Selling shop after 30 years

[pbrennan]

I haven’t sold a shop, but I’ve been involved in lots of acquisitions & sales in the home service industry, which has a lot of parallels to the automotive industry.

I think a good broker is absolutely worth the money. However, those are few & far between. Most brokers I’ve dealt with don’t really represent much value for either side.

Here are some things to look for in a good broker:

– Has industry experience.

– Has industry contacts (buyers – bigger companies or the like).

– Isn’t just a “marketer” that will list your business on a bunch of websites.

– Understands finance & accounting thoroughly, and how they affect the value of your business.

– Understand how to “prep” your business for sale to get the highest price.

– Understand pitfalls of negotiations, and why negotiations fall apart & what to do if they stall.

– Can perform a valuation of your business as it is today.

The only way to tell is thorough questioning & reference checking.

Otherwise, consider this: I’ve has success attracting buyers on my own by just advertising the business for sale on business selling sites. If you’re OK negotiating your own contract & terms, it might be well worth it to try that first. If you’re not OK with contract terms, financial details, and prepping your business / books for sale, it’d probably be worth the time to find a good broker.

Feel free to contact me directly if you want the name of someone I know that can do valuations & help answer some questions for you. patrick@review.camp

[the1tom]

I have started a shop from scratch, bought an existing shop, and sold and established shop.  I also consulted with a family member who sold an established business using a national broker.  Two of the above transactions involved real estate and two did not.  All these deals had pros and cons, but they gave me good insight on the different perspectives.  They also gave me good insight on valuations and how to set expectations. 

[jaschmidt]

We are approaching this scenario ourselves. Ours is a 2nd generation business with loyal customers but in an isolated area of town. We know a good knowledgeable new owner can be a success here, but don’t know how to locate that person. We had hopes of an employee buying in and taking over, but he left last year when the talks started getting serious. We have another tech who we would love to have takeover, but he is young and just starting a family, soon buying a house, so not able to come up with a down payment or get business financing. Everyone advises to stay clear of land contract deals. Our own daughters have other futures and spouses without the skill to manage a shop. So, what do we do? The broker business is scary. We don’t want to advertise that our business will be for sale in the next 5 years, don’t want to scare the customer base.

Ideas from those of you who have made this transition successfully would be appreciated.

[Tom]

One option would be to find the closest 2 or 3 shop owners who own multiple shops. (Closest could mean a state or two away.) The shop owner who is successful owning several shops is often looking for more. If you show good numbers and are reasonable with your price and terms, odds are someone would do the deal.

[jstellema]

We have recently sold our two repair facilities in Grand Rapids, MI.  I made several efforts on my own over the past three years with only those who had no financial backing, tire kickers, competitors in disguise, and those looking for a give away.  I finally enlisted the services of RUA Associates of Zeeland, MI.  We did all the leg work of having the business evaluated by their staff and did the enormous amount of Q & A to build a profile they could market with confidence.  In less than two months they had a well funded buyer.  We initiated the paperwork with the buyer in late October and we were done in two months.   Sold and now retired!

RUA made the significant difference. Their closure rate is near 80%.  

Jon Stellema

Retired

Grand Rapids, MI