Selling A Distribution Business
As a distribution business owner, there are always questions to be asked when you are interested in selling a business. Some things you should consider include sales trends, net profit margins and their trends, legal and environmental issues, management depth, concentration of business with a few clients, and strength of competition. In addition to some of the standard questions that might come to mind when selling any type of business, there are very detailed matters that selling a distribution business has, that selling a manufacturing business, and selling a service business do not have. The issue of particular importance when selling a distribution business is profit margin. If there is "value added" to the business' products, or if there is a distribution arrangement which restricts competition then the margins are improved. Without one or both of these the products distributed are often sold on price alone which can compress the margins. This makes it especially difficult for the buyer to improve the newly purchased business' cash flow unless there is substantial revenue growth.
Examples of distribution businesses that The Montana Group has sold: