How To Buy A Food Manufacturing, Production And Packing Business

If you are looking for a business to add to your portfolio that has the potential to become global and reap millions of dollars profit every year then the food manufacturing, production and packing businesses for sale are extremely viable options. There are a number of food manufacturing, production and packing businesses for sale out there today because the market for various different products is huge, thanks largely to the choice that consumers want these days. For example, there are allergy foodstuffs designed for those who display various intolerances, organic foods, fast and convenient foods and then your home cooked foods, amongst others. As a result, the options within the food industry are seemingly endless and can generate a real profit if you take the time to look at how to buy this type of business.

Considering profitability first, the level of profitability associated with the food manufacturing, production and packing businesses for sale varies greatly depending on the type of business that it is, the existing contracts it has and the overall size of business. It is possible to make profits in excess of $4 million, but then you may only make just over $100,000. The latter is not to be disregarded though because it is still a substantial return and can be supplemented by new lines of business.

Before getting an accountant and lawyer to take a look at the accounts and business plan respectively, you will more than likely have to sign a Non Disclosure Agreement (NDA) because food manufacturing, production and packing businesses tend to be extremely protective about their methods, ingredients and contacts. However, once that is signed then your team will be able to calculate the profitability should you purchase the business further down the line. You should expect to pay anywhere between $250,000 to $5,000,000 for a good food manufacturing, production and packing business for sale.

Factors To Consider
There are a number of factors to consider when you are planning on buying a food manufacturing, production and packing business. The first is of course the legislation that your business would have to adhere to. Those laws and guidelines will be in place with the existing business, but you should know them all before you start so that you can monitor standards after you have taken over. The existing owner may offer to stay on for a month or so and you should always get this knowledge from him or her wherever possible.

Secondly, you should consider what it is that comes with the sale. You should aim for freehold business property because there will then be no rent outstanding that could potentially cut into your profits. Many food manufacturing, production and packing businesses for sale do own their own land so look for it. Also, the existing contacts, contracts and equipment should come in the package too. You lawyer will be able to negotiate terms over this and even get a valuation expert in if necessary to assess the real value of the equipment.

Finally, the location does not matter as long as there are good transport links available to get the manufactured products out onto the market. However, it should be close enough to an inhabited area to attract staff as and when necessary. The staff already working there should be retained for now, pending assessment, but a fresh supply of labour is an excellent point of sale.

Your Involvement
Although you could have very little to do with the food manufacturing, production and packing businesses for sale in terms of your involvement and there will be very little extra investment necessary unless you plan to expand, it is always a good idea to closely supervise the workings of the business for sale after purchase because a law suit is not outside the realms of possibility and will indeed cost you a lot if the correct procedures are not followed. Getting involved is in your best interest so look at time constraints and your own commitments when looking into how to buy a food manufacturing, production and packing business and make your mind up from that.

One Response to “How To Buy A Food Manufacturing, Production And Packing Business”

  1. Omar Kettani Says:

    As business brokers in Toronto, we notice that food packaging and distribution businesses are in higher demand in Toronto than other businesses for sale. There many reasons for this:

    1- Immigrants coming from developing countries to Canada have developed expertise in their countries and are seeking businesses where they can use their expertise.

    2- Most Distribution businesses are in high demand in general because they are less dependent on their owner, easy to transfer and have a steady customer base that can be transferred without a need for advertising expenses.

    3- Food distribution businesses are more recession proof for obvious reasons.

Leave a Reply