An article by Bill Murray

I am a huge college football fan. I also played college football and later coached the game at the pee wee and high school levels. After spending more than four decades managing manufacturing operations, I suppose it’s inevitable that I occasionally look at business through a football coach’s eyes.  Football truly is the game of life!

And lately I’ve been wondering: What if offsite manufacturing had a transfer portal?

College football has changed dramatically. Coaches still recruit talented high school players and develop them, but the transfer portal now allows them to fill critical positions with players who have already taken college snaps, played in big games and demonstrated that they can perform.

The numbers are remarkable. ESPN reported that Power Four programs added more than 13,000 career starts and 930,000 Division I snaps through the transfer portal entering the 2025 season. Indiana coach Curt Cignetti has been particularly outspoken about valuing proven production over potential, putting a premium on players who have demonstrated that they can perform consistently.

Cignetti certainly isn’t opposed to developing young players. But when experience is needed now, he goes looking for it. His success is perfect proof of the concept.

There is a lesson there for offsite manufacturing.

We Build the Factory. Then What?

I’ve watched millions of dollars invested in offsite manufacturing facilities over the years. Buildings are constructed or purchased, sophisticated production equipment is installed, automation is added, and consultants and engineers help design impressive manufacturing systems.

Then somebody has to actually run the business.

That’s where I’ve seen some surprisingly thin rosters.

The founder or major investor may become the general manager. A successful general contractor who knows how to build houses becomes the production manager. Sales consists largely of the founder’s contacts and relationships. Procurement becomes somebody’s additional responsibility. Accounting may be handled by competent financial people who have little understanding of construction or manufacturing economics.

These can all be talented, intelligent people. That’s not the issue.

Offsite manufacturing is just that—manufacturing. It is a process. It isn’t conventional construction moved inside a building.

A good GC understands how to build. That doesn’t necessarily mean he or she understands production flow, labor utilization, material movement, throughput, manufacturing scheduling and the daily coordination required among sales, engineering, procurement and production.

Those lessons can be learned. The question is how much money will be spent while they’re being learned.

One Transfer Doesn’t Build a Roster

Several years ago I encountered an overseas operation that remains one of the more extreme examples I’ve seen. The owner had invested in a world-class manufacturing facility designed with experienced industry expertise. He had even gone to the transfer portal and recruited an experienced plant manager from a competitor and paid what was necessary to get him.

He had his manufacturing quarterback. What he didn’t have was the rest of the roster.

There was virtually no sales organization. Procurement lacked experienced leadership. The financial side of the business lacked an understanding of construction and manufacturing economics, which contributed to misguided profit analysis and financial projections.

One experienced plant manager couldn’t compensate for all of that any more than one great quarterback can compensate for weaknesses throughout a football team.

A CEO I worked with years ago had a mantra I’ve never forgotten:

“Build the Team and the Team Will Build the Business.”

I’ve seen enough operations succeed and fail to believe he had it right.

But We Can’t Afford the Transfer Portal

I suspect that’s exactly what some offsite startups are thinking. Experience costs money, and when millions are already going into buildings, equipment and startup expenses, experienced management can look like another cost that can be deferred.

I understand the calculation. I’m not sure it’s the right one.

The real comparison isn’t simply between the salary of an experienced production manager and someone learning the job. It’s the cost of experience compared with the cost of missed schedules, poor estimating, excess labor, material problems, inadequate sales and production that never reaches the assumptions buried in the pro forma.

That doesn’t mean every management position needs an expensive industry veteran. College football teams haven’t stopped recruiting freshmen, and offsite companies shouldn’t stop developing talented people.

The question is where you can afford inexperience—and where you can’t.

Cinderella Is Fun to Watch

Bill Murray, Advisor, [email protected]

College football occasionally gives us that wonderful Cinderella story. An overlooked team loaded with players nobody expected to win comes together, knocks off the favorite and reminds us why they play the games.

Startups occasionally do it too.

But Cinderella isn’t much of a business plan.

Factories consume cash while people learn. Payroll continues, equipment payments continue and customers don’t particularly care that the management team is still gaining experience. Every month spent learning lessons that someone else has already learned can be an expensive month.

