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5 Ways to Maximize the Value of your Machine Shop

5 Ways to Maximize the Value of your Machine Shop

Posted on September 07, 2020
If you are looking to hire a business broker and sell your machine shop business, then you want to maximize the value of your business.† Below are five tips to help you to sell your business for the highest offer possible.

Get certified
Customers are looking for reliable machine shop business to buy.† The numbers behind a business only say so much.† Thus, consider getting certifications before selling your machine shop.† The ISO, or the International Organization for Standardization is a reliable organization that offers certifications for businesses that meet high specifications.† By investing in certification, you are investing in the salability of your machine shop.† Consumers are more likely to pay a higher price for a certified machine shop.

Make sure your machines are up to date
Technology is ever changing, and it can be hard to keep up.† However, it is crucial that machine shops stay up to date.† Advanced machines will not only improve efficiency and productivity for your business, but they will also be more attractive to buyers.† In addition to housing technologically advanced machines, ensure that you are maintaining your machines.† Remember: a little maintenance goes a long way.† Buyers are heavily influenced by the quality of the machines in your machine shop, so ensure that they are well maintained and up to date.

Have a variety of customers, not a variety of specialties†
There is a huge difference from a machine shop that makes $1,000,000 from 3 customers, and a machine shop that makes $1,000,000 from 100 customers.† Buyers are willing to pay a higher price for the latter because the risk of losing customers is mitigated.† However, it is not smart to come by a variety of customers through a variety of specialties.† Your machine shop should be focused on a few niches in the marketplace, not a dozen.† This allows you to better target the marketplace and obtain customers who will buy your products at the best volume rate.† Your business broker will take the customer base and the specialties of your business into consideration when valuating your business.

Donít expand before youíre cost efficient
It is tempting to buy machine after machine. More machines mean more money, right? Not quite.† If the machines you have are not yet cost efficient, consider waiting before buying a new machine.† Expanding prematurely can cause long term or even permanent damage to your business.† Concentrate on steady gains and be patient.

Be aware of competitors
This is true of all business, but it holds especially true for machine shops.† To maximize value, try and separate yourself from the competition.† Offer a niche that they do not offer.† This will attract customers that are looking for the service that only you offer.† In addition, as the economy shifts, be aware of the shifts in your competitors.† If they lower prices, consider doing the same.† If they accelerate their production rates, consider doing likewise.

Machine shop businesses are attractive to many buyers.† A competent business broker makes selling your business easier, and for the highest price possible.† By following the tips in this article, you are setting yourself up for a successful sale of your machine shop business.