What should I check before buying a hydraulic cylinder repair shop?
Before buying a hydraulic cylinder repair shop, check the machining, honing and test equipment, the crane and bay capacity, how seals and rods are sourced, the turnaround and warranty-return records, how many customers and seasons carry the work, and whether the skilled machinists will stay after the sale.
A cylinder rebuild shop is a small machine shop with a narrow specialty. Its assets are its machines, its know-how and a handful of customers who need heavy equipment back running quickly. That shapes what you check, and the questions below are a place to start with your advisers.
Machines, test bench and space
List the lathes, honing machines, welding stations and the test bench, and ask for service records on each. Check the crane and bay capacity against the largest cylinders the shop takes in. An equipment appraiser can tell you what the machines are in fact worth, but ask first what would need replacing in the next few years and who can service the older machines.
Sourcing and quality records
Ask where seals, rods and tubing come from, and whether one supplier would be hard to replace. Review turnaround times and the warranty-return log. A rebuild that fails costs the shop its customer’s downtime as well as the repair, so a pattern of repeat returns tells you more than the owner’s description of the quality.
Customers and seasons
Many shops lean on a few heavy-equipment, forestry, mining or farm customers, and their busy seasons follow the customers’ own. Ask which accounts matter most, how long they have used the shop, and how the shop copes when the season is slow. Pair this page with what to check before buying a mobile hydraulic hose repair business if the shop also does hose work.
The machinists
The people who hone, weld and test the cylinders carry the skill. Ask who they are, how long they have stayed and what the owner does at the shop. If one machinist does the hardest work, ask whether that person would stay, and plan the handover with your lawyer.
Related reading
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentEquipment purchase financing for entrepreneurs
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