Selling a Factory In Florida: All You Need To Know
Here’s all you need to know about selling a factory in Florida.
With a GDP exceeding $880 billion (2017), Florida is the fourth largest state economy in the United States. The “Sunshine State” also ranks seventh on the list of America’s top export states—and it really isn’t surprising why.
While Florida is primarily known as a tourist’s paradise, it’s also one of the country’s major industrial and manufacturing hubs. Did you know that the state is home to more than 20,000 manufacturing companies? Yes, the state produces a diverse array of products, including batteries, aerospace products, semiconductors, medical devices, boats, communication equipment, and more.
Florida’s rich economic base and its stellar reputation of being one of the country’s major manufacturing powerhouses make it one of the best places to buy or sell commercial real estate.
If you’re looking to sell a factory in Florida, it shouldn’t be too difficult to find a buyer. Due to the reasons we mentioned above, investors are clamoring to get a bit of the industrial juggernaut that is Florida.
TBXflorida.com Can Help You Sell Your Factory In Florida
Although industrial real estate and factories are high in demand in Florida, it’s advisable to settle-in and take stock of your enterprise, current processes, and systems before you sell your property. Although it may appear quite simple to list your factory for sale in Florida, there’s a higher number of complexities at stake than you may think.
All industries – including manufacturing – have unique characteristics that you need to take into consideration before preparing for the eventual sale. A few of these elements require a considerable amount of time to implement, so you’ll have to work on them in advance before you sell your factory.
This is where the assistance of a seasoned business broker, such as TBXflorida, can be invaluable. Our licensed, qualified brokers will help you across all stages of the selling process, including determining the right value of the business, advertising, negotiations with interested parties, as well as handling the financial and legal issues that need to be addressed. Get in touch with us to learn how we can assist you with the sale of your industrial property.
Selling a Factory In Florida: All You Need To Know.
The following are some key elements that need to be taken into consideration and addressed before you sell your factory in Florida.
1. Preparing the Documentation
Parties who’re genuinely interested in buying your manufacturing business will require you to provide certain information and documents. If you don’t provide it promptly, they may move on to other opportunities. Typically, factory acquisitions are funded by some form of banking finance.
The following are some of the documentation generally needed for bank underwriting:
- At least 3 years of tax returns
- Financial statements from the last three years (preferably prepared by an accountant)
- Complete documentation on all the cash flowing to the shareholder(s), including where it appears on your tax returns and P&L statements.
- The list of industries your business serves and the income amount attributable to each
- Accounts receivables with the complete terms of payment
- A complete record of accounts payable
- All capital expenditures incurred in the last five years
- A complete list of factory equipment with age, make, model, date of acquisition, price of acquisition, and service history.
In many business sale processes, the underwriters or finance company also ask for additional information. The things mentioned above are just baseline requirements that are common with most deals.
1. Clean Up Your Factory
The importance of curb appeal isn’t just restricted to real estate. Buyers of middle-market industrial setups today are mostly executives who’re fresh from leaving corporate America. When inspecting a factory, they need to see a well-run, clean, and neat operation. If the floors in your factory are littered with metal chips, potential buyers may get the impression that maintaining sales may require a substantial capital expenditure.
Some manufacturing operations are just messier than others. However, when you’re preparing to sell your factory, it should be in the best shape possible.
2. Cleaning Up Your Inventory
If you have unsellable customer parts or inventory sitting in your factory, deal with it before you put your business up on the market. If there are certain products that have not been selling for a while, it’s likely that the buyer wouldn’t want them or be willing to pay for them. Dumping your old inventory on the buyer to squeeze some more money out of the deal is likely to have an adverse effect not just on negotiations, but also your relationship with the buyer.
Remember that these types of deals typically involve some sort of seller financing. If you screw the buyer over on the inventory, they may have something to sink their teeth into on the backend. So, don’t spoil your budding relationship with a buyer by picking up pennies after stepping over dollars.
3. Get Your Books In Order
There are several reasons why you need to clean your books before selling your Florida factory. Firstly, if there are any receivables which you think are never going to be collected, remove them from your books. Secondly, ensure your tax returns and P&Ls match. If they don’t have the two documents reconciled by your accountant. A logical explanation should be provided for any variations between the two. It’s impossible to overstate how important this is.
You could have everything a buyer is looking for, but you’re toast if you can’t reconcile your books. To help their clients steer clear of taxes, accountants often pull gymnastics. While this can be great in the short term, it can really make it difficult to sell your factory if the documents don’t match.
Selling a Factory In Florida: All You Need To Know
Ready to sell your business? As one of the leading business/real estate brokerage firms in Florida, we specialize in small to multi-million dollar businesses and commercial real estate investments. By offering over 3000 businesses for sale covering 86 business categories in 67 counties in Florida, we’ve helped countless buyers and sellers successfully actualize their goals.