Selling a Machinery Manufacturing Business

Most machinery manufacturing businesses sell for a multiple of the cash the owner can take out each year, after adding back one-time and personal expenses. The multiple usually improves when job costing is consistent, repeat work is meaningful, backlog is provable, and the shop is not one breakdown away from late shipments. Start with Rejigg’s free valuation calculator, then pressure-test customer concentration, quality approvals, and near-term equipment spend.

No. Brokers typically charge 5–10% of the sale price for work you can run yourself with the right tools and a clean process. Rejigg gives you what brokers usually control: access to pre-vetted buyers, digital NDAs, a secure data room, and a dashboard to track conversations and compare offers. Start with the prepare-to-sell guide, then run the sale directly.

Many buyers use SBA 7(a) loans to buy profitable machine shops, but lenders are picky about clean cash flow and clean records. Expect questions on customer concentration, job margins, and whether the business relies on the seller to quote, program, and keep customers calm. Lenders also look closely at equipment condition and inventory, since surprises there can crush cash after closing. Rejigg’s SBA loan calculator helps model payments so you can see what price and terms a buyer can realistically carry.

Most machinery manufacturing sales take about 4–9 months from listing to close, assuming the shop can answer diligence questions quickly. Deals drag when buyers discover messy work-in-process, unclear backlog, undocumented quality requirements, or surprise capital spending. If you can show quote-to-actual job history, backlog by release status, and a clean inventory breakdown, financing and diligence usually move faster. Rejigg keeps diligence in one place with a secure data room and tracked requests. Timeline details are in the due diligence and closing guide.

Most buyers ask for three years of profit and loss statements, year-end balance sheets, and recent monthly results. They will also want support for owner add-backs like personal insurance, owner vehicles, and one-time repairs that will not repeat. In a machine shop, expect follow-up requests that tie margin to the floor: job-level labor hours, material, scrap, and outside processing. If you use QuickBooks, Rejigg’s prep guidance pairs well with QuickBooks integration to load financials into a structured data room.

Most buyers value a machine shop based on cash flow, not by adding up the resale value of each CNC. Equipment still matters because it drives capability and risk: constraint machines, control obsolescence, maintenance history, and replacement lead times that can be 6–18 months for certain builds. Keep a current equipment list with year, control, major options, and rebuild history. Put photos and service invoices in a secure data room so buyers do not assume the worst when records are hard to find.

A working capital adjustment is the true-up at closing to make sure the business hands over a normal amount of cash tied up in receivables, payables, and inventory. In machinery manufacturing, it gets messy because work-in-process swings, material gets purchased ahead of releases, and outside processing can inflate WIP at month-end. Most of the time, the clean approach is agreeing on a target based on historical averages, then settling the difference at close. Use negotiation guidance and keep the backup in Rejigg’s data room.

Earnouts are seller payments tied to future results, and they show up when project revenue is lumpy or the buyer is worried about execution after close. For custom machinery builders, earnouts tend to work better when they are tied to objective events like factory acceptance, shipment, or paid invoices. If warranty work is common, define how warranty costs are treated so the earnout does not get argued later. Rejigg’s offer comparison dashboard helps you line up earnout language side-by-side so you can see where the risk really sits.

Buyers usually ask for your top customers with revenue by year, plus the documents that explain how work actually gets released and approved. That can include purchase order frameworks, release schedules, and customer-specific quality requirements that drive first articles or requalification. On suppliers, expect diligence on key material sources and outside processors, lead times, cert handling, and alternate sourcing. Keep real examples, not summaries, ready to share. Rejigg’s NDA gating and data room permissions let you stage sensitive customer documents as a buyer gets more serious.

Customer concentration is not automatically a deal killer, but it changes the questions buyers ask. They want to know if the work is tied to a single program that can pause, whether you will stay on the approved supplier list after a sale, and whether relationships exist beyond the owner. If one OEM is 40% of revenue, buyers look for proof in releases, on-time delivery, quality history, and multi-threaded contacts. Rejigg’s direct buyer messaging helps you pressure-test the concentration story early, before you grant exclusivity.

