Manufacturing & Industrial · Buyer guide
Buying a Custom Woodworking & Millwork business
Published · Reviewed by The Diligence Standard Team · Updated
a Custom Woodworking & Millwork business can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
Project margin, craftsman skill, backlog, material yield and specialized equipment determine transferability.
Risks to test
- Owner craftsmanship
- Key employee dependence
- Project concentration
- Equipment
- Material price
- Weak job costing
Evidence to request and reconcile
- Job costing
- Backlog
- Staff skills/payroll
- Equipment
- Material purchases
- Customer history
Decision questions
- What work only owner can perform?
- Which craftsmen are critical?
- How accurate is job costing?
- What equipment is unique/aging?
- Which customers repeat?