For many in manufacturing, the time are changing, and quite rapidly.
The pace of technological change means that manufacturers must either keep up to survive, or devise alternative strategies to secure their position in the market.
However, for some, there appears to be a third way: to sell up.
When is the Right Time for Exit?
“The risk in seizing on the sale of your business as a kind of get-out clause is that your business will not be properly prepared for it. Whatever your future plans, whether retirement or a further business venture, you want to maximise your assets.”
The critical issue is to build value in a business before sale. This takes careful, diligent, strategic preparation.
Building value for exit is closely aligned to building a business successfully, per se. The value must become intrinsic to the business, whether selling it or not.
“The ideal time for preparing to exit a business and sell it on is not when you feel you’re on the brink of collapse, or where selling feels like the only option open to you”
Business owners should think instead of building value as the primary objective.
“The right time to sell is then when you have optimised value in your business, so that it is attractive to potential buyers.”
Leveraging the Niche
Even in situations where manufacturers feel challenged by rapid technological advances, they are still in the business of making things.
This fact can form a central strategy for building value.
Manufacturing has been seen as a sector that is slow to adopt to the new realities of a digitalised age, not just in operations but also in how they market themselves. What they can capitalise on, however, is appealing to niche markets.
“You can build value through differentiation. There are more ways to compete than simply trying to stay ahead using technology.”
As with many other business owners, manufacturers can be too close to what they do to gain the necessary perspective to see things differently.
“They must consider all angles, including innovation and intellectual property.”
“What smaller manufacturers may discover, with a fresh perspective, is that they hold certain key characteristics they can use to build more value”
Where innovation is not the differentiating factor, there can still be other aspects to the business which will work in its favour.
“It might be its infrastructure and agility in providing a specific manufacturing solution. It could be a key part of a supply chain, or have potential to open new, alternative markets.”
“The vital thing for manufacturers looking to sell their businesses is not to take a leap into the unknown, or to feel they must quit while the opportunity is there,” Christiane concludes.
If you are a manufacturer that wants a fresh pair of eyes to help you see the potential for building value, where you haven’t seen it before, please contact Biramis Management Partners on 0161 817 8052 or visit biramis.com.