Project Equity reposted this
How can we avoid a succession crisis within manufacturing? Over half of all private business owners in the US are 55 or older, according to Project Equity. In manufacturing, the gap between retiring baby boomers and potential successors is even more glaring. Many manufacturers don’t have a son or daughter interested in taking over the family business. And without a succession plan, small business manufacturers are left with few options when it’s time to retire. Many companies simply shut their doors and liquidate their assets. Remaining employees are often laid off. One way business owners can avoid this is by strategic planning and spending more time thinking 5+ years out. This way, owners will have time to identify top talent and focus on training/ up-skilling that individual as they slowly remove themselves from their operation. By delegating more, the trainee will gain experience running more aspects of the business. This is a win-win solution, as it will also free up the owner’s time so they can gradually phase out of the business. A little forward-thinking and preemptive training can go a long way in leaving your company in competent hands and maintaining your legacy. Next post - "How The Manufacturing Succession Crisis Creates Tremendous Opportunity for Younger Generations"
Florian Heike
1mo
Liquidation is not necessarily the only option. I have seen successions where the previous owners identify capable and experienced junior staff that take over the business and who are given loans to acquire the business with a repayment period of 5 to 10 years. The truth is that the sales price is often only 3 to 4 x Ebit but previous owners may still play a role as consultants on the way out.
Andrew Forbes
1mo
I’m going to try to buy a few of them :)
Thomas Fowler
1mo
Sounds like I4.0 and Ai will struggle a bit more if this crashes. Hope not. Have to have manufacturing to move forward.
Chris Bielawski
1mo
excellent topic
Buffy Hall
1mo
Great information! Thank you for sharing!
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1moUnless you have $1million Ebitda and consistent tax returns for 3 years, you're going to nees to just close and auction your equipment. There are some investors who look at small market deals $500k-ish range but they are rare and again you better have rock solid tax returns and growth and no massive customer concentration.