Are you interested in selling your cardboard box and container manufacturing company? If so, then this guide from a business brokerage and consultancy firm is for you. We discuss how you can determine an accurate value of your company and sell in a stress-free, fast, and successful manner.
About The Cardboard Box and Container Manufacturing Industry
In simplest terms, the cardboard box and container manufacturing industry turns paperboard into containers, including but not limited to boxes, corrugated sheets, pads, pallets, paper dishes, and fiber drums and reels. Here are the most recent cardboard box and container manufacturing industry numbers:
- There are approximately 1,915 cardboard box and container manufacturing companies in the U.S.
- There was a 0.5% annual growth for the advertising industry from 2018 to 2023
- The advertising industry generates $76.7 billion in annual revenue
- The annual profit for the advertising industry is $4.1 billion
- Experts predict a sizable increase in annual growth (1.9%) from 2023 to 2028
A Business Valuation With The Use of Rule of Thumb Data
The first step to any business sale is receiving a market-based valuation from a qualified broker This determines your fair market value (FMV), which is to say the amount you can expect your company to (reasonably) sell for on the market. To calculate this, your broker applies your EBITDA, SDE, and/or net sales to the following industry multiples (rule of thumb data):
- Cardboard box and container manufacturing companies sold for approximately 3.89 times the Seller’s Discretionary Earnings (SDE)
- Cardboard box and container manufacturing companies sold for approximately 4.06 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Cardboard box and container manufacturing companies sold between 0.59 and 1.34 times the annual net sales
Your location, growth potential, workforce quality, unique advantage, and reason for selling may lead to adjustments to your value. In other words, your broker should look beyond the financial information alone to determine your FMV.
The Sales Process for Cardboard Box and Container Manufacturing Companies
During the sale of your cardboard box and container manufacturing company, you may face certain obstacles that change your sales plans. However, in general, there are four phases.
Phase 1: Plan Your Strategy
You want to plan the sale of your cardboard box and container manufacturing company carefully. In fact, much (if not most) of the effort happens before you ever put your company for sale on the private market. Notably, the steps you will take before you seek a buyer include the following:
- Choose a business broker
- Assemble the rest of your team (if applicable)
- Determine your company’s value
- Establish your exit strategy goals
- Meet with your partners and inform them of your intent to sale
- Determine your sales timeline
Phase 2: Prepare for The Sale
Once you have your plan in place, then the next step is to prepare for the sale. Most importantly, you should round up your business documents. Here is more information about this second phase of the sales process:
- Prepare your legal documents – This can include everything from your business license to your intellectual property (patents and trademarks).
- Prepare your financial documents – The primary potential buyers want is your financial documents so that they can confirm the figures you provide. This includes your tax returns, profit and loss (P&L) statements, and more.
- Prepare your insurance and lease information – You should also obtain a copy of your insurance policy and lease. If you own some or all of your real estate and it is included in the sale, then you will need a commercial rel estate appraisal.
Phase 3: Find a Qualified Buyer
Now for the fun part — finding a buyer who is willing to pay fair market value for your cardboard box and container manufacturing company. However, in doing so, your broker must maintain confidentiality. They are able to do this by leveraging the following:
- Private networks
- Buyers databases
- Industry associations
- Personal connections and contacts
Your broker may also leverage confidential marketing methods such as non-disclosure agreements and blind listings. Of course, your plan should be personalized according to the unique needs and goals you have for selling your cardboard box and container manufacturing company.
Phase 4: Complete Due Diligence and Close The Sale
Due diligence is (all too often) a frustrating time for sellers, particularly if the process drags on and there are setbacks. Your broker can ensure this does not happen through the implementation of a due diligence map, which highlights what is included in each stage of due diligence and provides deadlines along the way. After due diligence, you will schedule and attend closing, during which you can expect to do the following:
- Review the purchase agreement
- Attain the final signatures
- Confirm the payment
- Notify employees
- Transfer ownership
Get Started With a Free, No-Obligation Consultation
At Sigma Mergers and Acquisitions, we understand the importance of maximizing the value of your business sale. You can schedule a consultation with us to ensure you are well prepared and in a position to receive the fair market value you deserve when you decide to sell your cardboard box and container manufacturing company.
Scot Cockroft is the Owner & President of the #1 ranked Business Brokerage, Business sales and M&A firm in Texas. Scot has been named Named Deal Maker of the Year by Dallas Business Journal.
He is committed to a “different” type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two.
Feel free to reach out!