Preparing your dealership for a sale: Step 3

The road to financial freedom continues with an analysis of your people, and their importance to the value and potential of your company.

Updated Jul 8, 2025
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When preparing a dealership for sale or transition, one of the most critical factors influencing success is the people who run the business. 

A well-trained, experienced team can enhance the dealership's value and ensure a smooth transition for the new owner. On the other hand, a mass exodus of key employees could severely impact operations and reduce buyer confidence. 

Understanding how your team fits into the transition process will help you prepare for a sale with minimal disruption and maximize your dealership's appeal to potential buyers.

[RELATED: Preparing your dealership for a sale: Step 1]

Identifying key employees

Before planning a transition, it's essential to take inventory of the key employees who contribute to your dealership's daily operations. Consider:

  • Who are the essential players?
    • General managers, department heads, and top-performing salespeople.
    • Fixed operations staff (service and parts managers) who maintain customer retention.
    • Finance or other managers who drive profitability.
  • Will they remain after a sale?
    • Are they close to retirement?
    • Would a change in ownership prompt them to leave?
    • Are they satisfied with their compensation and career trajectory?
  • Are there any special employment agreements?
    • Long-term contracts or unique compensation structures that a buyer should be aware of.
    • Bonuses or benefits that may need to be restructured post-sale.

Employee retention strategy during transition

Potential buyers prefer a dealership with a stable, experienced team that will stay in place post-sale. High turnover or uncertainty about key employees can raise red flags. 

Here's how to improve employee retention and ease the transition:

  • Communicate clearly and strategically
    • If employees sense instability, they may look for opportunities elsewhere. While you don't have to disclose an impending sale too early, reassuring them about job security is crucial.
    • Provide transparency when appropriate, especially with key management.
  • Offer incentives for staying
    • Retention bonuses for key employees who stay through the transition period.
    • Performance-based compensation to encourage long-term commitment.
  • Develop career growth opportunities
    • If employees see a future within the dealership, they are more likely to stay.
    • Work with the potential buyer to understand their staffing plans and career growth potential.
  • Build a strong culture
    • A positive work environment reduces employee turnover.
    • Encourage open communication and engagement to foster team loyalty.

[RELATED: Preparing your dealership for a sale: Step 2]

Compensation review: Are employees at market rate?

As part of the transition preparation, you should evaluate whether your employees' salaries and benefits align with industry standards.

  • Underpaid employees:
    • May seek new opportunities if a new owner does not immediately adjust pay.
    • This could lead to turnover post-sale, causing operational disruptions.
  • Overpaid employees:
    • If salaries exceed fair market value, a new owner may cut costs, leading to dissatisfaction and attrition.
    • This could negatively impact the dealership's financials and reduce buyer interest.
    • Conducting a compensation analysis ensures competitive pay rates and prevents surprises during negotiations.

What happens if key employees leave?

Not all employees will stay through a sale, especially those nearing retirement or those who are closely tied to current ownership. Plan for potential departures by:

  • Identifying successors
    • Can mid-level employees step into leadership roles?
    • Do you need to hire externally to fill gaps before a sale?
  • Cross-training employees
    • Reduce reliance on a single individual by ensuring knowledge transfer across roles.
    • Document key processes so new employees or a new owner can seamlessly take over.
  • Building a transition support system
    • Encourage outgoing employees to mentor successors.
    • Implement an interim leadership structure if necessary.

How buyers perceive employee stability

A dealership's staff can be one of its most valuable assets — or its biggest liability. When evaluating a purchase, buyers look for:

  • Low turnover rates: A stable workforce indicates a well-run business with satisfied employees.
  • Strong management team: A dealership with an effective leadership team requires less hands-on involvement from ownership.
  • Operational independence: Buyers want a dealership that isn't overly reliant on the current owner or a few key individuals.

To make your dealership more attractive to buyers, showcase:

  • Employee longevity and satisfaction statistics.
  • Retention strategies already in place.
  • Proactive efforts to develop future leadership within the team.

The role of non-compete and non-solicitation agreements

If you are an owner-operator or a key executive within your dealership, you should also consider how your potential departure affects the business. Some questions to address:

  • Will you agree to a non-compete clause preventing you from opening or working for a competing dealership in the area?
  • Should managers and top salespeople sign non-solicitation agreements to prevent them from taking customers or employees with them?
  • Are existing agreements in place that could influence the dealership's sale terms?

Having these agreements structured in advance can provide security to buyers and prevent disruptions.

Final considerations

A dealership's workforce is the backbone of its operations. Ensuring employee stability, retention and compensation alignment is essential to maintaining business value and ensuring a smooth transition for a new owner. 

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By addressing these areas proactively, you increase the likelihood of a successful transition, whether you plan to sell soon or simply prepare for future opportunities.

[RELATED: MacKay & Company looks into why EV marketshare is so low ... and dropping]

Key takeaways:

  • Identify key employees and assess their likelihood of staying post-sale.
  • Implement strategies to retain essential staff and communicate effectively.
  • Align employee compensation with industry benchmarks to prevent turnover.
  • Develop leadership succession plans to mitigate risks of departures.
  • Showcase employee stability to increase the dealership's appeal to buyers.
  • Consider non-compete and non-solicitation agreements to protect business interests.

By taking these steps, you safeguard the value of your dealership and create a transition plan that benefits both current employees and potential buyers. 

The success of your dealership's sale depends on the strength and stability of the team behind it.

Pat Albero is a senior partner of the Commercial Truck & Equipment Division for Performance Brokerage Services, North America's highest volume dealership brokerage firm advising on buy-sell activity for Commercial Trucks, Equipment, Automotive, RV, Marine, & Powersports.

He can be reached at 703-801-3870 or [email protected]

Dan Argiro is a senior partner of the Commercial Truck & Equipment Division for Performance Brokerage Services, North America's highest volume dealership brokerage firm advising on buy-sell activity for Commercial Trucks, Equipment, Automotive, RV, Marine, & Powersports.

He can be reached at 540-931-2221 or [email protected].

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