Are you running a metal fabrication business or looking for ways to increase your metal fabrication business valuation? If yes, then you have come to the right place. The improvements for a business should never stop, regardless of your business’s size. Your continuous efforts result in the boost of your company’s metal fabrication and reduce its costs as well. Additionally, applying the best practices aid your business to maintain a smooth workflow and increase profitability. Here are the key points to consider for improving your business valuation:
1. Improve Cash Flow to Owner
When we value your business, we recast the profit and loss to calculate Cash Flow to Owner. Simplified, Cash Flow to Owner is taxable income + depreciation + amortization + owner compensation + owner perqs + non-recurring and market adjustments. Cash Flow to Owner is the SINGLE BIGGEST factor in driving the metal fabrication business valuation. No matter whether you want to sell a business or sustain it, improving the CFO can help you in all ways. When you stream your operations, you are more likely to increase your productivity and profitability with reduced costs. Always find ways to enhance your manufacturing processes, improve the workflow and minimize waste. To increase your efficiency, you need to look at and adhere to manufacturing principles and invest your money in modern tools, equipment, and technology that will certainly improve your efficiency.
2. Increase the Number of Service Offering to Include Recurring Revenue
Expand your product and services to cover a wider range of customers and, specifically, look for opportunities to introduce (or increase) recurring revenue. Perhaps, try to include monthly subscriptions, quarterly service calls, preventative maintenance visits at fixed fees, and technical support. Look for ideas from other markets and industries. Doing this can increase your metal fabrication business value by smoothing revenue and adding predictable income.
3. Invest in Metal Fabrication Workforce Development
Getting to a place where you work ON your business versus IN your business is accomplished by investing in your Employees. They are your most valuable business asset. Investing in their training and skill development programs will improve their knowledge and capabilities, allowing you to move towards absentee business ownership. A company in which the owner indirectly drives business success is always worth more than one in which the owner is directly involved in every customer, supplier, operation, and financial aspect. In addition, build a culture that encourages your employees to act as owners. You should understand that well-motivated and highly skilled employees can make tremendous contributions toward your company’s growth while increasing customer satisfaction = higher cash flow to owner = greater business valuation.
4. Build Solid Relationships with Your Suppliers
Suppliers play a crucial role in the growth of your company. One should always try to build a solid partnership with suppliers. Suppliers can make or break your business during times of supply chain interruptions. If you’ve been nickeling and diming them to death, they are going to take care of your competitors first. Negotiating long-term contracts with suppliers can help you with favorable terms and supply stability. Similarly, when you build a strong relationship with your suppliers, it provides you with plenty of additional advantages such as better pricing, access to new technologies, on-time delivery, and many more.
5. Apply Effective Marketing Strategies
Next in the queue is applying an effective marketing strategy. In this digital era, no one can afford to ignore utilizing the best marketing strategies. One can utilize the best marketing strategies to increase business visibility. Get the most out of both marketing ways, whether it’s traditional or digital marketing. Adapt the ways to reach a wider audience. Showcase your services, product, expertise, and past project through your website and independent reviews. Also, utilize social media and make a robust presence. Make continuous efforts to sustain your previous customers and build new ones.
6. Technological Advancements
Keeping yourself updated with the latest technology in the metal fabrication industry is also an essential part of any company today. Utilizing the technology with automation, computer-aided design, and robotics will enhance accuracy and reduce labor costs. Along with that, it will also boost the production capacity of your metal fabrication business. One should also be careful when choosing the technology for their business; choose relevant technology that simplifies process control and keeps you competitive.
7. Customer Satisfaction.
Customer satisfaction is one of the most crucial factors. You need regular efforts to deliver world-class services to earn customer satisfaction. You can need an engagement with your customers in order to understand their specific needs and requirements so that you can offer them tailored solutions and fulfill their expectations. When you successfully make customers satisfied, especially with services that broadly fit their systems, they are more likely to become “sticky” customers.
8. Establish and Maintain Robust Financial Records
Sound financial management practices create stability and profitability. Your financial record should be accurate, and you should have the ability to effectively manage your cash flow and reduce debt. Matching financials and tax returns are important to your business valuation and more important when you you’re your business to strategic buyers and investors.
Increase and Maximize Your Business Valuation!
There are many factors that affect and drive manufacturing company and metal fabrication business valuation. We’ve shared a few and welcome the opportunity to speak with you about the multiple factors that play a vital role when determining the value of the company. Every business (and industry) is unique and has its own factors that may influence a business valuation in different directions. We hope the above-mentioned points will help you increase the value of your business. If you want an independent, third party company valuation, then please confidentially contact us at Adam Noble Group, LLC. We cover a wide range of industries, including screen printing business valuation.
During 3 decades of M&A service, Jeff Adam has successfully completed the sale of over 700 businesses and advised or completed 1,000’s of business valuations and exit plans. An entrepreneur in his own right, Jeff has started and grown 12 companies in fields including international finance, B2B services, business valuation, construction, screen printing, Mergers & Acquisitions, engineering, and manufacturing. Jeff has donated his time as a distinguished speaker at numerous national & international conferences since 1977 covering topics such as environmental services, engineering, media, craft breweries, exit planning, business valuation, charitable giving, management, business brokerage and M&A fields.
Jeff is President of Adam Noble Group, LLC, a national M&A Advisory firm, professionally valuing and confidentially selling profitable businesses owned by exit-motivated business owners to qualified strategic, corporate, private equity, partners, management, and first-time buyers. Jeff establishes rapport, builds trust, and educates business owners in the steps to meet their goals as they prepare and achieve the discreet, confidential exit of their business. Jeff exclusively represents sellers of $1M-25M value enterprises and endeavors to transfer their businesses to qualified, capable acquirers who will build upon the seller’s vision, goals, culture, and history. Jeff maintains lifelong repeat and referral relationships with sellers, their acquirers, and service providers.
Adam Noble Group has multiple M&A and business broker specialties: Manufacturing, Defense Industry, Oilfield services, Construction trades, Craft Breweries, Partnership Buyouts, Manufacturing, Service, and Wholesale Distributors.
Our M&A advisors and business brokers are all multi-industry entrepreneurs who have successfully exited their own companies. Jeff has walked in your shoes! Jeff wants to put the BIGGEST CHECK of your life in your pocket! Please contact Jeff, and he will confidentially answer all your questions.