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?

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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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Over the past several months, I’ve spoken with several modular factory owners, managers, and developers considering vertical integration into manufacturing.

In almost every conversation, I hear some version of the same statement:

“I’m buried.”

“There just aren’t enough hours in the day.”

“Things are completely crazy right now.”

Anyone who has spent time in manufacturing understands that pressure comes with the territory. Modular factories are complicated operations. Production schedules shift. Vendors miss deliveries. Service issues arise. Engineering changes happen. Customers want answers immediately.

Busy is normal.

But after more than 40 years around manufacturing operations, I’ve learned there’s an important difference between productive pressure and organizational dysfunction.

Oftentimes, the problem is not the workload.

Sometimes the problem is the organizational chart.

THE ORG CHART REVEALS MORE THAN MOST PEOPLE THINK

Most people look at an organizational chart as little more than boxes, titles, and reporting lines.

Experienced operators tend to see something very different.

A good organizational chart reveals:
• delegation,
• accountability,
• communication flow,
• leadership depth,
• and operational maturity.

More importantly, it reveals whether the organization is built to function through managers — or whether everything still depends on ownership.

That distinction matters.

Especially in modular manufacturing, where operational complexity compounds quickly.

Factories rarely struggle because of one major issue. More often, they struggle because too many decisions, too many problems, and too much responsibility are handled by too few people.

Eventually, the organization becomes dependent on the owner or GM for nearly everything.

That is where exhaustion begins.  “Too busy” is a reality.

WHEN OWNERSHIP WEARS TOO MANY HATS

One of the most common situations I encounter is an owner or GM simultaneously acting as:
• sales manager,
• production manager,
• problem solver,
• customer relations department,
• and operational traffic controller.

In startup operations, some overlap is unavoidable. Financial realities often require people to wear multiple hats early on.

But many companies never evolve beyond startup structure.

That is where trouble begins.

At a minimum, even smaller operations need clear accountability around:
• production,
• purchasing,
• sales,
• and financial management.

As companies grow, engineering management, service management, and quality assurance quickly become essential leadership roles.

Without those layers, nearly every operational issue eventually flows upward to ownership.

And over time, employees unintentionally become conditioned to stop solving problems independently.

The response becomes:

“Ask the boss.”  (And the boss really is “too busy”.)

“ASK THE BOSS” IS USUALLY A WARNING SIGN

I’ve walked through factories where ownership could barely move through the facility without being interrupted every few minutes.

Questions about production scheduling.

Questions about purchasing approvals.

Questions about service issues.

Questions that should have already been solved lower in the organization.

At first glance, some people interpret that constant interruption as leadership or dedication.

I often see it differently.

I see an organization lacking sufficient delegation and management depth.

Healthy manufacturing organizations are not built around one exhausted person making every important decision. They are built around trusted managers who understand and have agreed to their responsibilities and have the authority to act on them.

That is what a healthy organizational chart actually reflects.

Not titles.

Trust.

WHEN SALES AND PRODUCTION REPORT TO THE SAME PERSON

This is another issue that quietly creates problems inside many modular operations.

Sales and production naturally operate with different priorities.

Sales focuses on:
• customers,
• commitments,
• customization,
• and backlog growth.

Production focuses on:
• scheduling discipline,
• labor efficiency,
• consistency,
• throughput,
• and execution.

That tension is healthy when responsibilities are clearly separated.

But when one individual controls both sales and production, accountability lines quickly blur.

Production delays become harder to evaluate objectively. Scheduling problems become easier to rationalize. Operational discipline begins to erode quietly within the organization.

And eventually, the factory starts reacting instead of operating.

That disconnect may not show up immediately on financial statements.

But it almost always shows up eventually on the production floor.

THE TRUE TEST OF ORGANIZATIONAL HEALTH

I’ve always believed the real test of a company’s organizational health is simple:

What happens when the boss leaves the building or takes time off?

Can the company continue operating effectively when ownership is traveling?

Can managers solve problems without constant approval or looking over their shoulder?

Can production continue moving without daily intervention from the owner or GM?

Or does decision-making slow down until the boss returns?

Developers considering modular manufacturing often focus heavily on equipment, production capacity, automation, and backlog.

Experienced operators often study the organizational structure first.

Because machinery alone rarely determines whether a factory succeeds.

