HedgeStone would rather spend four weeks on a binder than six months apologizing for one. Jason Taken is a business broker, not an appraiser and not a CPA. Sell my manufacturing business is the decision page. This page is the shop-floor prep.
What should a four-week readiness sprint actually contain?
Week one: lock three years of financials and tax returns; start the machine list with make, model, year, control, serial, and liens. Week two: build trailing-twelve and trailing-thirty-six concentration without names; age inventory into raw, WIP, and finished; mark excess-and-obsolete. Week three: pull quality certificates and the last certification-body audit; find the Phase I or budget one. Week four: write the replacement general-manager number; decide whether real estate is in or leased back; book the intro call.
That sprint does not raise a multiple by itself. It keeps the first buyer from discovering the file is not real. Census CBP 2023’s 284,452 establishments and 68.4% under-20-employee share (Source: Census CBP, 2023) describe how many shops have never built these tabs because the owner kept them in his head.
Documents needed to sell is the longer inventory of files. How to sell is the process those files feed.
ISM Manufacturing PMI was 54.6 in August 2026 with a Prices Index of 71.1 (Source: ISM, Aug 2026). Fed G.17 utilization was 76.0% in July 2026 (Source: Fed G.17). Those prints describe a cost and capacity climate. They do not replace your job-cost file. If material prices moved, show the surcharge history. If the floor was idle, do not recast idle time as “normalization” without a document.
Which earnings repairs are worth doing before market?
Repairs that change a buyer’s risk are worth the quarter. Hire or promote a second chair if you are still the only person who can quote. Document replacement compensation so SDE is not a mystery. Catch up preventive maintenance and write it down as maintenance, not as a surprise capex haircut. Close open nonconformances that would fail a customer audit. Get the certificate current if it lapsed.
Repairs that manufacture a year are not worth the quarter. Booking WIP on hope. Writing up inventory to hit a number. Cutting maintenance to swell trailing EBITDA. Raising prices you will have to reverse. Those moves die in quality of earnings and take the exclusive with them.
| Prep item | Why buyers care | Done looks like | Fake looks like |
|---|---|---|---|
| Recast binder | QoE will rebuild it | Each add-back has a check, W-2, or contract | “Owner works 80 hours” with no replacement math |
| Machine list | Liens and OLV | Serials, controls, lien column | A brochure PDF |
| Inventory classes | Peg and true-up | Raw / WIP / FG; E&O flagged | One number called “inventory” |
| Concentration | Multiple and structure | T12 and T36, nameless until NDA | Top-10 from memory |
| Certificates | Customer access | Current cert + last audit + open NCRs | Logo in the footer |
| Environmental | Escrow or walk | Phase I if the history is wet | “We’ve never had a problem” |
| Real estate decision | Two prices | Sale, leaseback, or stay-landlord memo | Building buried in the multiple |
Valuation still follows size band and sub-sector. BizBuySell’s 2021–2025 manufacturing set cleared at 2.75x median SDE (Source: BizBuySell / Iconic). Prep will not turn that shop into a 7.2x GF Data story. Prep can keep you from being the 2.04x quartile because the file was sloppy.
How should inventory and working capital be cleaned?
Selling with excess inventory is the dedicated page. The prep rule is simple: identify slow-moving raw, stranded WIP, and finished goods that the customer will not take. Write them down before you negotiate a working-capital peg. Percentage-of-completion and job-cost WIP are diligence, not a rounding error.
Sellers like to call obsolete stock “optional value.” Buyers call it a true-up. If you need the write-down to make the year look worse, that is information. Do it on your tax return with a CPA, not as a surprise in month two of exclusivity.
AR aging belongs next to inventory. A 90-day customer who is also 28% of sales is a concentration story and a collectability story. Do not wait for the buyer’s QoE team to find both.
What equipment and facilities work is actually prep?
Safety repairs that would stop a tour. Guarding, leaks, and trip hazards. Housekeeping that lets a visitor see the cell. Aisle tape is cheaper than a buyer inventing a capex list from clutter.
Control retrofits and spindle rebuilds can be real value if documented. Last-minute machine purchases that never enter the routing look like decoration. If you finance new iron, the lien will appear on the UCC search. Say so in the machine list.
