Likely Buyers
- Larger shop or supplierWants capacity, certifications and a seat with prime customers it does not have today.
- Private equity backed platformLooks for shops with steady earnings that can join a group of similar suppliers.
- Experienced operator with SBA backingKnows the work and needs a shop whose machines and people can run without the seller.
Cash flow sets the price
Buyers value a shop on the cash flow left after the owner is paid, then apply a multiple. Most Main Street companies sell for about two to three times that figure.
Shops with managers in place and larger profits can be priced on EBITDA, where a market rate manager is deducted first.
Equipment cuts both ways
Machines carry value, but old ones need replacing. Buyers often refuse to accept all depreciation as an add back, since the shop will have to spend on maintenance and new tooling.
A tidy asset list with ages, hours and service records helps your case. Surprises in diligence help the buyer lower the price.
Customers and certificates
Many shops depend on a handful of buyers. When the top few accounts make up more than about a fifth of sales, expect a discount near that share, or a buyer who walks.
Quality certifications also matter. Ask your quality manager and certifying body what happens to them in a sale, so the buyer does not learn it late.
Shops doing export controlled work may have notices to file with the federal government around a change of ownership. Have counsel confirm before you sign.
People who run the floor
Skilled machinists are hard to hire. A buyer wants to know who programs the machines, who inspects the parts and whether any of them would leave when ownership changes.
Before you list
- Three years of statements that match your returns
- A machine list with age, hours and condition
- Customer sales by year, so concentration is clear
- Your building lease or deed, with any renewal terms
Read add backs buyers accept next, then find your price range. If you own the building, the county rendition guide covers the equipment tax filing.