Learning Modules for Equitable Acquisitions in Manufacturing

Across the United States, 125,000 manufacturing firms—and the 2.6 million jobs they support—are at risk of disappearing as more and more owners reach retirement age without a plan for business succession. This potential loss includes well-paying jobs as well as important production facilities necessary for strengthening regional supply chains and for anchoring neighborhoods with production-based businesses, many of which reflect the culture of a place. These jobs are concentrated in small- and medium-sized manufacturing businesses where owners are quickly approaching retirement age without clear succession plans. These business owners are often so busy working “in” the business, rather than “on” the business, that they are unprepared for retirement or unplanned interruptions like health issues or economic disruptions. This lack of preparation can lead to immediate and shocking consequences for owners, workers, and communities. The scale of this challenge is particularly significant because manufacturing jobs have historically provided an employment pathway to the middle class by having a lower barrier to entry in terms of educational requirement or experience. According to the National Institute of Standards and Technology, 75% of manufacturing employment does not require a four-year college degree. This makes manufacturing uniquely valuable in an economy where many growth sectors increasingly demand higher educational credentials. Additionally, entry-level positions in manufacturing have a clear career progression and compensation packages well above retail or other service sectors. The Economic Policy Institute found that manufacturing workers earn 13% more in hourly compensation (including both wages and benefits) than comparable workers earn in the rest of the private sector. Further, modern manufacturing facilities are (or can be) located on main streets or in urban neighborhoods which are connected to public transportation and other civic infrastructure. This accessibility improves workforce availability and lower barriers to connectivity. Manufacturing facilities located in rural communities are often its largest employer. When they shutter, this has a significant negative impact for workers, families, and local revenues. 

When a manufacturing company does not have a clear plan for succession, the owners, often having amassed significant value in the real estate the business occupies, liquidates the business and uses the proceeds from the real estate as retirement. This ‘path’ is taken too often because, unlike entrepreneurship centers and small business support centers that offer technical assistance for growing a business, there is a lack of resources or support to help a business owner sell their company or acquire another complimentary one. 

In sum, this demographic shift of retiring owners threatens to accelerate existing inequalities and further widen the racial wealth divide. Further, the manufacturing sector plays a unique and vital role in local economic ecosystems. Unlike many service sector jobs, manufacturing positions typically provide higher wages, better benefits, and stronger career advancement pathways. When these manufacturers close or are eaten up by private equity, communities lose the broader economic and social benefits that locally-owned manufacturing firms generate through their deep ties to regional supply chains and community networks.

Since 2021, UMA has co-led TEAM (Tools for Equitable Acquisitions in Manufacturing), a succession planning pilot project, in partnership with Common Future and Concerned Capital. The pilot launched in 2022 with the goal of supporting selected Community Development Financial Institutions (CDFIs) to build capacity to support succession transactions through a cohort. The participating CDFIs included Mountain BizWorks (in Western NC, including Asheville), CDC Small Business Finance (part of Momentus Capital and has a 12 state, mostly urban footprint), Community Reinvestment Fund USA (nationwide, but cohort members were focused on Minneapolis and Phoenix), and PCR Business Finance (Southern California, with a focus in Los Angeles). UMA guided this cohort of lending institutions through a curriculum about ownership transitions, while building tools and practices for future use and wider replication. This pilot not only helped prototype a program for lenders but it also revealed significant gaps in accessible educational resources for business owners—both sellers and buyers. 

Post-cohort, UMA surveyed the field of succession advisors and confirmed that there remains a gap in course material and transparency of who can effectively assist with business succession services. Therefore, UMA is developing an educational initiative to democratize best practices for manufacturing business transitions. The program's methodology centers on creating virtual, practical learning materials that guide two audiences—business owners (both buyers and sellers) and community-based lenders—through the succession planning process.

Our approach will be structured through three interconnected learning modules designed to build understanding progressively. The first component will be an engaging foundational lecture that establishes the critical importance of business retention in communities. This module will highlight how existing businesses, particularly those owned by people approaching retirement age, often lack adequate support for transition planning. It will introduce the concept of continuity planning as the essential first step toward succession and emphasize why proactive planning is crucial for preserving manufacturing jobs and capabilities.

Building on this foundation, the second module will be a detailed mini-course focused on the components and tools needed for business continuity planning. This interactive learning experience will guide participants through the concrete steps of preparing a business for potential sale or transition. Our methodology incorporates both theoretical understanding and practical application, with participants working through a comprehensive continuity planning workbook as they progress through the course. This module will also address the topic of business valuation, helping owners understand how valuations relate to sale prices and identifying specific actions they can take to improve their business' value. This module will also introduce employee ownership as a viable model for succession and will guide the participant through a series of questions and steps needed to evaluate if and what type (to one employee or a group) could be a fit for the business. 

The third module will advance essential tools for executing business transitions, structured around two components. The first will provide in-depth guidance on utilizing a letter of intent (LOI) to structure and guide ownership transitions. The second component will explore financing options with particular attention to seller financing arrangements. This advanced module will build directly on the foundational knowledge established in earlier sections while providing practical tools for implementation. This module will also contain specialized content for those looking to execute an employee ownership transition including the organizations and financial resources available for this type of transition. 

Throughout all three modules, our methodology will emphasize interactive learning and practical application. Each component will include specific calls to action that connect participants to additional resources and support. The program will deliberately create bridges between theoretical understanding and real-world implementation, ensuring participants can move from learning to action. The approach is designed to serve multiple audiences simultaneously, with content structured to be valuable for both current business owners considering transitions and community-based lenders seeking to support these transitions. The methodology recognizes these audiences may be approaching succession planning for the first time and provides appropriate context and scaffolding for learning.

The program will utilize a variety of learning materials, which could include videos, guided presentation decks, workbooks, templates, and reference materials to accommodate different learning styles and needs. These materials are designed to function both as standalone resources and as integrated components of a larger learning journey. The methodology incorporates opportunities for feedback and refinement through pre- and post-surveys of participants. This allows for continuous improvement of the materials based on real user experiences and needs. The program structure will remain flexible enough to incorporate new case studies and lessons learned as they emerge, and contingent on funding, we will connect participants to relevant advisors. 

Our program design recognizes that successful manufacturing transitions require both technical knowledge and community support. This comprehensive educational methodology supports the broader goal of facilitating manufacturing business transitions that serve both business and community needs.

• 20 firms accessing the modules within a year of completion

• 5 lenders accessing the modules within a year of completion

• At least 20 business transition support consultants in the communities where we are working

The project provides a much-needed, easily accessed set of educational materials to demystify the steps for providing the essential documents to sell, buy or finance a small manufacturing business. This provides support to an essential segment of our urban and rural economies - small manufacturing business owners of retirement age who have limited time and resources to make a plan. This initiative also incorporates the option of employee ownership into the materials in a way we have not yet seen offered. 

Through detailed case studies, practical learning modules, and templates tailored to the participants' particular business, the project will contribute to a growing body of knowledge about how to structure equitable business transitions that preserve jobs and create opportunities for expanded ownership. While our primary focus is on owners of small and mid-sized manufacturers and community lenders who serve them, we believe this material could be applied more broadly and incorporated into the offerings of small business development centers, Manufacturing Extension Partnership offices, and workshops at CDFIs.