Facilities: decide the real-estate path. A buyer using SBA 7(a) lives inside a $5 million loan cap; 504 is the product for many plants, $5 million standard and $5.5 million for a qualifying small-manufacturer project (Source: SBA). Occupancy rules apply. Confirm with the lender. Do not assume the building can hide inside enterprise value.
If finishing, plating, or solvent history exists, treat Phase I (ASTM E1527-21 / EPA AAI, 40 C.F.R. 312) as prep. Reports age. Components generally stale after 180 days; a full new Phase I after one year. An Environmental Professional performs the work. See the environmental-acquisitions primer used in research (Source: acquisition environmental article).
How do you prep people without announcing a sale?
Cross-train the quote desk. Write work instructions that are not only in the owner’s head. Identify who holds customer relationships. None of that requires an all-hands about a sale. It does require the owner to stop being the only person who can answer a late RFQ.
If the file cannot be sold without the owner, write a transition schedule you would actually work. Earn-outs on named-account gross profit are a structure, not a slogan. Sub-sectors matter here: an AS9100 cell and a commodity brake shop do not prep the same way. The certificate file is prep for one and irrelevant theater for the other.
SBA packaging will ask for the same tabs a sponsor asks for, plus personal-credit conversations on the buyer side. A clean seller file still speeds the loan. SOP 50 10 8’s 10% injection rule does not care that your WIP was hopeful (Source: SBA).
What does an illustrative prep miss look like?
Illustrative only.
A food co-packer spends six weeks on new break-room photos and a logo refresh. The allergen program has open gaps. The inventory includes private-label finished goods the brand already discontinued. The recast adds back “owner marketing” with no invoices. The first buyer’s QoE kills the add-backs and the peg fight on discontinued FG takes six figures off cash at close. The photos were fine. The binder was not.
A better quarter for that file: close the allergen gaps, write down the dead finished goods, document add-backs, and put SQF or the relevant audit in the room. Then take the photo.
What should you stop doing in the prep quarter because it manufactures a fake year?
Stop cutting maintenance to swell EBITDA. Stop stuffing channel or FG. Stop raising prices you will reverse. Stop booking WIP on hope. Stop adding family to payroll to “show a team.” Stop buying a machine that will not enter a routing before the teaser.
Those moves are visible. QoE is built to see them. A quieter quarter with honest margins is better prep than a loud quarter with a costume.
How do certificates and customer audits fit a prep calendar?
If a cert lapses in the sale window, recertify before the CIM or disclose the lapse as a customer-access problem. If a customer audit is scheduled, do not stack a buyer visit on that day. If open NCRs are stale, close the ones you can close honestly. A last-minute “all green” dashboard that contradicts the audit file is worse than open NCRs with dates.
Illustrative only: ISO 9001 lapse of 11 months, owner spends the prep quarter on a logo. First buyer treats the lapse as a lost-customer risk. A better quarter would have been the surveillance audit and a deputy quality signature.
What household and partner decisions are prep, not CIM poetry?
Whether the spouse stays 90 days. Whether the building is in. Whether you can bear standby. Whether a December tax year is real. Whether family is a bidder. Decide those in the sprint. Undecided households produce undecided teasers.
What should a Monday morning dashboard look like in the prep quarter?
Three numbers: quotes out, on-time jobs, cash. One list: serials still missing. One aging: inventory E&O. That dashboard is not a CIM. It is how you keep the shop alive while you build the binder. Shops that disappear into “sale mode” arrive at teaser with a worse book.
If you cannot staff the dashboard and the binder, hire bookkeeping help for eight weeks. That cost is cheaper than a starved trailing six months.
What safety and housekeeping work is prep versus costume?
Guarding, leaks, and trip hazards are prep because they stop a tour. Painting the break room is costume. Do the first. Skip the second if time is short. Buyers forgive scuffed paint on a cell that holds spec. They do not forgive an unguarded pinch point they will have to explain to their insurer.
Educational information only. Tax write-downs, environmental work, and certificate transfers belong to licensed professionals. No prep plan guarantees a multiple or a timeline.