and other businesses within the steel and metals industry also play a large role in the manufacturing sector. Aviation, automobiles, construction and other business sectors rely on steel and metals businesses, which makes it a good time to sell a steel industry business. While there are many factors in determining the true value of your business, here are several areas to consider as you prepare to sell your business:
- Customer relationships: Evaluating your existing customer relationships is a good exercise at any time, but especially when selling a steel industry business. Customer relationships are often loyal to a particular person, not necessarily a business. A potential buyer knows that there is a risk for customers to leave at any time. Having a single customer tied to a significant percentage of revenues can be a red flag for a buyer. Balancing the customers and revenues; as well as transferring important relationships to key sales and service representatives can alleviate this concern before the transition between seller and buyer begins.
- Vendor and supplier relationships: Inventory and relationships with vendors and suppliers can be as important as customer relationships. Too much inventory ties up cash flow and unreliable suppliers can damage your reputation. A strong supply chain and reliable suppliers can be a plus to a potential buyer. You can manage these relationships within modern business management systems and assign importance, reliability and other variables to the vendors and suppliers you use.
- Equipment status: Evaluate the condition of the tools and equipment you have on site. The quality of your machinery could be either a bonus or detriment to a potential sale. It may be a good time to replace outdated machinery that requires constant maintenance with more efficient tools and equipment. Improving productivity in your facilities now could provide a profit boost until it’s time to sell.
- Know the fiscal health of your business: There is no underestimating the value of having your finger on the pulse of financial operations. Understanding profit margins is critical during the course of business and when you are readying your business for sale. Profit and loss statements, customer relationships, assets, suppliers and inventory are just a few of the big-ticket items a potential buyer is going to evaluate. Know the fiscal health of your business by having a modern business management solution in place.
Preparation is the Key to Success
If you are getting ready to sell a steel industry business, preparation is the key to success. Potential buyers will want to see and understand everything that makes up your business including customer and supplier relationships, tools and equipment, business software and systems, and have a thorough understanding of financial operations. Understanding all of these critical moving parts of your business is good for your bottom line today, as much as it can position your business for a successful sale. Contact The Wolcott Group to learn how to get the best price when selling a steel industry business. Our experts will show you how to leverage corporate data and showcase the most profitable and productive parts of your business for new buyers.