Reconcile the order book with the earnings
Separate shipped sales from open orders and quotes. Explain whether backlog depends on repeat customers, approved supplier status or work that can be cancelled.
Customer concentration deserves a direct conversation. Show several years of customer revenue so a buyer can see whether a temporary contract dominates the numbers.
Give the equipment a practical record
Match the fixed asset list to the floor. Note financed equipment, maintenance history and assets no longer used. A stale balance sheet creates avoidable diligence questions.
Depreciation is an accounting expense, but worn machines still need cash. Explain expected replacement spending before treating depreciation as a full earnings adjustment.
Show who keeps production moving
Document estimating, quality checks, scheduling and purchasing. A capable supervisor can reduce the risk of a buyer losing your personal knowledge at closing.
Review building power, lease options and assignment terms early. A buyer who cannot keep the facility may see a very different business value.
Prepare the evidence before negotiating the price
A manufacturing valuation should reflect replacement spending as well as earnings. Your CPA can help distinguish accounting adjustments from costs a new owner will still face.
- Document Your Earnings Before a Business Valuation
- Prepare Your Lease for a Business Buyer
- Compare Cash at Closing With a Seller Note
Request a private valuation introduction when you can explain the shop’s customers, production team and current financial picture.