“I’ve been working with dealers for decades in a variety of positions in the industry, and the most meaningful work I’ve done is helping dealers transition to retirement at the end of their careers.
Selling your business is never easy. It may be a rewarding experience – personally and financially – but it’s complicated on every level. It changes your life, that’s for sure.
I have found that if dealers will take the time to look ahead and get clear on a few key issues, they will find the closure they’re looking for and finish strong, walking away with full value for what they built.
I hope the following tips are helpful for you.”
- Jeff Rochwarger, SVP Southeast Region, National Business Brokers
1. Know the Reasons for a Sale
Be rigorously honest with yourself about your reasons for selling. Lying to yourself will only delay knowing the truth, and that can lead to seller’s remorse.
Maybe you're selling because you don't have a family member or employee who wants to buy the dealership. Perhaps you want to retire, or you need to liquify the business for health reasons. Sometimes a partnership or a marriage is breaking apart and requires a sale. There are a thousand potential reasons to sell, but being clear on what your reason is will give you strong direction and will smooth the road ahead.
2. Expect Emotions
Be ready for yourself, and others around you, to experience a range of emotions during and after the sale. The sale of a dealership touches a lot of lives. It’s a very emotional time for dealers, spouses, children, and employees.
Family members who have become accustomed to certain perks tied to your ownership will need to adjust to their new reality. They may have a lot of questions for you, and it might feel insensitive at times.
You poured your heart and soul into building your business, so selling it can feel a lot like mourning a death in the family. Or like the joy at the birth of a baby. Or both on different days!
You may feel ready to leave the 24/7 grind behind, and yet the absence of all that “noise” can be disorienting for a little while.
Be prepared for a bit of a roller coaster, but know that it is perfectly normal.
3. Is There Life Out There?
Owning a dealership can provide an identity in the community and be a source of self-esteem. I like to tell my dealer friends to picture their lives after the sale, and to do that before putting their business on the market. See what it feels like.
It’s a good idea to make a list of things you hope to do after the sale so you’re ready to get started on your new life. Plan a trip that includes one of your hobbies. Put a big family event on the calendar.
Don’t wait until after the sale to figure out what life will look like when you don’t have to be anywhere and the phone stops ringing. Make a plan you can get excited about.
4. No Surprises
Consider all the material aspects the sale will bring forth before listing your dealership.
It’s imperative to have a full picture of all the pluses and minuses of a sale in advance. Knowing the appraised value of your real estate, performing environmental studies, conducting a parts inventory, estimating used vehicle valuations and after-tax net proceeds before a sale helps you avoid surprises – and delays – later.
Too often sellers lose out on a sale, or encounter hidden expenses, because their property value is less than expected. Or an inspection reveals an environmental problem that causes delays and substantial outlays. Or parts are substantially over-valued due to obsolescence, poor controls, etc. Identifying these things before listing the business prevents surprises once the business is under contract.
Once the sales process begins, surprises can limit your choices and even block a sale. Working with a veteran broker can help you be prepared for all the ins and outs of a transaction.
5. Do Unto Others
Consider what you’d want to know about a sale if you were in your employees’ shoes. Look out for those who helped make the business attractive to a buyer.
Gather information about the buyer’s plans for each department and/or employee before informing employees of the sale. This helps you address employee concerns and build a bridge between them and the buyer prior to and after closing.
Also, make sure the buyer knows everything they need to know about your business. Share how specific pay plans, and how your departments are structured. Talk about what each employee does and what motivates them.
Buyers must understand how the business functions through its employees early in the sales process. Carefully explain to the buyer the value your employees bring to the dealership daily.
Buyers and sellers must be partners to help employees through the sale. Employees fear losing their jobs and cuts in pay. It’s best if the current owner and prospective buyer can meet with employees together—at the appropriate time—to share future plans, pay scales, and the desire to keep employees on.
Sleep Happily Ever After
Once you close on the sale of the dealership, you can drive away knowing you did the best you could for yourself, your family, your employees, and the buyer. Be proud of your legacy and feel good about the sale. There’s tremendous satisfaction in knowing your legacy will live on because you did all you could for yourself, your family, your employees, and the new owner.
Jeff Rochwarger is a Senior Vice President at National Business Brokers. In 2004, he joined NBB to help re-open the Southeast Region, and the company has seen rapid sales and revenue growth ever since. You can reach him at firstname.lastname@example.org, or 407-754-6202.
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