The cement manufacturing industry has performed relatively well over the past five years, which leads to an optimal selling opportunity for many owners. In this guide, we discuss the sales process for cement manufacturing company owners, highlighting how to value and sell your company for fair market value.
About The Cement Manufacturing Industry
The cement manufacturing industry engages in the manufacturing of various types of cement, including but not limited to Portland, hydraulic, aluminous, natural, masonry, and pozzolanic cement (Business Reference Guide). Overall, the cement manufacturing industry is stable. This is largely because the cost of cement import is incredibly high, which means almost all cement used in the United States is produced domestically. However, with that said, the concrete production numbers may stall in future years (through 2028). Here are the cement manufacturing industry’s numbers and projections:
- There are approximately 184 cement manufacturing companies in the U.S.
- There was a 1.3% annual growth for the cement manufacturing industry from 2018 to 2023
- The cement manufacturing industry generates $10.1 billion in annual revenue
- The annual profit for the cement manufacturing industry is $434.1 million
- Experts predict a slight increase in annual growth (0.1%) from 2023 to 2028
You should also check: WHEN SHOULD I SELL MY BUSINESS
How Much is My Cement Manufacturing Company Worth?
There is not much data in terms of sales within the cement manufacturing industry. Subsequently, rule of thumb data is less reliable, and the specifics of your company may be important. With that said, according to Business Reference Guide, cement manufacturing company owners sold for approximately 4.31 times their annual net sales.
Of course, your seller’s discretionary earnings (SDE) and earnings before interest taxes, depreciation, and amortization (EBITDA) are major factors in your value as well. However, your broker should also look beyond your financial information and consider the following when determining your cement manufacturing company’s worth:
- Growth potential
- Competitive advantage
- The quality of your work processes
- The quality of your workforce
- History of lawsuits and controversies (if applicable)
- The reason for selling
What Steps Are Involved in The Sales Process for a Cement Manufacturing Company?
The sales process for a cement manufacturing company is unlike other types of sales. Although it can feel overwhelming to plan and execute an exit strategy, it helps to break the process into steps. Although you should personalize your sales plan, the sales process for a cement manufacturing company should include the following steps:
- Select your broker
- Plan your strategy
- Prepare your documents
- Bring your business to market
- Implement your due diligence map
- Complete the business sale
- Transfer company ownership
Step 1: Select Your Broker
Choosing a reputable and qualified business broker is the first step you should take if you are even considering selling your cement manufacturing company. In doing so, you should look for one who has experience selling companies (and in particular companies within your industry) for optimal value. Be sure to schedule a consultation before agreeing to work with any brokers to ensure they are the right fit.
Step 2: Plan Your Strategy
You should carefully pan the sale. Remember, there are no cookie-cutter approaches that will work. Instead, getting the most for your cement manufacturing company requires a personalized strategy. When planning, ask the following questions:
- Am I satisfied with my valuation?
- How can I improve my company’s value (if applicable)?
- What are my exit strategy goals?
- How fast do I wish to complete the sales process?
- What is the next step after I sell my company?
These questions can help you create the vision for your exit strategy (both during and after the sale is complete). Based on your personal goals and desires, you and your broker can develop a sales approach.
Step 3: Prepare Your Documents
The last step before you hit the market is collecting your cement manufacturing company’s paperwork. This includes your finances, legal information, insurance policy, and more. You will need to collect a list of your employees and your inventory (all manufacturing equipment and supplies, etc.). Do not worry, your broker can assist you with ensuring you have all you need.
Step 4: Bring Your Business to Market
If news that you are selling your cement manufacturing company were to become public, then it could disrupt your business operations. For instance, you may have employees fearful of losing their job, leaving your company and/or it could cause your vendors to fear a hike in prices and find a new provider. For this reason, you should let your broker, who understands how to seek and secure a buyer in a confidential manner, conduct the marketing for you. Your broker can notify you about all progress that happens and ensure you are as involved as you desire along the way. Ultimately, you will secure a buyer with a signed letter of intent (LOI).
Step 5: Implement Your Due Diligence Map
A due diligence map is a list of items that are to be performed (or that the buyer has the option to perform) during the due diligence process. It also outlines date ranges for each part of due diligence. Implementing your due diligence map is essential to avoid long, drawn out processes. During due diligence, you can expect the buyer to request your cement manufacturing company’s documents, along with a list of questions that allow them to learn more about the company and its operations.
Step 6: Complete The Business Sale
The sale closing may be one of the final steps, but the work is far from over. It is important to remain focused and ensure you prepare for closing properly. Notably, you ill need to bring certain documents with you. This usually includes (but is not limited to) your bank information and a copy of the purchase agreement. During closing, you will attain the final signatures of the purchase agreement and confirm the payment has been sent.
Step 7: Transfer Company Ownership
The last step is to transfer ownership of your cement manufacturing company to the buyer. This involves providing them with full access to the company’s records, systems, and facilities. You will also need to notify employees, update insurance information, leases, and business licenses, among other tasks that are specific to your sale.
Are You Ready to Start The Sales Process With a Business Valuation?
We are here to make sure you do not leave money on the table when you sell your cement manufacturing company. You can trust Sigma Mergers and Acquisitions to ensure you receive the fair market value for your business. Get in touch with us today and let us provide a free, no-obligation business valuation.
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.
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