Despite the fact that the manufacturing base in America and its presence in NJ in particular has been shipped overseas, many prospective buyers still consider getting into manufacturing. The single most important attribute that you must have when buying a manufacturing business is prior experience in this sector. This is not the type of business that you can easily or quickly learn after you take it over.
What to Consider When Buying a Manufacturing Business
- What assurances are in place that the company can continue to manufacture domestically?
- Does the company compete on price, quality, or service or have a process/product exclusive to them?
- Are there any customer concentration issues?
- Do you have access to additional funds for future capital expenditures? On this note be sure to adjust the Owner’s Benefit downwards to accommodate future capital expenditures.
- Is there any pending technology that could render your product or process obsolete?
- Can the client base be expanded? How?
- Can you add new products to your offering?
- What is the condition of the equipment? Is it the latest technology or antiquated?
- What does the owner do each day?
- Are the systems up to date to manage the manufacturing process?
- You will want to learn about the typical “Work in Progress” levels since this almost always becomes an issue in closing the deal.
- What sources does the company use for raw materials? Will they continue to sell to you and on
- What trade terms?
Despite the fact that we are shifting to a serviced based economy, there will always be certain industries and products that will require domestic manufacturing.
Interested in buying a manufacturing business in NJ? Then please call Fred Niemann toll-free today at (855) 376-5291 or email him at email@example.com to schedule a low cost and convenient consultation.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, New Jersey Buying a Business Attorney