Selling a business is a pivotal and life-changing event. A business may represent the majority of a family’s net worth, and a sale is the last chance for that business to generate income for the family. Although the process is not difficult, it is highly complex.
Add to that, the psychological and emotional aspect of selling a family business, the concern if employees and customers will be treated with the same care and respect, and the unfamiliarity with the buy-sell process. It is imperative that a sale be handled with care and diligence by experienced professionals.
Performance Brokerage Services is the highest volume dealership brokerage firm in North America, having consummated 84 dealership sales in 2023. Our 10 steps below are a high-elevation outline of the buy-sell process for a traditional asset sale. It is intended to help dealers maximize the value of their business, accomplish your goals and minimize pitfalls.
As a first step, take a step back. Before any action is taken, identify and assess your personal and business goals. What would an ideal sale look like for you, your family, team, community, manufacturers, and suppliers? This is critical in determining to what extent the offer and specific buyer will accomplish your goals.
We always advise our clients to surround themselves with a team of their trusted advisors. This helps ensure that your best interests are protected, while you continue to focus on the day-to-day operations and maximizing the dealership’s performance. Your team should include your attorney, accountant, financial planner and dealership broker. Each professional has a particular role in the process, and it is imperative that members of your team have experience in dealership transactions.
Provide the buyer with sufficient information to properly evaluate the opportunity, build a proforma or projection of earnings, and submit to you an offer that is well-informed of the relevant facts. A typical request includes information regarding financial data, assets and inventories (including lease fleet details), real estate, manufacturers and vehicle sales, contracts to be assumed, and your organization. By demonstrating you are organized, prepared and willing to share information, you will increase the buyer’s confidence that engaging with you will be a smooth transaction. Remember, active and seasoned buyers are regularly evaluating acquisition opportunities, and often more than one at any given time.
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