Potential matters. So does developing people. But today’s best college football programs have figured out that developing talent and acquiring proven experience aren’t competing strategies. You need both.

Perhaps offsite manufacturing should take another look at the same playbook.

Before opening day, take another look at your depth chart.

Have you built the roster that can build the business?

A developer once came to me with what seemed like a straightforward assignment. He wanted to build a project using modular construction and needed help finding the right manufacturer.

I had spent most of my career in offsite manufacturing, so finding and evaluating manufacturers was familiar territory. I began the engagement assuming the developer understood more about offsite construction than he actually did. It turned out to be a classic case of putting the cart before the horse—and I had made the same mistake.

He knew he didn’t know everything about modular construction. What neither of us recognized at the outset was just how much he didn’t know—and how much of that needed to be understood before we ever started looking for a manufacturer.

As we got further into the project, questions began surfacing that should have been addressed much earlier. The local building requirements were particularly demanding, including materials and construction practices the manufacturers we approached didn’t commonly use. The regulatory process itself created another layer of complexity, and most manufacturers simply weren’t interested in taking it on.

After spending considerable time trying to make the pieces fit, I eventually gave the developer advice he didn’t particularly want to hear: I didn’t believe modular construction was the right solution for this project. He decided to continue pursuing it anyway. Many months later, ground still hasn’t been broken.

The experience reinforced something I’ve seen repeatedly during more than four decades in this industry. Developers sometimes begin their offsite journey by asking questions that should come much later. “Who can build this for me?” is one of them.

Offsite Is a Delivery Decision, Not a Purchasing Decision

One of the most persistent misconceptions about offsite construction is that moving work into a factory should automatically make a project less expensive. It may, but the mistake often happens when the factory’s price is viewed as the cost of the building.

It doesn’t. It represents the manufacturer’s scope of work, and what that scope includes can vary substantially from one manufacturer or system to another. Everything the factory doesn’t provide still has to happen somewhere—and somebody has to pay for it.

Transportation, setting, foundations, utility connections, site work, finish work and numerous other responsibilities may fall elsewhere. The dividing line between factory scope and field scope becomes enormously important, yet I’ve seen projects move surprisingly far down the road without everyone having the same understanding of where that line actually is.

A factory invoice that looks attractive can become considerably less attractive once you add the rest of the project.

The Building Has to Fit the Process

Another common mistake happens even earlier. A developer hires an architect, develops the project, and then decides to investigate whether the building can be manufactured offsite. They send the drawings to manufacturers, expecting someone to figure out how to build it.

Sometimes they can, but often changes are needed to accommodate the manufacturing process. By then, the architect and developer may already be invested in a design they don’t particularly want to change. Much of that friction is avoidable if you introduce manufacturing considerations earlier.

Manufacturing isn’t simply conventional construction performed underneath a roof. Every offsite system has parameters. Production equipment, material flow, engineering, transportation, module dimensions, panel sizes and plant capabilities all influence what can be efficiently manufactured.

Forcing a building designed without those considerations into a manufacturing process can quickly erode the efficiencies that attracted the developer to offsite construction in the first place.

That doesn’t mean the factory should design the building. It means manufacturing needs to become part of the conversation early enough to matter.

“Offsite” Doesn’t Describe a Building System

Another problem is how the industry talks about offsite construction. We frequently use offsite as though it describes a particular product. It doesn’t.

Volumetric modular, panelized construction, light-gauge steel systems, components and HUD-code construction can all involve manufacturing portions of a building away from the jobsite. Beyond that common characteristic, they can be very different animals.

Those differences affect design, engineering, transportation, erection, code compliance, financing, scheduling and the work that remains to be completed in the field. Understanding those differences matters before a developer commits to a particular approach.

The question therefore shouldn’t begin with, “Should we use offsite?” It should begin with the project itself.

What are we trying to build? Where are we building it? What does the jurisdiction require? What constraints does the design create? What portions of the work can realistically benefit from manufacturing, and what will still have to happen on site?

Only after understanding those issues does it make much sense to decide which offsite approach—if any—belongs in the conversation.

Sometimes the Right Answer Is No

THE FINAL QUESTION

Bill Murray, Advisor, [email protected]

People who make their living in an industry naturally tend to advocate for it. I’ve spent most of my working life in offsite construction, and I believe strongly in what manufacturing can bring to building. But that doesn’t mean every building should be manufactured.

