When running a modern machine shop, it’s critical to plan for the future. You may not have a crystal ball, but taking steps to increase your shop’s value is always a worthwhile endeavor. It’s especially important if you foresee a transition ahead—whether you intend to sell your shop, change leadership, or something else.
4 Ways to Increase Value in a Modern Machine Shop
When you think of increasing value in your modern machine shop, your mind may go to buying more machines or expanding your services. These initiatives can certainly yield major gains, but for today’s blog, let’s focus on strategies for improving fundamental aspects of your business:
- Fill gaps in leadership. From a buyer’s perspective, a business is much more attractive when all the leadership positions are filled. A robust leadership suite allows thebuyer to transition into the shop without the added stress of filling crucial employment gaps.
- Digitize historical records. Accessing relevant data is much more efficient when all quotes, orders, and customer information is digitized. The more information you can make easy to access, the more value your business will have ahead of a transition. The new owner can step in confidently, knowing that essential data is readily available when needed.
- Diversify your customer base. A diversified customer base is an insurance policy for vulnerable supply chains and other industry disruptions. Suppose you have several customers, but they’re all in the oil and gas industry. Potential buyers or investors may be rightfully nervous putting all their eggs in one basket. A broad customer base across industries shields you from volatility, increasing your value.
- Implement repeatable processes. Once the industry standard in manufacturing, “tribal knowledge” is no longer the smartest strategy for retaining and transferring information. When processes and procedures only exist in people’s heads, it’s difficult for anyone else to step in and do the job at hand. That’s why it’s so important to document this information—ensuring that processes are repeatable and that knowledge is shared and recorded adds value to any modern machine shop.
NTMA Industry Partners Support Modern Machine Shops Through Transitions
If your modern machine shop is preparing for a transition of any kind, NTMA’s partners can support you through it:
- Beanstalk Collaborative Community Wealth is a holding company composed of people who understand small to medium-sized manufacturing businesses. They help shops by creating value before the selling process begins or buying the company and helping to manage it.
- EBITDA Growth Systems is on a mission to help businesses increase their profitability and value. They offer coaching, accounting, and training to NTMA members at discounted rates.
No matter where you see your shop heading, you can benefit from adding value to your business. If you’re hoping to make moves in the near future, you’ll find ample support in NTMA. Join NTMA today to access the resources you need to successfully transition your modern machine shop.