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3 Tips On Buying A Manufacturing Business Post-Pandemic

By Vishal Bharucha, President of VNB Business Brokers, a leading Business Brokerage and M&A Advisory firm.

The manufacturing industry is known for its flexibility and adaptability in any economic conditions. When the pandemic hit in 2020, manufacturers were quick to reshape their business models and adapt to consumer demands. This is why manufacturing businesses are attractive to business buyers not only for their nature of resilience but also for their innate innovativeness. But just like any other industry, manufacturing also experienced some challenges that would forever change the way these types of businesses operate.

In a Systema article, CIM engineer Jim Connett notes that the manufacturing industry is one of the sectors that were greatly pressed in 2020 and will continue to be challenged as entrepreneurs navigate the post-pandemic world. The good news is that the manufacturing landscape is continuously evolving and new trends are emerging. There’s a significant potential for businesses to thrive, and buyers simply need to keep an eye on what the future of manufacturing will look like to understand new growth trends and how to optimize their operations.

Here are three tips on buying a manufacturing business in a post-pandemic world.

1. Invest in business with automation and robotics.

An investment in automation and robotics takes time and financial resources. Identify businesses that have already started implementing or are preparing to implement as this investment in automated technology can drive the business’ future growth strategy and possibly unlock new markets. According to a study conducted by iMarc Group, the automation and robotics market will increase at a projected rate of 17.6% between 2022 and 2027.

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For buyers, it is good to consider a manufacturing business with an already established automated system in place. This way, you will have an innovative yet agile business model without starting from scratch, saving time and financial outlay.

2. Consider mobile manufacturing businesses.

According to the 2020 State of Manufacturing Report (download required), businesses have switched from in-person operations to remote work during the height of the pandemic. This is one tactic that manufacturers implemented to reduce costs and manual resources. However, does it apply in a post-pandemic world?

Fictiv CEO Dave Evans states that digital investments are key for faster growth during these challenging times. This virtual shift allowed manufacturing businesses to achieve five years’ worth of innovations in a matter of months. Given this rate, mobile manufacturing business models are rising and don’t show any signs of slowing anytime soon.

Buyers should identify remote manufacturing as a possible acquisition option if they are desirous of an agile operating model in today’s evolving landscape. This will redistribute the resources that were initially allocated to physical workspaces. What’s more, this will also give you the opportunity to implement on-demand manufacturing. With the reduction of storage and logistics infrastructure, on-demand models are ideal for mobile manufacturing businesses. In the same report, 84% of companies have abandoned traditional manufacturing and opted for on-demand solutions, with 100% of them having found this practice beneficial.

3. Work with your skills and expertise.

The road to a successful business often relies on the owner’s skills and expertise. Before you buy a business, consider your skills and expertise. What type of manufacturing business is your niche? Whether it’s gadgets, apparel, textile or food production, leveraging your strength is a good idea.

The manufacturing industry is adaptable to all types of economic challenges. Buyers should still fully understand the industry before purchasing. Carefully study the industry trends and market demands. Study the role of automation and robotics and how your business can benefit from them in a post-pandemic world. Learn about on-demand manufacturing and consider mobile business as a top priority. Ultimately, it’s about navigating the road map of the industry and learning from sellers’ insights.

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