A project can be too small, too geographically difficult, poorly suited to available manufacturing capacity or burdened by regulatory requirements that eliminate much of the expected advantage. A particular design may simply be a bad fit for the manufacturing systems available to the developer.

Recognizing that before committing substantial time and money isn’t a failure of offsite construction. It’s good development.

The best offsite projects I’ve encountered weren’t successful simply because somebody found a good factory. They worked because the design, manufacturing process, scope of work, site construction and project requirements were understood as parts of the same delivery system.

Before asking who should manufacture your building, ask the more important question: Does offsite really fit this project?

Sometimes the idea of selling a business doesn’t begin with the owner at all. An M&A firm makes an unexpected call. A potential buyer expresses interest. A competitor sells. Suddenly, something that had always been somewhere off in the distance becomes a real possibility.

Often, though, that outside event simply brings to the surface thoughts that were already there. After years of running the same business, the owner is tired. Financial results may have slipped, problems that once would have been attacked aggressively aren’t getting the same attention, and the enthusiasm required to make another round of changes isn’t quite what it used to be.

That’s when the owner begins asking, “Maybe it’s time?” But considering a sale and being ready to sell are two very different things.

WHY ARE YOU THINKING ABOUT SELLING?

Before talking about valuation, potential buyers, multiples, or marketing the company, I think we need to have a more basic conversation. Why is the owner considering a transition in the first place?

There isn’t a wrong answer. Age, burnout, declining financial performance, family circumstances, the absence of a successor, or simply wanting to do something different can all be perfectly legitimate reasons. Sometimes an unsolicited inquiry is enough to cause an owner to seriously consider a possibility that had previously been little more than a passing thought.

What matters is understanding whether the owner genuinely wants to make a transition or is simply attracted to the idea of one. Until that distinction becomes reasonably clear, discussions about valuation and potential buyers may be getting well ahead of the most important decision.

SELLING THE BUSINESS CHANGES MORE THAN YOUR BALANCE SHEET

For someone who has spent 20, 30, or 40 years building and running a company, selling isn’t simply a financial transaction. The business may determine where you go every morning, who you talk to every day, the problems you’re responsible for solving, and a significant part of how you define yourself.

Then there is the practical question: What comes next? Family financial responsibilities may remain, continuing income may be important, or the owner may simply have no interest in retiring. Even when the financial terms make sense, the owner still has to picture what life looks like after the transition is complete.

Those aren’t reasons not to sell. They are reasons to understand what you’re really deciding before beginning a process that becomes increasingly difficult to stop once advisors and prospective buyers become involved.

THE BUSINESS AND THE OWNER CAN BE ON DIFFERENT TIMETABLES

Throughout this series, we’ve looked at many of the things that can make an offsite manufacturing business more—or less—attractive to a prospective buyer. We’ve considered first impressions, owner dependency, management depth, financial information, customers, systems, costs, and the enterprise’s overall health.

A company can be well positioned in many of those areas and still have an owner who isn’t ready to sell. The opposite can also be true. An owner may be completely ready to move on, while the business itself needs considerable work before it can go to market.

Recognizing that difference early matters. If the owner isn’t emotionally prepared to make a transition, months of preparing information, talking with buyers, and negotiating terms may simply lead everyone back to the question that should have been answered at the beginning: Do I really want to sell?

THERE’S NOTHING WRONG WITH NOT BEING READY

Owners sometimes feel that once they’ve started exploring a sale, they’re somehow committed to following through. They’re not. A conversation about transition can result in the perfectly reasonable conclusion that now isn’t the time.

Discovering that early may be one of the most valuable outcomes of the process. It gives the owner an opportunity to address weaknesses in the business, strengthen management, improve financial performance, and think seriously about what the next chapter should look like. Six months or two years later, both the owner and the business may be better prepared.

KNOW WHAT YOU HAVE BEFORE DECIDING WHAT TO DO WITH IT

Once an owner decides they genuinely want to pursue a transition, another basic question follows: What exactly do I have to sell?

