I’m thinking of buying an existing an existing manufacturing business, I’m needing advice on how to attain financing, and how to value the actual business and assets? (Buildings, equipment, employees, and existing business or customers)

Commercial loan is obviously one option. I also wondered if the current owner would do an owner finance deal?

I’ve been an employee all my working career, I’ve never been self employed or a business owner, I know a lot of you have started, bought, and sold businesses. Just wondering what my best route would be, thanks Robinhedd

Message me, this is what I do now

Sweet! Thanks Todd, I’ll shoot you a message in a hour or so.

Owner finance if the rates are o.k. if not you'll need collateral and that will be tied up until loan is paid off

I’d make sure the existing phone number is included in the deal.

Ask for financial info for a couple of years to be sure it's turning a profit above all expenses.

And a non compete from past owners

Pay the experts for anything you don't have expertise in yourself. Real estate, equipment, and going concern values can all be different, and may take different people to value them. A real estate appraiser probably doesn't know much about how much a (surveying; plumbing; manufacturing) business is worth. Some industries sell on multiples of earning far different than others.

A non compete in AL bascially isn't worth the paper it's written on. They are only enforceable if you can prove that your business has been harmed by them in their new business venture. Within a year of us buying our business, the old owner moved down the road about 1/2 mile, added on a shop and told the world he was going to put us out of business. What caused that? I caught him using our Tax ID number to buy parts with to work on trucks at his house that he was then selling. I should have had him prosecuted for tax fraud but didn't. For the "putting us out of business" thing........ The building he moved to was bulldozed to the ground today.

If you buy the business, but everything. All rights to the name, trademarks, customer lists, computers, website names owned by them, EVERYTHING.

You'll need a good lawyer.

Get his books and take them to a different accountant. There are countless ways to valuate a business. Good luck on finding a method that you and the seller agree on. You won't find 2 accountants that agree on a method.
Our business was dead when we bought it, so we didn't buy a business, we bought assets, equipment and property.

Regarding accountants. Don't be hesitant to "fire" your firm if they don't do what you want them to do.

The right lawyer will write up a legal standing non compete. Trust me

Yup, know a feller well who bought a business and had a non-compete clause . Feller he bought from went back into the same type biz , my friend sued him and lost. Jackson County jury strikes again.

Agreed, lawyer up. Non competes don't mean crap in Alabama and there is case law backing that. Non-solicits can work but have to be drawn up the right way.

Get a good accountant and a cost accountant since its manufacturing. What is the remaining life cycle of the equipment you are buying? Valuations of equipment in current state and understanding of past production costs and a projection of your future production costs based on increases in raw materials, etc. How many employees? I would talk to Brandon about your Commercial Insurance costs! Things like CGL, commercial Property, Employee Dishonesty, EPLI, Workers Compensation, etc. I would talk to Brandon and understand your insurance costs before pulling the trigger. What are your Workers Compensation costs and is your industry one that is blackballed forcing you to use a PEO or the state?

You got one in mind?

Hmmmmm. Hahaha.

I’ve never bought a business but always thought if I did, I’d get a trustworthy accountant to go through the records with a fine tooth comb. Don’t think you can do it yourself. I know firsthand about a business that was purchased and the seller “cooked the books.” If I’m ever buying, I’m calling Jerry Rowe at MDA. He’s an elder at my church and has been a CPA forever.

Owning a business is not for the faint of heart. You have to be willing to work longer, harder, & smarter than anybody else on the payroll 24-7/365. One thing to be cautious of going into it is many businesses don't come up for sale unless they are either unprofitable or unsustainable. There are occasions where owners are just ready for a change of scenery but rarely will someone willingly turn over the keys to a truly profitable enterprise. Having said that, good luck with your venture and may it be a true blessing to you and your family.

I would strongly look at leaving your job and opening your own before buying.

Owning my own business has been extremely rewarding for me in so many ways. I love it and its not something I EVER plan on retiring from, selling, etc. Its not even about the money. I have everything I want. Its about playing the game and winning, all the time, every day.

The fact that I built it from nothing gives me a great sense of pride. Its really hard to describe.
I dont think being born into it or even buying it would be anywhere close.

I would only place value on the utilization of the saleable assets at a production rate you believe is capable based on the average of the historical, optimum, and most probable levels.

The salvage value of the hard assets (buildings, equipment, real estate, etc.) is only important for the exit strategy.

Find the net present value of the future cash flow and you have what it is worth to you. Be sure to include your salary in the analysis.

What kind of manufacturing business?