{"id":2048281,"date":"2024-09-02T14:19:36","date_gmt":"2024-09-02T14:19:36","guid":{"rendered":"https:\/\/www.nimbo.net\/bewertung-produzierendes-unternehmen"},"modified":"2025-10-13T10:28:40","modified_gmt":"2025-10-13T10:28:40","slug":"valuation-manufacturing-business","status":"publish","type":"post","link":"https:\/\/www.nimbo.net\/en\/valuation-manufacturing-business","title":{"rendered":"How to Properly Evaluate your Manufacturing Company (Guide with Examples)"},"content":{"rendered":"\n<p>Whether it&#8217;s machinery or market position &#8211; in production, different factors often count compared to service industries. Learn here how to analyze and strategically improve the most important value drivers of your business. <\/p>\n\n<h2 class=\"wp-block-heading\">Basic Valuation<\/h2>\n\n<p>The basis of valuation is more or less identical for all companies. The Nimbo <a href=\"https:\/\/www.nimbo.net\/en\/business-valuation-overview\">Company Value Guide<\/a> provides you with useful background information and everything worth knowing about the topic. <\/p>\n\n<div class=\"wp-block-group notepad has-border-color has-background\" style=\"border-color:var(--global-palette3);border-width:1px;border-radius:10px;padding-top:0;background-image:url(&#039;https:\/\/www.nimbo.net\/wp-content\/uploads\/2023\/11\/Example-Notepad-Background.png&#039;);background-position:50% 0;background-size:800px;\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-e3e06330 wp-block-group-is-layout-flex\"><style>.kt-svg-icons2046737_cd6e96-a1 .kt-svg-item-0 .kb-svg-icon-wrap{color:var(--global-palette4, #2D3748);font-size:50px;}.wp-block-kadence-icon.kt-svg-icons2046737_cd6e96-a1{justify-content:center;}<\/style>\n<div class=\"wp-block-kadence-icon kt-svg-icons kt-svg-icons2046737_cd6e96-a1 alignnone kb-icon-valign-bottom\"><style>.kt-svg-item-2046737_64f309-ea .kb-svg-icon-wrap, .kt-svg-style-stacked.kt-svg-item-2046737_64f309-ea .kb-svg-icon-wrap{font-size:40px;}<\/style>\n<div class=\"wp-block-kadence-single-icon kt-svg-style-default kt-svg-icon-wrap kt-svg-item-2046737_64f309-ea\"><span class=\"kb-svg-icon-wrap kb-svg-icon-fe_edit\"><svg viewBox=\"0 0 24 24\"  fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.5\" stroke-linecap=\"round\" stroke-linejoin=\"round\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"  aria-hidden=\"true\"><path d=\"M20 14.66V20a2 2 0 0 1-2 2H4a2 2 0 0 1-2-2V6a2 2 0 0 1 2-2h5.34\"\/><polygon points=\"18 2 22 6 12 16 8 16 8 12 18 2\"\/><\/svg><\/span><\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Calculation Example for a Manufacturing Company<\/h3>\n<\/div>\n\n\n\n<!-- Link to Google Fonts for Caveat font --><link href=\"https:\/\/fonts.googleapis.com\/css2?family=Caveat&#038;display=swap\" rel=\"stylesheet\"\/><!-- Style to apply the Caveat font only within the .notepad group --><style>.notepad {\n    font-family: 'Caveat', cursive;\n}\n<\/style>\n\n\n\n<div class=\"rechenbeispiel\">\n  <p>\n We use the multiplier method (also called multiples), where the company value is calculated using a factor of profit (EBITDA) and\/or revenue. \n Specific internal and external value drivers are incorporated into determining the multiplier.\n  <\/p>\n\n   <p><strong>For the calculation, we make the following assumptions:<\/strong><\/p>\n\n  <div class=\"zweispaltig\">\n    <div class=\"box\">\n      <p><strong>Financial data:<\/strong><\/p>\n Revenue: \u20ac10,000,000<br\/> EBITDA: \u20ac2,500,000<br\/> Usual EBITDA multiples in the industry in Europe: 4 &#8211; 8<br\/> Applied multiple: <strong>6,2<\/strong><br\/>    <\/div>\n\n    <div class=\"box\">\n<\/div>\n<p>  <\/p>\n      <p><strong>Value drivers (internal  external):<\/strong><\/p>\n      <ul>\n        <li>Independence from owner<\/li>\n        <li>Good market position<\/li>\n        <li>Expected revenue growth: 5% p.a.<\/li>\n        <li>No cluster risks<\/li>\n        <li>50 qualified employees<\/li>\n        <li>Own intellectual property rights (50% of revenue)<\/li>\n        <li>60% in-house value creation<\/li>\n        <li>Standardized product range<\/li>\n        <li>Machinery: Lifespan approx. 10 years<\/li>\n      <\/ul>\n    <\/div>\n  <\/div>\n<p>  <\/p>\n  <div class=\"formel\">\n    <strong>Company Value Calculation:<\/strong><br\/><p>  <\/p>\n Company Value = EBITDA \u00d7 Multiplier<br\/>Company Value = \u20ac2,500,000 \u00d7 6.2 = <strong>\u20ac15,500,000<\/strong>\n <p> \n<br\/><br\/>\n <\/p> <\/div>\n<\/div><\/div>\n\n<p><\/p>\n\n<h2 class=\"wp-block-heading\">General value drivers <\/h2>\n\n<p>Not only the profitability and size of a company determine its value. A series of internal value drivers also affects the selling price &#8211; both positively and negatively. Based on the basic valuation, the value can increase or decrease by up to 25%. The most important value drivers here are:   <\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Independence from the owner<\/strong>: For a buyer, the question arises whether the success would continue without the current owner. The less the company depends on the activities and relationships of the owner, the higher the purchase offers observed on average.  <\/li>\n\n\n\n<li><strong>Growth prospects and potential:<\/strong> Investors are interested in a company&#8217;s future prospects. Questions that are important here: Is the main market growing? What percentage of growth do I forecast for my company for the next three years? Is there potential within the core competency that could be profitably exploited? Is there a shortage of skilled workers or is the recruitment of new employees possible without problems? Is there sufficient cash flow for replacement and expansion investments?      <\/li>\n\n\n\n<li><strong>Market position:<\/strong> This takes into account the company&#8217;s catchment area and pricing policy. Companies that are not only active regionally and companies that can implement prices above the market average receive significantly higher purchase offers on average.  <\/li>\n\n\n\n<li><strong>Balance:<\/strong> How dependent is the company on individual customers or business partners (e.g., suppliers)? Companies without large cluster risks receive higher purchase offers on average.  <\/li>\n\n\n\n<li><strong>Employees:<\/strong> A motivation for buying companies can be access to new qualified employees who are difficult to find in the job market. Companies that can attract and retain desirable employees receive significantly higher purchase offers on average.  <\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">Industry-Specific Value Factors for Manufacturing Companies<\/h2>\n\n<p>If your company presents positively in all the following points, which are especially relevant for manufacturing companies, this can mean a value increase of about 15% on the base value in total.<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Intellectual property rights of products:<\/strong> While the value of individual patents or intellectual property of their products is only reported in individually and elaborately prepared company valuations, it is indeed of interest for the value of the entire company whether a firm owns product rights\/intellectual property. Product rights and intellectual property can significantly increase a company&#8217;s value by providing competitive advantages through hindered market entry, additional revenue sources, for example through licensing abroad, and legal protection against imitators. <\/li>\n\n\n\n<li><strong>Large-scale production:<\/strong> The value of a manufacturing company also depends on its production method. Mass production allows the company to utilize economies of scale, which reduces production costs per unit. Automation and standardization of production processes improve efficiency and reduce waste. This can lead to higher profit margins. Overall, companies that produce in larger quantities receive higher valuations than companies that limit themselves to individual productions. Of course, there are exceptions here too. If the company occupies a high-priced niche in a specialized market, e.g., yacht building, the company value increases here as well.      <\/li>\n\n\n\n<li><strong>Standardized product range:<\/strong> On average, companies with a standardized product range are valued higher. The impact on company value strongly depends on how the company utilizes the advantages of standardization and manages the disadvantages. Companies that efficiently manufacture standardized products can achieve significant cost advantages and a stable market position. At the same time, however, they must cope with intense competition and price pressure by differentiating themselves through quality, brand strength, and efficient operational processes. A successful company will use the efficiency gains from standardization to invest in research and development as well as marketing to differentiate itself from competitors in the long term and build a strong market position. If products need to be customized for each customer, companies can often achieve higher margins and stronger customer loyalty, but must also manage higher costs and risks.       <\/li>\n\n\n\n<li><strong>High proportion of in-house value creation:<\/strong> Generally speaking, companies that perform more than two-thirds of their manufacturing value creation in-house tend to achieve a higher company value. Reasons for this: The company has control over the entire production process and can thus better ensure the quality of its products. It can react quickly to market changes and customer requirements, and innovations can be implemented directly. Through internal value creation, processes can be continuously optimized and made more efficient. This increases profitability and thus improves valuation. Critical know-how and intellectual property remain within the company. This represents a strategic advantage.      <\/li>\n\n\n\n<li><strong>Age of the machinery:<\/strong> If all required machines are modern and functional for a number of years to come, this has a positive effect on the valuation. However, if it is foreseeable that the machines needed for production will need to be replaced in the near future, this tends to significantly reduce the value of the company, depending on the amount of the pending investment. <\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">The Market-Oriented Nimbo Valuation for Manufacturing Companies<\/h2>\n\n<p>Nimbo uses the market-oriented multiplier method for its company valuation. This means that your company is compared with similar companies of the same size. The <a href=\"https:\/\/www.nimbo.net\/en\">Nimbo valuation<\/a> also takes into account the specific factors of manufacturing companies.   <\/p>\n\n<h2 class=\"wp-block-heading\">Value of the Inventory<\/h2>\n\n<p>Our considerations on <a href=\"https:\/\/www.nimbo.net\/en\/inventory-valuation-in-business-sale\">valuing your inventory<\/a> when selling the company can be found in a separate blog post. <\/p>\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Whether it&#8217;s machinery or market position &#8211; in production, different factors often count compared to service industries. Learn here how to analyze and strategically improve the most important value drivers of your business. Basic Valuation The basis of valuation is more or less identical for all companies. The Nimbo Company Value Guide provides you with&#8230;<\/p>\n","protected":false},"author":2,"featured_media":2048063,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-2048281","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"taxonomy_info":[],"featured_image_src_large":["https:\/\/www.nimbo.net\/wp-content\/uploads\/2024\/08\/4c6cc38c-a31e-476b-99df-34bc34a9fdcd.png",1024,1024,false],"author_info":{"display_name":"Bettina Pfeiffer","author_link":"https:\/\/www.nimbo.net\/en\/author\/bettina"},"comment_info":0,"category_info":[],"tag_info":false,"_links":{"self":[{"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/posts\/2048281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/comments?post=2048281"}],"version-history":[{"count":0,"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/posts\/2048281\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/media\/2048063"}],"wp:attachment":[{"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/media?parent=2048281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/categories?post=2048281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nimbo.net\/en\/wp-json\/wp\/v2\/tags?post=2048281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}