How To Know When To Sell Your Manufacturing Company: 4 Signs It Is Time

The thought of selling your production business can be exciting. After all, you’ve spent years building it; now is the time to reap the reward for all your hard work.

But how do you know you’ve reached the end of the line? When is the right time to sell a manufacturing business?

That’s the topic broached in this post. We look at some of the situations and circumstances that could mean that it is time to let it go and move on to new projects. 

1. Desire For A New Challenge

One motivation could be an intrinsic desire for a new challenge. You might want to step things up a notch and move into a new area, perhaps because you feel passionate about it. Perhaps you’re a creative person, or you want to focus on a new business idea that really works. 

If you’re considering selling your production company, you could potentially free up the capital you need to pursue something new. The money you receive might be an excellent way to focus your attention on new projects, without worrying about personal finances. It may even be that you want to manufacture something different, look into automation or frequency inverter products to create something new, or that you create a business with more scalable opportunities.

2. Declining Profit Margins

You might also want to exit the manufacturing sector if you see persistent declining profit margins, despite your best efforts. Lower profits are often an indication that an industry is becoming commoditized and it is a race to the bottom. 

Profits can fluctuate from year to year. But if you and your competitors are seeing the same thing and you can’t see a way through, it may be time to pass the business over to managers who can deal with these sorts of issues. 

Declining profits may mean that you have to sell for less than you hoped. But if you get ahead of the trend, then you can still walk away with more money than most. 

3. You Achieved What You Wanted To Do

Another reason for exiting the production industry is that you achieved everything you wanted to do. If you completed all your milestones, it could be a sign that you’re ready for change or something new. Selling might be the next step in your journey as a business leader. 

Sometimes, if something is done, then it is naturally the time to move on to something new. You gave a lot of time to it, but it is now an opportunity to try something else. 

4. You’ve Received A Large Buyout Offer

Sometimes you can be happily running your company but then face a large buyout offer. When these occur, it can give you time to pause and reflect, wondering what you will do with the money. 

If the offer is high enough, it usually makes sense to sell. If the production business is simply a method for making money, then passing it on to new owners makes sense. However, if it is part of a larger personal mission, then hanging onto it could be the better choice. 

When offered a large amount of money for a business, think about your long-term goals. Ask if it aligns with them.