What’s the best way to sell a shop?

I’ve been in business for about 15 years making tooling for the highly technical investment casting industry and 20 years prior working for foundries and tool shops. About six months ago I could see a slowdown in RFQs, but I was swamped with work and wasn’t concerned, now they have almost stopped and I’m terrified of what the future may bring. Only 2 RFQs this month when a year ago there was 5 a day. I’ve talked to 6 foundries this past week and all are cutting back and laying people off because their customers are pushing out deliveries and are not getting much of anything new to quote. It’s like someone turned off some giant switch. I can hold out for a few months because I’m not in debt, but still have expenses like rent and utilities. So I’m thinking of selling the shop either whole or part if things don’t improve and I’m wondering if I have to, what would be the best way to sell off the equipment.

The sad part of all this is that what I make normally doesn’t inter the mainstream of production for 6 months. So 6 months from now doesn’t look good for production shops.

Sorry to hear that, it's a sign of the times and I fear you're not alone.

However selling as a whole?........... from what you say business has dropped off so unless you can find someone who needs a complete shop in your line of work,?......... and then it'll be bargain basement $$$

Which leaves asset disposal, IF you have the time, IMO the only way is to sell off item by item, ebay C/L small ads etc etc.
That way at least you're in control so hopefully you'll recieve a reasonable value.

FWIW, top dollar auction wise will be obtained by Asset Sales, Myron Bowling or Hoff Hilk. You'll probably need at least $100,000 auction total value assets for Asset or Myron to have any interest in doing your auction. Hoff Hilk may do less since they are online only. Auction prices are down about 20 pecent from peak now, which is better than I expected really. Late clean highly desirable "name brand" CNC machines are still bringing near peak at auctions but less desirable older CNC and manual machines (with exception of Blanchard grinders) way down. Live auction would net more than eBay right now.

moldcore said:

I can hold out for a few months because I’m not in debt, but still have expenses like rent and utilities.

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So what are you gonna do when you shut the shop down? Go get a 9 to 5 and punch the clock? If you have no debt other than utilities and rent, why not hold on to your equiptment? Moth ball it. I'm sure you can find some warehouse/storage space to pack things away until things turn around or you find a different niche in the industry.

david n said:

Moth ball it. I'm sure you can find some warehouse/storage space to pack things away until things turn around or you find a different niche in the industry.

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Warehouse space is often nearly as high price as shop space, plus major PITA to "mothball" equipment that weighs thousands of pounds...plus forklifts needed at each end, etc, etc..

But if mothball one must, pehaps buy some cheap semi trailers, load 'em up (assuming one's machines are small enough to palletize and to fit in such) tow 'em and park 'em till brighter times. (of course even the "park 'em" can be an issue...where to park... )

I am also in the foundry business and you as everyone else that I know of are in a very tight spot right now. With the decline of manufacturing in this country and corporations not putting an money into developing new products it will be a while beforeit comes back.

Try to hold out as long as you can but be aware of the break point when you have to decide to auction or sell. Selling will probably be hard with the way financing is right now. But if you decide to auction make sure you allow enough time for the auctioneer to get everything organized and advertized. I would be finding out this info as a last resort.

Good luck, I hope this industry turns around for all of us involved.

I'd just look at what machines don't really get used anymore and see if its worth trying to sell them. Possibly downsize enough to move it to a smaller shop less expensive shop, if the cost of moving everything was justifiable with what may be saved in rent and such of course.

Selling a full shop that has no work on order and no known future contracts coming likely wouldn't get more than what you can get for just the machines. A full working busy shop with future contracts would be worth quite a bit more generally.

some general comments. From the owner' point of view for liquidating a typhical small shop there is alot to be said for an old fashioned on site auction or if it is big enough a on-line/ onsite auction. Everything gets sold in a day. the VMC, the stapler, the stack of cartons. Ebay is alot of work for each item and you have endless shipping and pick ups.
Alternately sell the whole thing to a dealer with the agreement that the place will be empty and broom swept clean.
I am not saying that the either of the above nets you the most $.
The guy who thinks he is going to sell off his own shop sells the first few most desireable items for to little, and thinks this is easy. Then he can't seem to sell much else, but now the stuff that brings in the buyers at an auction is gone so....

My thoughts right now are that it would be a better thing to have some assets that you can produce something with, than to have nothing but money. If hyperinflation kicks in, in a year or two as some have suggested, then at least you can charge the going rate to buy your $10,000 loaf of bread Sure, you might have to leave your comfort zone and do some different types of jobs, but imagine being helpless to do anything to help yourself.

Thanks everyone for their comments. All very good points. After I posted this and after a few phone calls, I managed to acquire more work and more RFQs have been coming in. It doesn’t take much to fill my shop with work. My shop is nothing special. CNC machine centers, Series 2 Special Bridgeports with rotary crosslides, fairly new manual lathe, lots of tooling, etc. Nothing that can’t be used in any shop today. If push comes to shove I’ll piece it out on eBay, I don't need the cash just piece of mind.

When You don’t have enough work the whole world looks like it’s going down the toilet. Just one job can make your outlook on life much brighter. Not knowing what the future brings is the hardest thing to deal with, harder than poor paying customers.