Despite the fact that the manufacturing base in America, and its presence in NJ in particular, has been shipped overseas, many prospective buyers are reconsidering entering manufacturing. Covid, supply chain disruptions, and inflation have reignited interest in bringing familiarity back to the US. 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 you can easily or quickly learn after taking it over.
What to Consider When Buying a Manufacturing Business
- What assurances are in place that the company can continue to economically manufacture domestically, particularly in NJ?
- Is the company competitive on price and quality, or does it have a process/product exclusive to it?
- Are there any customer loyalty issues?
- Do you have access to funding 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, the physical structure? Does the manufacturing process incorporate modern technology, or is it antiquated?
- What does the owner do each day? What are the time demands?
- Are the systems up to date to manage the manufacturing process?
- What and where do the sources for manufacturing the product come from?
Even as we shift to a service-based economy, certain industries and products will still require domestic manufacturing.
Interested in buying a manufacturing business in NJ? Then please call Fred Niemann today at (732) 863-9900 or email him at fniemann@hnlawfirm.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