Which production line equipment should I test at a small co-packer?
Test the machines that every run depends on first: fillers, sealers, mixers or cookers, labellers and cooling or freezing gear. Ask to see each one run a full batch, check the maintenance log and ask which machine would stop the plant if it failed.
Equipment is a large part of what you are buying, so go beyond a walk-through. Ask for a demonstration run on a normal product and watch for jams, leaks, noise, slow cycles and rejected units. Bring a technician if you can, since a trained eye spots wear that a buyer misses.
Prioritise the single points of failure. If only one filler or one sealer serves the whole plant, find out its age, its parts supply and how long a repair would stop production. Ask for service history and any records of breakdowns. Look at the support gear too: scales, metal detectors, temperature monitors and the cleaning systems. Check that measuring devices are calibrated and that records exist. Ask whether any equipment is leased, financed or owned by a client, since that affects what you are actually buying. An equipment valuation can help you judge condition. If you plan to borrow, ask a lender what they need to see on equipment financing. Ask for spare parts on hand and the name of whoever repairs each machine, because a quick fix often depends on a person who knows the line.
Key takeaways
- Watch each key machine run a full batch.
- Find the single points of failure and check their service history.
- Ask whether any equipment is leased, financed or owned by someone else.
- Ask what spare parts are kept and who repairs each machine.
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Financing
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 CanadaGovernmentEquipment purchase financing for entrepreneurs
- 03Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 04Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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