A factory, equipment, backlog, and financial statements are part of the answer, but they don’t define the entire enterprise. Management depth, customer relationships, systems, culture, operational discipline, and the business’s ability to perform without constant owner involvement all influence what a prospective buyer is really considering.

Understanding those strengths and weaknesses before entering the market gives an owner something equally important: choices. Problems can be addressed before a buyer discovers them, expectations can become more realistic, and the owner can decide whether selling now—or improving the business first—is the better course.

THE FINAL QUESTION

Bill Murray, Advisor, [email protected]

Preparing a business for ownership transition takes work. Preparing the owner may be just as important.

Before asking what your company is worth, who might buy it, or how quickly a transaction could be completed, start with the questions that don’t require a spreadsheet: Why am I considering selling? Do I really want to do it? And what do I want life to look like afterward?

Then comes one final question: If the right buyer showed up tomorrow, are you actually prepared to say yes?

Thinking About the Future of Your Offsite Business?

You don’t have to decide today that you want to sell in order to begin thinking seriously about transition. Understanding where both you and your business stand before making that decision can create considerably more options later.

At Offsite Innovators, we work confidentially with owners who are considering what’s next—whether that means preparing for a sale, positioning the business for a future transition, or simply determining whether the time is right to begin the conversation. If you’re asking yourself some of these same questions, we’d welcome a confidential conversation.

Part 3 of the Offsite Innovators Business Transition Series

In the first two articles of this series, we looked at what creates value in an offsite manufacturing business and how buyers begin forming opinions long before they review financial statements or step onto the production floor.

Now it’s time to ask a more difficult question.

Is your business too dependent on you?

Some owners answer that question quickly. “No, my team handles most of the day-to-day operations.” The better question, however, is this:

Is the business running you, or are you running the business?

There is an important difference.

I’ve walked through manufacturing facilities where it becomes obvious within the first hour that every meaningful decision eventually finds its way back to the owner’s office. The phone rings constantly. Employees stop by with seemingly simple questions, with obvious answers. Department managers ask for approval on routine matters. Even while touring the production floor, line employees interrupt to ask where my prints, or where are these materials located?   None of those interruptions seems significant by itself, but collectively they tell a very different story about how decisions are really being made throughout the organization.

THE OWNER HAS BECOME THE BOTTLENECK

Many owners wear those interruptions as a badge of honor. They believe being involved in every decision demonstrates commitment and leadership. It often demonstrates something else entirely.

If every purchasing decision requires the owner’s approval, does the purchasing manager really manage purchasing? If production supervisors can’t solve routine issues without finding the owner, are they truly leading production? If every customer concern, transportation issue, scheduling question, or personnel decision eventually reaches the owner’s desk, then the organization hasn’t delegated responsibility—it has simply distributed tasks.

Responsibility without authority isn’t leadership. It’s dependency, and dependency creates a business that revolves around one individual instead of a management team.

THE BEST-RUN BUSINESSES LOOK DIFFERENT

Well-managed businesses have interruptions too. Manufacturing is dynamic, and unexpected issues arise every day. The difference is that most of those issues are resolved by the people responsible for that department. Good owners don’t disappear from the business; they build an organization that knows how to function without requiring their constant involvement.

One of the first things I often ask to see is the organizational chart. Then I ask to meet the department heads. It’s a simple request, but it tells me a great deal about how the company is managed. On one recent visit, there were only two department heads to meet. That immediately raised questions about how decisions were being made throughout the rest of the organization.

Strong systems, meaningful management information, and capable department leaders don’t cause an owner to lose control of the business—they provide better control while requiring less direct involvement. Owners maintain a clear pulse on every department without becoming the heartbeat of the organization.

BUYERS NOTICE THIS IMMEDIATELY

Sophisticated buyers understand that the future value of a company depends on more than its financial performance. They’re evaluating whether the business can continue operating successfully after ownership changes. Importantly, will the current owner remain in place to allow a proper and comfortable transition.

Less experienced buyers often focus almost entirely on buildings, equipment, and financial statements. Those things certainly matter, but they don’t reveal whether the organization has the leadership depth to continue performing when the owner is no longer making every decision.

One question often reveals more than a stack of financial reports:

“If the owner disappeared for ninety days, what would happen?”

