The last few years have been a whirlwind for many businesses, especially manufacturers. Inflation, supply chain constraints, workforce shortages, and the impact of rising interest rates have created a complex economic landscape for businesses to navigate.

The 2023 Manufacturing Market Update from BDO Capital Advisors LLC offers valuable insights into the future of manufacturing. Despite a slight dip in M&A activity in 2022 compared to the preceding year, the outlook for 2023 and beyond remains robust, even in the face of elevated interest rates. Companies with strong balance sheets and good profit margins tend to attract the best values. EBITDA multiples have remained resilient despite a slight decrease in 2022 on average.

Key areas of focus for the industry include the ongoing digital transformation and operational optimization, as well as strategies for talent acquisition and retention. For businesses looking to position themselves attractively for potential buyers, consider the following:

• Management depth
• Diversification of customers and suppliers
• Revenue consistency and growth
• Profit margins
• Inventory and purchasing controls

If you are considering selling your business or want to set your company up for success long into the future, HBE is here to lend a helping hand. We can offer assistance directly or facilitate connections to valuable resources that could elevate your prospects. Establishing a succession plan and implementing sound tax strategies are vital steps in promoting your company. For more information, please reach out to a member of our Valuation Specialty Team at (402) 423-4343.