Forums: Discussions for entrepreneurs and small business.

I currently am the GM for a small manufacturing company. It is currently
owned by the 2 guys that started the company 18 years ago. I would like
some thoughts on the first steps to approaching them about a possible
management buy-out.

I wasn`t sure wether to talked to each one individually or approach them
as a group?

What is a good way to determine a general value of the company?

Any thoughts on financing options??

the company`s sales are about 3 million a year. net profit of about 350
-400,000 after the owners salary.

new to the forum, just trying to get some thoughts .

thanks
rock Lobster

I would definitely get all of the information I need as far as the costs which I believe can be extracted from the company`s financial report.

I hate to say the "B" word but a business plan would also help as part of a presentation to the both of them. Touch on what you would improve or change and how that would lead to further success of the company. Similar to a start-up plan for a new business, try to do as much research on competition as well.

In two words: be prepared.

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www.EllayWestConcepts.net Ellay West Concepts (Freelance Commercial Writer)

There are multiples used in valuating a company. I sold a manufacturing company in 2005 for 4 times the net... It seemed to be the going rate at the time. So at 4 times 350 the price would be around 1.4 depending on many other variables as well.

Those variable sbing: cash, A/R, debt, long and short, Inventory..Blah  Blah Blah..

I would think that depending on the valuation proces of your company. that is one way one would decide how much the company is worth.
 If you are the GM which is what my title was with my company you should have the numbers understood. Good luck!