The answer tells buyers far more than most owners realize.

BUILDING VALUE MEANS BUILDING LEADERS

Every owner eventually reaches a point where working harder no longer solves the problem. Growth requires something far more difficult: trusting capable people, investing in experienced managers, and giving them both responsibility and the authority to make decisions.

That investment certainly increases overhead, but it also increases the long-term value of the business. Owners who understand that distinction aren’t simply building a company that performs well today—they’re building one that others will have confidence owning tomorrow.

THE BOTTOM LINE

Every phone call that only the owner can answer, every routine decision that waits outside the owner’s office, and every department that cannot function without approval quietly tells a buyer that the business depends on one person.

Owners often believe they’re making themselves indispensable. In reality, they may be making their business less valuable. The most valuable companies aren’t built around one individual. They’re built around capable people, sound systems, and leaders who have both the responsibility and the authority to make decisions.

Thinking About the Future of Your Offsite Business?

Whether you’re planning an ownership transition in the near future or simply want to build a stronger, more valuable company, the decisions you make today will shape your options tomorrow.

At Offsite Innovators, we help owners evaluate, prepare, and position their businesses for ownership transition. We’d welcome the opportunity for a confidential conversation about your business and the steps that can strengthen its long-term value.

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What’s My Offsite Business Worth?

An article by Bill Murray

Over the past few years, Gary Fleisher and I have had the opportunity to help owners think through one of the biggest decisions they’ll ever make—what comes next for their offsite business.

Some are actively considering a sale. Others simply want to understand what their business might be worth someday. A few aren’t interested in selling today but recognize that preparing early often leads to better options later. What’s been interesting is that, regardless of where they are in the process, they tend to ask many of the same questions.

Rather than answering those questions one owner at a time, I thought I’d begin addressing some of them here, drawing on more than forty years of leading offsite manufacturing operations and the advisory work Gary and I have been doing over the past several years.

“Bill, what do you think my business is worth?”

It’s an understandable question. If you’ve spent years—perhaps decades—building an offsite business, naturally you want to know what it’s worth.

My answer, however, usually isn’t what owners expect.

Before we talk about value, we need to talk about what creates value.

Those aren’t necessarily the same thing.

During my career, I’ve learned that two companies can build roughly the same number of homes, generate similar revenues, and even report comparable profits, yet one may be significantly more attractive to a buyer than the other.

The reason is simple.

Buyers don’t evaluate a business the same way owners do.

Owners naturally focus on what they’ve built. Buyers focus on the risk they’re assuming.

When I walk through a business, I’m not immediately thinking about equipment values or the financial statements. I’m watching the operation. Does production move with purpose? Do supervisors appear confident in their responsibilities? Does the organization rely on well-defined processes and systems, or does every important decision still depend on the owner? Does the business reflect discipline and accountability, or does it seem like people are simply reacting to the latest problem?

None of those observations determine value by themselves. Together, however, they begin telling an important story. Every serious buyer is trying to answer one fundamental question:

Can this business continue to succeed after the current owner steps away?

I’ve often said that buyers aren’t simply purchasing equipment, inventory, or even a building.

They’re buying confidence.

Confidence that the business is well managed. Confidence that capable people are making good decisions throughout the organization. Confidence that effective processes and systems are supporting consistent performance. Confidence that the business isn’t dependent upon one individual.

Even something as difficult to measure as organizational culture contributes to that confidence. I’ll spend more time on that subject in a future article because I believe it’s one of the most overlooked drivers of long-term business value.

One point often surprises owners. Value isn’t created during negotiations. It’s created long before a buyer ever walks through the front door. The businesses that attract the strongest interest have usually spent years building capable leadership, establishing effective processes and systems, and creating an organization that buyers believe can continue to succeed after the ownership changes.

Those things reduce uncertainty.

And when uncertainty goes down, value generally goes up.

Whether you’re thinking about transitioning your business next year or simply beginning to consider your long-term options, it’s worth stepping back and asking yourself one important question:

If I were the buyer, would I be confident buying my own business?

CLICK HERE for a free confidential video consultation

Next in this series: Why businesses that depend too heavily on the owner often become the hardest businesses to sell—and one of the biggest obstacles to maximizing value.

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