The sell-side mix briefing is selling a job shop versus a proprietary product company. This page is the row-by-row scorecard. Sell my manufacturing business stays the pillar.
| Criterion | Job shop | Proprietary product manufacturer |
|---|---|---|
| What is sold | Available hours, process, certificate | Specified SKU, brand, reorder habit |
| Drawing title | Usually the customer’s | Usually the company’s |
| Tool title | Often customer-owned or bailment | Company-paid molds, fixtures, dies |
| Earnings base | SDE on owner-operated files | Adjusted EBITDA once a GM is real |
| Typical buyer set | Individual / SBA; some operators | Strategics, add-ons, some searchers |
| Inventory fight | Job-cost WIP, leftover alloy | Finished goods, channel, returns |
| Switching cost | Relationship + first-article time | Spec, qualification, catalog habit |
| Diligence first open | RFQ log, estimator, serials | SKU reorder, warranty, IP paper |
| Walk trigger | Owner is the quote desk | Brochure with no reorder file |
| Teaser honesty | “Build-to-print” in sentence one | “Catalog / OEM” only if invoices agree |
Census CBP 2023 counted 284,452 manufacturing establishments; 68.4% have fewer than 20 employees (Source: Census CBP). Most of that majority is a capacity file. That is allowed. It is not a reason to borrow a catalog cell.
How does revenue actually arrive?
A job shop lives on RFQs. Tomorrow’s book is a stack, a win-rate, and an estimator’s hours. Repeat parts help. They do not become a catalog because the traveler has a part number.
A proprietary product manufacturer lives on reorders. The customer asks for the same specified item, or a variant on a platform the company owns. Reps, distributors, or a printed list can carry the motion. The floor still matters. It is not the whole enterprise.
Hybrids are ordinary. Score trailing twelve-month gross profit, not the story the owner prefers. A fixture designed once and still 85% custom hours is a job shop. Custom variants on a common platform can still be a product file.
Who owns the drawings and the tools?
Build-to-print usually means the customer owns the drawing. Fixtures may be tagged customer-owned. Photograph the plates. Put purchase orders next to the tags. CNC machine shops see this weekly.
A product manufacturer shows drawings in the company’s name, invoices that prove who paid for the mold or die, and a schedule of tools that travel with the SKU. Machinery and equipment OEMs live here when the machine is theirs.
Private-label work looks like a product and is not yours. You are a capacity file with a specification. Do not put the customer’s mark in the teaser. Do not claim a catalog you cannot assign.
Which earnings base should the teaser use?
Owner-operated capacity shops usually live on seller’s discretionary earnings after a replacement wage. Main Street manufacturing in BizBuySell’s 2021–2025 set cleared at a 2.75x median SDE on about $268k of earnings (Source: BizBuySell / Iconic). That print describes a room. It is not your quote.
Product files that already pay a real general manager usually move to adjusted EBITDA. Manufacturing business valuation still wants a size band before a cell. Stanford’s 2024–25 search median of about $16 million at ~6.2x EBITDA on a ~25% margin company is not a job-shop law (Source: Stanford GSB). Do not paste it onto a walk-in quote desk.
SBA 7(a) still caps at $5 million with a 10% change-of-ownership injection (Source: SBA). A catalog OEM whose enterprise value sits above that box needs a different stack. A job shop that fits the box should not exclusive only with an associate who wanted a platform.
Which buyer classes usually clear each file?
Capacity shops that fit the 7(a) box often clear with an individual operator. Some searchers will stand in a shop they can run. They still filter on margin after a replacement manager.
Product files that can prove reorders attract strategics and some PE add-ons. IBBA Pulse Q1 2026 found that 83% of deals over $5 million drew three or more offers (Source: IBBA). That helps a specified SKU that can invite more than one class. It does not rescue a shop that mailed one local rival.
Read buyer types before you pick a favorite door. Size band still sits under every class.
How should working capital be classed?
Job shops fight unbilled first-article hours, cancel-for-convenience backlog, leftover alloy, and fixtures that are not theirs. Product files fight finished-goods revisions, distributor stock you do not own, and returns that were remade as “goodwill jobs.”
The working-capital peg has to name the mix. A single “inventory” cell is how a true-up steals cash. Slow-moving raw on a job shop is often a dead program. Slow-moving finished goods on a product file is often an obsolete revision. Write both down before anyone exclusive.
How much of the book walks out with the owner?
On a job shop the quote desk is often the enterprise. If the owner programs, prices, and holds the three hero accounts, you are selling a transition plan. Owner-dependent shops is the companion.
On a product manufacturer the owner may still be the inventor or the closer. The test is whether reorders continue when that person is on a beach. A warranty policy that lives only in the owner’s head is a QoE gift.
Deloitte and The Manufacturing Institute still flag 3.8 million manufacturing hires needed this decade, with 1.9 million potentially unfilled (Source: Deloitte/MI). A roster that exists only on a slide is a price chip on either file.
How do switching costs and concentration differ?
A job shop’s switching cost is first-article time, a live certificate, and a buyer who does not want to re-qualify. That is real. It is also perishable if the estimator leaves.
A product manufacturer’s switching cost is the spec, the qualification file, and the habit of reordering a named SKU. That can support a higher cell in the same size band. It does not save a product file whose one big-box account is 40% of billings. Concentration still prices.
What belongs in the first data-room dump?
Job shop: three years of tax returns, a nameless concentration schedule, the RFQ log, win-rate if it exists, serials and liens, certificate dates, and tool-title tags.
Product manufacturer: the same tax and concentration pack, plus SKU-level reorders, warranty and returns, drawing-control evidence, tool invoices, and any trademark or patent paper that is still in force.
Do not claim IP you cannot show. Do not hide a customer-owned mold that was capitalized anyway. Both sides will meet that fact in quality of earnings.
Who should choose a job-shop file?
Choose the job-shop side of this scorecard if trailing gross profit is mostly build-to-print, the customer owns the drawing, and the enterprise is hours plus a certificate. Price it on SDE when the owner still quotes. Invite operators who can stand on the floor. Test orderly liquidation value against earnings so the iron floor is not a Friday surprise.
Do not choose this side as an apology. Capacity is most of the Census count. Honest capacity clears. Costumed capacity does not.
Who should choose a proprietary product manufacturer?
Choose the product side if trailing gross profit is mostly a specified item you control, reorders show in the invoices, and tools that travel with the SKU are yours. Price it on adjusted EBITDA once a replacement manager is real. Invite strategics and add-ons when the file can support more than one class. Write warranty, channel, and returns before the letter.
Do not choose this side because the website has a parts list. Buyers will read the billings.
Educational information only. Drawing title and tool title are counsel questions. Jason Taken is a business broker with HedgeStone Business Advisors. No mix guarantees a multiple. The conversion path is a confidential intro call.