This is Part II of our two-part discussion with KEA Advisors and CliftonLarsonAllen on dealer succession planning. For Part I, CLICK HERE.
How should a successor be trained to take over a business?
KE: “In addition to business and financial training, I also think it helps when [a successor] spends some time watching a dealer and seeing what he/she does every day. I think that’s something we see a lot with dealers who have been really successful with their businesses and want to ensure the business is in good hands when they turn it over. They want to make sure their [successor] knows that ‘this is what I do all day’ training. It kind of rounds out the candidate.”
SS: “There’s definitely a benefit to having a successor see how the dealer has led the business, and watch how he interacts with his managers and employees on a daily basis. But I also think, especially during a succession to a younger generation or a third party, that you want to encourage some innovation, too.
“You want the successor to be willing to change the environment around them … just because they see how the dealer led the business doesn’t mean they have to do things exactly the same.”
How does a successor build relationships with his new management team?
SG: “As the next generation slowly steps into the shoes of the dealer he should be acquainted with the dealer’s internal and external network — so managers, but also the dealer’s attorney, his accountant, his outside marketing firm if he has one. The successor should be building all of those relationships at the same time.
