What should I check when buying a small owner-run machine shop?

The seller’s guides tend to cover the whole sale. A buyer of a one- or two-person shop has a narrower question: what am I really getting if the person who does everything leaves? Customers know the owner, programs live on the owner’s computer and quotes come from the owner’s experience. The checks below are about separating the shop from the person.

What leaves with the owner

List the jobs the owner does in a week: quoting, programming, setup, inspection, calling customers. For each, ask whether you could do it, whether someone else could, and where the knowledge is written down. Programs, setup sheets and customer drawings that live only in the owner’s head or on one machine are a risk you should price into your decision, with your advisers.

Transition and training

Ask how long the seller will stay on and what they will do. A longer handover gives time for real introductions to customers and suppliers. Your lawyer can put the arrangement in writing. If you have never run a shop, be honest about how long it would take you to learn the machines.

Customers, machines and tooling

In a shop this small, a few customers may account for most of the work. Ask who they are and whether they have been told about the sale. Then look at the machines: age, hours, service history and what the controls run on. Ask what tooling, fixtures and software licences are included, and whether any are leased.

Questions worth asking early

• Which customers would follow the owner, and which would stay with the shop?
• Which programs and setups exist in writing, and where are they stored?
• What equipment is owned outright and what is financed or leased?
• Will the seller introduce you to customers before closing?