West Michigan Machine Shop

Holland, MI
Ottawa County

West Michigan


Asking Price: Annual Revenue:
Not Disclosed $1,250,000

Manufacturing: Metal Products


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RE: West Michigan Machine Shop Broker: Shu Ghosh
License #: 6505349567
Owner Financing is Available!

Quick Facts

Asking Price: Not Disclosed
Annual Revenue: $1,250,000
Net Profit: $37,740
Cash Flow: $150,000
Total Debt: $401,390
FF&E: $407,270
Real Estate: $430,000
Year Established: 1965
Employees: 11
BBN Listing #: 832423188
Broker Reference #: NVC2213

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Business Overview:

This Company is a full-service, high-quality machine shop that builds a diverse range of precision machined parts. With expertise in CNC milling and lathing, the Company primarily works in the machine building, railroad, and industrial equipment industries, supplying OEM and secondary suppliers. Established in 1965, the Company has a history of years of consistent profitability, and positive cash flow as the owners built the business through an emphasis on quality work and close customer support. The Company also has a small welding department and supplies fabricated assemblies as well. This Company is ready to resume its growth under a new owner who provides machining leadership expertise and brings capital to invest in expanded production capabilities. The business was purchased from the company’s founder in 2002, and the current owner would like to retire.

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Property Features and Assets:

The Company's 16,000-square-foot facility, on a 3-acre site in Michigan, is owned by the Company's owner under a separate LLC. The single-story, brick, block and metal panel industrial building includes four truck doors and about 1,600 square feet of office space and an equal-sized mezzanine area. The building, constructed in 1998, is equipped with fire sprinklers, private offices, warehouse area, a break room and restrooms. The office area is heated and cooled by a new HVAC unit. In addition to the main building, the property has paved parking areas.

Market Competition and Expansion:

Improved economic conditions have boosted the manufacturing industry and helped machine shops grow, but – not surprisingly – the COVID-19 pandemic reversed some progress. Manufacturers’ shipments of fabricated metals, which include the output of machine shops, declined 3.8% in 2016, then rose 2.7% in 2017, 7.9% in 2018 and 2.3% in 2019 before falling 4.6% in 2020. Sales for U.S. machine shops are forecast to grow at a 2.64% compounded annual rate from 2019 to 2025, slower than the growth of the overall economy. The U.S. economy made a strong recovery from the pandemic due to substantial fiscal stimulus supporting consumption, which helped durable goods manufacturing. A new infrastructure plan has potential for a further boost. The automotive sector is marked for a solid recovery in 2021, driven by pent-up demand, increased use of personal transportation, and increased personal savings. The automotive recovery is expected to be particularly strong in the U.S., where the production level in 2021 will exceed the 2019 level, according to World Steel. Nearly three-quarters of U.S. manufacturers and distributors are optimistic about their business prospects in the next six months, according to a March 2021 survey of more than 120 manufacturing and distribution executives by Chicago-based Sikich, a leading professional services firm. Seventy-two percent of respondents ranked their level of optimism at a seven or higher on a scale of one to 10. The survey also found that more than half of manufacturers and distributors are looking to expand their workforce in the next six months. West Michigan’s strong manufacturing base has helped it beat the pandemic recession. An economic forecast released in December 2020 by the W.E. Upjohn Institute for Employment Research in Kalamazoo calls for West Michigan employment to climb above the pre-pandemic level by 2023 and continue to grow through 2023. “The region is doing very, very well in the recovery from the brief recession,” said Jim Robey, the Institute’s director of regional economic planning services. The U.S. machine shop industry consists of about 18,000 companies that employ 284,000 workers and generate $36 billion annually. No large companies dominate, so machine shops mainly are small- to medium-sized businesses. Typically, they operate from a single location, employ about 16 workers and generate about $2 million in annual revenue. Barriers to entry include the initial investment in costly equipment and the shortage of skilled labor in the industry. They serve a variety of manufacturers, including aerospace, automotive, transportation, consumer electronics, and farm, medical and recreational equipment. Most projects are low volume and require high precision. Machine shop owners are innovating to overcome the shortage of skilled labor. While many shops already have CNC machines that use computers to control cutting, an increasing number of companies are implementing technology that allows unattended or lightly attended production. Bar feeders allow lathes to operate faster with minimal labor by providing a constant stream of raw materials. Improved automation frees up machinists to work in a supervisory role and can improve throughput. Shops may change floor plans to facilitate a more efficient materials flow that minimizes changeovers. Some shops are able to run continuously on nights and weekends with minimal staff.

Reason for Selling:

Retirement

Additional Details:

  • The property is owned.
  • The owner is willing to train/assist the new owner.
  • This is not a homebased business opportunity.
  • This is not a franchise resale opportunity.

Documents:

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