Many manufacturers would never think of selling their companies. They may be sustaining a family tradition, or looking to build one for future generations. But for some of these leaders, an opportunity to sell will appear anyway — especially for manufacturers with strong financials, solid customer bases, and innovative products.
Unfortunately, the “I-will-never-sell” mindset can leave owners flattered but flustered when a buyer knocks on the door. Because they’ve never considered an exit, they haven’t prepared their companies for merger and acquisition (M&A) activity.
This is a critical mistake, as selling and planning is a process in its own right, and many things take place before the actual sale. Preparedness can (1) identify if a sale is the right choice and (2) prepare the company to attract the right price. Yet just half of SMEs seek outside experts for strategic planning in readying their companies for M&A. Here’s how to get started now:
Assume a sale is possible: Every manufacturer owner should know the value of his or her organization to others — in part, to review the organization’s current strengths and weaknesses. Kicking the tires on your own company can open your eyes, stimulate innovation, and can lead to improvement initiatives.
Conduct a formal business valuation: Identify all assets — facilities, equipment, proprietary software and business systems, intellectual property, etc. — and work with accountants or advisers to value them.
Identify M&A roadblocks: This step pays dividends even if you never sell. Rigorously assess areas that require improvement, such as operational problems (e.g., EHS, plant efficiency, equipment reliability, product quality) or market issues (e.g., customer defections, poor brand recognition, aging product portfolio). This process will also identify and resolve legal and financial conditions that could scare away buyers.
How much is your company worth? More importantly, what are you doing to make it worth even more — whether to a buyer, or you?
One remarkable thing about the list is that it rarely changes. The order may change but the top cited standards typically don’t change. Top 10 Sited Safety and Health Violations: 501 - Fall Protection 1200 - Hazard Communication 451 - Scaffolding 134 - Respiratory Protection 147 - Lockout/Tagout 178 - Powered Industrial Trucks 1053 - Ladders 305 - Electrical, Wiring Methods 212 - Machine Guarding 303 - Electrical, General Requirements Three of the 10 sited standards are directed at the construction standard (1926) while other fall within the general industry (1910). It should be noted however that the general industry standard also has fall protection guidelines. Year after year, inspectors see the same on-the-job hazards, any one of which could result in a fatality or severe injury. More than 4,500 workers are killed on the job every year, and approximately 3 million are injured. By understanding these regulations you can improve your safety program and prevent injuries. Give me a call if you have any compliance doubts, or want to review OHSA regulations. Gwido Dlugopolsky at 216-391-7766 or firstname.lastname@example.org
Why does it take a NASCAR pit crew only 15 seconds to change four car tires when it takes people like you and me minutes? The answer is simple SMED. Single Minute Exchange of Dies, or SMED, is a process for reducing the time it takes to do equipment changeovers. Using the principles of SMED you should be able to perform any changeover in your facility in under 10 minutes! The SMED process is simple – convert as many changeover steps as possible to “external”, meaning they are done while your equipment is still RUNNING, while simplifying and streamlining the remaining steps. SMED is broken down into the following 3 Steps: Separate Convert Streamline We found this article to be very helping in explaining the SMED process in more detail: LEAN PRODUCTION - SMED A good first step to achieve this level of SMED efficiency would be to run a kaizen event at your facility to standardize (5S) your tools and supplies. Doing this alone will help you achieve 40% to 50% greater efficiency. Once the “low hanging fruit” is gone, you can still reduce setup times another 20% by practicing more advanced SMED principles.
The secret to closing any sale is to reduce uncertainty in the buyer and replace it with confidence in YOU, your PRODUCT/SERVICE, and your COMPANY. Step 1 – Confidence in YOU Someone buying from you wants to be able to fundamentally connect with you on a human level and feel confident that you’re an expert in what you’re selling If you’re selling paperclips, be an expert in paperclips If you’re selling design and engineering related services, be an expert in design and engineering related services Focus on addressing the problem, not the solution….MEANING you already know you have the solution, connect with the buyer by being an expert with the problem he/she is facing. Prove that you know the problem and all aspects of the problem like the back of your hand. Step 2- Confidence in the PRODUCT/SERVICE you are selling Someone buying from you needs to trust the product/service you are selling will solve their problem. It’s your responsibility to deliver a solution and the benefits associated with it. Basically you need to “Hit a Homerun” communicating this message. Tip – Use Success Stories: Share with the potential buyer examples of your product/service solving problems and delivering value for