Plastic Injection Molding, 32-Year Colorado Short-Run Shop with DoD Contracts

$500K

SDE

1.1x

Multiple

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Full Editorial Writeup

This is a 32-year-old plastic injection molding shop in Longmont, Colorado, built around a specific and defensible niche: short-run production runs of 250 to 5,000 parts paired with in-house aluminum tooling. That focus is deliberate. High-volume molders chase millions of parts at razor-thin margins, while short-run work commands better pricing because fewer competitors want the setup headaches and smaller batch economics. The business has used that positioning to win defense sector contracts, including Department of Defense work, which brings customers who value reliability and qualified suppliers over lowest price.

The operation runs out of a 6,000 sq ft leased facility and is fully equipped: four injection molding machines ranging from 40 to 200 US tons, each with dryers, mold temperature units and chillers, plus a complete tool room of conventional and CNC mills, EDM, lathe and grinder. The ability to cut its own aluminum tooling in-house is the real moat here. It means the shop controls lead times and captures tooling revenue rather than outsourcing it, which is exactly what defense and specialty customers pay up for.

The catch, and the opportunity, is that this is a true one-man operation generating $500,000 in SDE at a $525,000 asking price, roughly a 1.05x multiple. The 82-year-old owner is selling for age reasons and openly states the equipment can produce far more than he currently runs. A buyer is essentially paying one year of earnings for a cash-flowing asset base plus a book of qualified defense relationships, with meaningful unused capacity sitting idle.

Why we like it

At $525,000 for $500,000 in SDE, you are buying this at roughly 1.05x cash flow, which means you recover the purchase price in about a year if earnings hold. That is extraordinary downside protection for an asset-backed manufacturing business, and the hard equipment alone (four molding machines, CNC mills, EDM, lathe) likely approaches or covers the asking price.
The short-run, aluminum-tooling niche is genuinely defensible because high-volume molders do not want 250 to 5,000 part runs and the setup economics scare off casual competitors. In-house tooling capability lets the shop control lead times and capture tooling margin rather than outsourcing it, which is precisely what defense customers are willing to pay a premium for.
Defense and DoD contract work is about as recession-resistant as manufacturing demand gets, since government procurement cycles do not track the consumer economy and qualified suppliers are sticky once approved. A 32-year operating history in the same building signals the supplier relationships and quality track record that defense buyers demand.
This is a single-operator business running well below capacity by the owner's own admission, which is the clearest kind of operator upside. A buyer who simply adds a second shift, a salesperson, or a working partner can lift revenue substantially on equipment that is already paid for and only 2 to 5 years old.

How to improve it

Install basic sales capacity immediately, because the single owner has no business development function and demand is clearly leaving the table. A single quoting-and-outreach hire or outside rep targeting defense primes and specialty OEMs could fill idle machine hours with minimal incremental cost.
Pursue formal supplier qualifications and certifications (ISO 9001, AS9100, ITAR registration) within the first year to unlock larger and more defensible defense and aerospace contracts. These credentials widen the moat and let you bid work this shop currently cannot access.
Run a true second shift on the existing machines to attack the stated excess capacity. The fixed costs of rent, machines and tooling are already absorbed, so incremental runs drop to the bottom line at high margins once direct labor and materials are covered.
Rebuild the customer concentration picture and diversify, because a one-person shop with DoD exposure likely leans on a handful of accounts. Add commercial short-run customers in medical, electronics and industrial to reduce reliance on government cycles and smooth revenue.
Resolve the lease and location question before closing, since only one year remains on the $9,900 per month lease and the business is relocatable. Negotiate a multi-year renewal or plan a move with equipment-moving budget so the transition does not disrupt production or customer deliveries.
Document all tribal knowledge during the owner's transition, including tooling setups, mold specs, machine parameters and customer preferences. An 82-year-old sole operator holds decades of undocumented process knowledge that must be captured in writing and video before he fully exits.
Introduce simple shop-floor systems for quoting, scheduling and job costing to replace what is almost certainly run from the owner's head. Better data on per-job margins will let a buyer price aggressively on high-margin short runs and walk away from money-losing work.

Diligence notes

Revenue is not disclosed and $500,000 SDE on a one-person shop implies either very high margins or an unusual cost structure, so demand three years of tax returns and financial statements to confirm the earnings are real and sustainable. Verify how much of SDE is the owner's labor that a buyer would have to replace or pay for.
Quantify customer concentration and the DoD contract structure, because defense work can be project-based rather than recurring and a single large contract rolling off could gut earnings. Confirm whether contracts transfer to new ownership and whether supplier qualifications are tied to the owner personally.
Assess key-man risk directly, since this is an 82-year-old sole operator and nearly all operational knowledge, customer trust and machine expertise sits with him. Confirm the depth and length of transition support in writing and whether he will stay on through a meaningful handover period.
Verify the condition, ownership and value of the equipment independently, including whether all four machines and the tool room are owned free and clear with no liens. The 2 to 5 year age claim on larger equipment should be confirmed against serial numbers and maintenance records.
Pin down the lease and relocation realities given only one year remains at $9,900 per month and the business is described as home-based and relocatable. Understand the true cost and downtime of moving heavy molding machines plus a 6,600 lb lift if a renewal cannot be secured.
Clarify why a business generating $500,000 in SDE is priced at only 1.05x, which is unusually low and may reflect buyer concerns about transferability, customer stickiness, or earnings durability. Probe whether the low multiple signals hidden risk or simply a motivated, aging seller who wants a quick clean exit.

Source

Originally listed on BizBuySell. View original listing →