Planning to Sell Your Michigan Manufacturing Business? Get The Best Price with These 5 Steps
Whether you're planning for retirement, a strategic exit or a new venture, maximizing the value of your manufacturing business before listing it can dramatically impact your final sale price — and how fast the deal closes.
The best time to start preparing your business for sale is one to two years before listing it. Whether your exit is near the horizon or a consideration, small steps today can lead to a much more profitable tomorrow. Here are five steps you can take now.
1. Clean Up Your Financials
A buyer will see your books and rely heavily on financial statements to assess a business’s profitability and growth potential. If your books are disorganized or incomplete, it raises red flags and can lower your valuation.
Start by:
- Cleaning up your financial records: Ensure accurate, up-to-date profit-and-loss statements, balance sheets and tax returns
- Separating personal and business expenses: Blurring the lines makes it harder for buyers to assess true profitability
- Documenting cash flow: If your business relies on significant cash transactions, ensure they’re properly recorded
MBB’s valuation process includes a thorough analysis of your financials, so having them in order ensures we can present an accurate and compelling case for your business’ value.
2. Strengthen Key Operations
Buyers are looking for manufacturing companies that are scalable, efficient and not overly dependent on the current owner.
This means:
- Documenting processes and procedures
- Delegating responsibilities to a strong management team
- Investing in systems that boost productivity or traceability
An efficient shop floor, lean inventory and consistent production schedules tell a positive story.
3. Highlight Your Competitive Advantages
Take stock of what makes your manufacturing business attractive. Identify if you have:
- Long-term contracts
- Proprietary processes or technology
- High customer retention
- Certifications like ISO or ITAR
These differentiators can be emphasized in your confidential marketing package to justify a higher asking price.
4. Review Your Equipment and Assets
Ensure your equipment is in good working condition and properly maintained. Include a detailed equipment list and consider cosmetic upgrades — sometimes a fresh coat of paint or a clean facility tour makes all the difference in buyer perception.
Also, clarify ownership: Are the assets owned outright, under lease or financed? Buyers prefer a clean structure that avoids complicated transfers.
5. Understand Market Value and Get Help
Many owners overestimate — or underestimate — what their business is worth. An independent business valuation from a broker familiar with the Michigan manufacturing market is a smart first step.
Selling a manufacturing business is a complex, highly confidential process. Partnering with a broker experienced in manufacturing sales ensures you don’t leave money on the table — or risk the deal falling through.
About the Author
Nadir Jiddou is the owner of Michigan Business Broker (MBB), connecting Michigan business sellers with buyers for more than 18 years. He may be reached at nadir@mibizbroker.com.
Michigan Business Broker is an MMA Basic Associate Member and has been an MMA member company since November 2024.