If you’re like most dealership owners we know, you don’t like to think about selling your dealership. We get that. It’s a complicated process with a lot of emotional baggage — it can feel overwhelming.
But here’s the deal. Selling a dealership is not a decision you want to make without some forethought and solid planning. Proper preparation can mean big increases in the value you get when you do sell. So if you aren’t facing health or financial crises that are forcing your hand, you still have time to prepare to get the most out of your dealership when it’s time to sell.
Here are my Top 3 Tips for owners who want to ensure they get the highest value possible for their dealership when they decide it is time to sell:
1. Cleanup your books.
This will benefit your business now, and when it’s time to sell. When you can see everything clearly, you know where to focus your efforts. You can easily outsource this project to a professional bookkeeper asa one-off project, then get your team on board to maintain the system. As the owner, you will have a clear look at revenue, expenses, inventory -- every thing you need to raise your game and increase your profits.
Nothing gives a buyer more confidence in a potential purchase than seeing clean and clear books. Your store can stand out in a crowded buyer’s market if you do this one thing.
Additionally, it is extremely important to show a buyer steady or increasing profits through the buy/sell process. Nothing jeopardizes a deal more than a store with profits that are declining during a buy/sell.
2. Invest in your team.
Building a strong team is another way to increase profits now and later. When you give your key people professional training(through conferences or certification courses, for instance), they know you value their contribution to your business.
As more and more big groups shop for stores to add to their portfolios, they need strong teams in place to continue the success of the store after you leave. (They’re also more likely to keep your people in place if you can show you’ve invested in their development over time.)
3. Create an exit plan.
Do you think your children might want the store? If that is your exit plan, don’t assume -- ASK. If you find out they aren’t interested or, in your honest assessment, they are not capable, you’ll still have time to make a new plan. If they are interested, you can make a transition plan that includes the training and experience they’ll need for a successful handover.
If family succession isn’t part of your plan, think through your priorities for the future. Do you need a certain dollar amount from a sale in order to reach your retirement goals? Would you rather transition out slowly, and keep part ownership as an advisor to the new owner for a few years, or just sell outright and retire?
Preparation is the key to getting the most value out of your store when it’s time to sell. NBB has been here for auto dealership owners for more than 40 years, and we plan to be here for decades to come.Whether you’re in the middle of building your legacy now, or getting ready to transition into the next season of your life, give us a call. We want to help you get the most out of your career by helping you finish as strong as possible.
To talk more about these 3 Tips, please contact us to set up a consultation appointment.
P.S. If you do have to sell quickly, please call us. We can help you make some quick-and-clean adjustments that will add immediate value and make your dealership more attractive to a buyer.