People, delegation, accountability, and leadership depth do.

And when those things are missing, owners eventually find themselves saying the same thing over and over again:

“There just aren’t enough hours in the day.”

But sometimes the problem is not time.

Sometimes the problem is structure.

So here’s the real question:

If you stepped away from your operation for a week, would the company continue to function effectively — or would everything begin to bottleneck around your absence?

At Offsite Innovators, we continue exploring the operational realities, risks, and opportunities shaping the offsite construction industry. We welcome conversations with factory owners, developers, and industry leaders navigating growth, operational challenges, and the evolving realities of offsite manufacturing.

Bill Murray

Contact Bill

Bill Murray has over 40 years of operational management experience in the Modular industry.  Bill began his Offsite career as a contractor/builder.  He then entered the manufacturing side, quickly advancing through the sales ranks to become a General Manager/COO of multi-plant operations.  Bill provides professional advisory service to owners, prospective owners and builder developers considering Offsite construction.  He has consulted throughout the U.S., and Mexico, as well as overseas assignments.

If you’re evaluating offsite construction—whether LGS, wood, or hybrid—and want a clear, experience-based perspective before making a commitment, reach out. A short conversation upfront can prevent costly assumptions later.

photo- Eco-Panels

In my previous article, I introduced what I refer to as the scope gap—the difference between what the modular factory delivers and what must still be completed on site to obtain a Certificate of Occupancy.

That gap is not theoretical.

I’ve seen it play out on real projects over the years in many different ways, but this recent example is a simple one to understand—and one that illustrates the issue clearly.

A Small Detail That Wasn’t So Small

I was working with a developer who was putting together a proposal for a 180-unit single-family modular project.

As part of his budgeting, he had included the cost of the factory, transportation, and set crew. On the surface, the developer thought all was covered.

But there was one assumption built into the proposal that turned out to be incorrect.

He assumed that the set crew’s scope of work included completing the roofing.  The proposed set crew contract said “buttoned up” and he didn’t ask what that actually meant.

That phrase sounds clear enough—but in practice, it can mean different things depending on how the scope is defined.

In this case, the manufacturer was providing 24-inch roof overhangs that were shipped as “flipped” assemblies. The set crew would flip those overhangs into place and install a waterproofing membrane.

Technically, the structure would be “buttoned up.”

But it would not be fully finished.

The installation of the final two rows of shingles on those overhangs was not included in the set crew’s scope.

That responsibility fell to the builder.

The cost to complete that work was approximately $160 per home.

Not a large number on its own.

But across 180 homes, that added up to $28,800 in additional site cost that had not been included in the original proposal.

What This Example Reveals

Nothing about this situation was unusual. I’ve seen similar examples dozens of times over the years.

The factory performed as expected.
The set crew performed as contracted.

The issue was simply this:

The scope was not defined with enough precision.  The manufacturer’s building system was neither explained nor understood. 

A single phrase—“buttoned up”—was interpreted differently by different parties.

And that difference created a gap.  A potentially costly gap.

Not in construction.

But in understanding.

Why These Gaps Matter

In traditional construction, gaps like this sometimes get worked out over time.

In modular construction, they don’t.

The factory is moving.
The schedule is compressed.
Decisions happen earlier.

If the scope is not clearly defined up front, the impact shows up later—when changes are more difficult and more expensive to address.

What looks like a small oversight early in the process can become a meaningful cost item when multiplied across an entire project.

A Practical Takeaway

Developers considering modular construction should approach scope definition with one simple mindset:

Assume nothing. Define everything.

Especially when it comes to:

• what the factory is delivering
• what the set crew is responsible for
• what work remains on site
• who is responsible for completing that work

Phrases like “buttoned up,” “substantially complete,” or “ready for finish” may sound clear—but they often leave room for interpretation.

And in modular construction, interpretation is where problems begin.

Over more than four decades in the modular industry, I’ve seen how early decisions—particularly around scope, coordination, and factory selection—can shape the outcome of an entire project. For developers and builders considering modular construction, bringing experienced perspective into the planning process can help avoid costly missteps and lead to better results.

If you are serious about continuous improvement, reach out to us via email.  We’ll schedule a brief phone call to explore the possibilities.  Contact Gary at: [email protected], contact Bill at:[email protected]. We’ll respond promptly and schedule a brief call.