A non-compete is the seller agreeing not to start or join a competing shop for a certain time and within a certain area after closing. Buyers push for it because customers and employees can follow the seller quickly, especially when the shop’s value is tied to specialized know-how and relationships. What is “typical” varies by geography and deal size, but it usually needs to be long enough for the buyer to stabilize customers and retain key people. Use Rejigg’s negotiation guide to frame scope, and keep drafts organized in the deal workspace.

Confidentiality matters in machine shops because rumors can trigger second-sourcing and key people leaving. A staged approach works best: start with a blind profile, require an NDA before naming the company, then release customer lists and quality packages only when the buyer is credible and engaged. Rejigg supports this flow because buyers are pre-vetted, NDAs are signed digitally, and you control document permissions in the data room. Build trust in steps. See finding buyers for the process.

Taxes depend on whether the deal is structured as an asset sale or an equity sale, and how the price gets allocated across equipment, inventory, and goodwill. For machinery-heavy businesses, depreciation history can make the equipment allocation matter a lot. Inventory treatment can swing the outcome, too, especially if you carry high raw material or WIP. Model scenarios early with your CPA so you do not accept a “good” price that disappoints after taxes. Rejigg helps by keeping offer terms and draft allocations organized so your tax advisor can review cleanly.

Give buyers an equipment list that explains risk, not just a headcount of machines. Include machine type, year, control, major options, what it runs, and major rebuilds or recurring problems. Buyers also look for a maintenance culture: who owns PM, what gets logged, and whether constraint machines get special attention. If maintenance lives in someone’s notebook or memory, capture it now. Upload the list and key records to Rejigg’s secure data room and clearly label the true bottleneck assets.

Many buyers expect a structured transition, often heavier for the first 30–60 days, then lighter support for a few months. The timeline depends on what the owner personally handles today, especially quoting, programming decisions, and key customer relationships. A written plan usually reduces buyer anxiety and can improve terms. Rejigg helps you put the transition plan in writing, track handoff tasks, and keep communications clean in the deal workspace. Details are in transition planning.

Real estate matters in machinery manufacturing because the building can limit what the shop can run. Buyers look at ceiling height, cranes, power, air, floor loading, coolant and waste handling, and whether the layout supports flow and inspection needs. If you are leasing to the buyer, the lease needs to allow equipment moves and upgrades without a fight. If you are selling the building, expect diligence on deferred maintenance that can disrupt production, like compressors, chip handling, and HVAC for the quality room. Keep drawings, utility details, and any environmental paperwork ready in a secure data room.

Buyers focus on issues that can shut a shop down or create a big claim. Common diligence items include machine guarding, lockout practices, coolant handling, waste oil storage, and training and inspection records for forklifts and cranes. They will also ask about incident history and what changed afterward, since a managed system matters more than a perfect record. Keep training logs, inspection checklists, and disposal records organized so you can answer quickly. Rejigg’s data room lets you store these and share them selectively after an NDA.

Yes, but messy books usually mean slower diligence and more conservative offers because buyers cannot underwrite cash flow with confidence. The fastest improvements are separating personal expenses from shop costs, documenting add-backs with receipts or notes, and building a simple tie-out between jobs, work-in-process, and shipments. You do not need perfection, but you do need a consistent story that matches the floor. Rejigg’s QuickBooks integration and structured data room help reduce the scramble. Start with prepare to sell.

In machinery manufacturing, the headline price can be misleading if one offer is heavy on seller financing, earnouts, or a tough working-capital target. Compare offers by cash at close, the conditions required to get paid later, and the operational assumptions baked into the deal, like backlog shipping, approval timelines, and bottleneck capacity. Ask what happens if a key customer pushes out or a constraint machine goes down during the earnout window. Rejigg’s offer comparison view lays out price, seller financing, earnouts, and timelines side-by-side. See negotiate a deal.

Look for buyers who already understand how machine shops really run, including job-cost variance, outside processing risk, approved supplier requirements, and constraint machines. Rejigg is built for that buyer pool. Buyers are pre-vetted, NDAs are handled digitally, and you can run a direct process without paying a broker fee. Share enough specifics to attract the right fit, then use the data room and direct messaging to move fast with serious parties. Start at Rejigg or book time at schedule a consultation.