Beyond the headlines, California manufacturers have several advantages over those in other states and countries. Here are some reasons why now is the ideal time to sell a California manufacturing business.
There’s a lot of talk about manufacturing in the news, ranging from trade and tariffs to other current events, such as the attempt to contain the spreading coronavirus.
What it all means is that there are some great opportunities for domestic manufacturing companies. There’s no better place for these companies than in California.
If you’re looking to value and sell a California manufacturing business, now could be the time.
Andrew Rogerson is a certified business broker based in Sacramento, California. Call Toll-Free at (844) 414-9700. If you prefer, email him at support@rogersonbusinessservices.com. Andrew services the whole state of California.
World Trade and Tariffs
The current trade situation internationally is uncertain at best, and many companies are turning to reliable domestic manufacturers. This is partly because the transportation of goods and tariffs can create costs that must be passed on to consumers. This can take a company from being competitive to being outside the budgets of its clients and customers.
This offers an opportunity for those who manufacture domestically, who can offer the same products as their competitors overseas without the same price uncertainty, shipping costs, and possible supply chain disruption.
This is especially true in California, where being located near tech industries like those in Silicon Valley makes these businesses very appealing to both customers and potential business buyers.
Location, Location, Location
This brings us to location, one of the most vital parts of any business. Many industries call California home, including those in medical robotics and healthcare advancements, high-tech and startups in Silicon Valley and San Francisco, as well as other companies throughout the state.
We’ve helped sell manufacturing companies, ranging from medical robotics manufacturers to those that manufacture architectural structures, and all of them have a unique advantage due to their excellent location in California.
Many businesses in our state need manufactured products, ranging from the items they sell to their customers to parts for their plants and equipment, which are unique to their industry.
Being able to source these locally and sustainably is essential. This makes the manufacturing industry in California both appealing to potential buyers and a lucrative business opportunity.
Qualified Employees
Your company is only as good as the people who work for you, but here in California, we have some of the most qualified employees in the world. Universities like Cal Tech and USC produce graduates ready for the high-tech and fast-paced manufacturing industry. Employees come to California for these very opportunities from places as far away as Korea, Japan, and even parts of Europe.
Due to this talent pool to choose from, your company can attract some of the best employees in the world. That makes selling your company even easier. The buyer can rest assured that there will be no shortage of skilled workers to continue making your company a success, even under new ownership.
Buyers look for companies that are healthy, growing, and in a stable and growing industry. Your California manufacturing business fits all of those categories.
Available Technology
The proximity of California manufacturers to Silicon Valley means that leading-edge technology often becomes available in California first. This means companies have an opportunity to be on the leading edge in developing processes and implementing more efficient procedures, simply because of their current location.
This means your manufacturing company will not only be more appealing now, but it also has the potential to remain more appealing going forward. Your buyer will know they can leverage the relationships your company has built to advance their new company to the next level, making it more profitable.
This simply means they can potentially recoup their return on investment quickly, something every business buyer looks for when making a purchase.
Sustainable Opportunities
California offers another advantage over other states. Sustainability and environmental protection are more advanced and regulated in California. While this presents some challenges, it also means there are opportunities to adopt green initiatives, utilize sustainable energy sources, implement recycling programs, and more.
These can be used in the marketing of your business to both clients and buyers, as they should. Your commitment to the environment sets you apart, and studies show that consumers are willing to pay more for sustainable products and for companies that are more involved in protecting the world we live in.
Business buyers also appreciate the benefits of being associated with a company that already embodies these values, and your business broker can help you highlight these advantages to potential buyers.
Challenges in Selling a California Manufacturing Business
All these positives don’t mean there aren’t challenges in selling a California manufacturing business. It’s best to be honest about these and let your buyer know about them upfront. Failing to disclose important information can jeopardize your business sale. Here are a few examples.
- California Regulations: Environmental and other regulations are stricter in California than in other states. While this is beneficial for consumer and environmental protection, it does make it more challenging for some businesses to operate. Be sure to inform your buyer about the regulations that apply to your industry.
- Higher Wages: Typically, wages are higher in California than in other places. This is in part due to a higher minimum wage for even entry-level positions, but it is also due to the high cost of living. With unemployment rates low, a manufacturing business may need to offer higher wages and better benefits to attract the best employees from its competition.
- Taxes: Tax laws differ in California from those in other states, and it is a good idea to remind your buyer, especially if this is the first business they have owned in California, that it is essential to talk to a business broker or financial professional about the way they structure their business and the way the sale of your business is set up.
Are you ready to sell your manufacturing business in California?
When you’re ready to sell your manufacturing business in California, call or contact Andrew at Rogerson Business Services. He’s helped business owners successfully value and sell their manufacturing businesses in California for several years, and he’ll put his experience to work for you.
From a business valuation that will help you determine how much you can expect to get for your business to make sure everything is complete at the time of closing, Andrew Rogerson can help you every step of the way. If now is the best time for you to sell, please give us a call today.
Hiring a business broker specialized in California’s manufacturing industry is a must-go route.
Andrew Rogerson is a certified business broker based in Sacramento, California. Call Toll-Free at (844) 414-9700. If you prefer, email him at support@rogersonbusinessservices.com. Andrew services the whole state of California.