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Prepare Your Business for Sale [THA 315]

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carmcapriotto Grand Master

carmcapriotto

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Did you know 80% of small businesses do not survive the departure of the current owner? When is the right time to prepare your business for sale? The day you opened your business! How do you maximize your selling price? Is there a simple way to quickly valuate your business? Hear from 3 business coaches on the importance of properly planning your business for sale.

Bob Ward, President of Wardden LLC, Look for Bob’s Previous Episode HERE. Perpetual Business Co website HERE. Rick White, President and Lead Coach for 180BIZ, Listen to Rick’s previous episodes HERE. Chris Cotton, AutoFix Auto Shop Coaching, Chris Cotton Weekly Blitz Podcast

Show Notes:

  • Understand your business Profitability
  • Selling your business properly takes planning- don’t have a reaction selling plan. Never make a decision in a ‘valley,’ aka emotional.
  • You can’t sell sweat equity.
  • Your business is for sale every day- every decision affects your business.
  • Your goal as an owner is to work your way out of the company, not get stuck in the job.
  • What is your identity? What is your identity post ownership?
  • To maximize your selling price, you need two things: Sustained profit (typically an 8 to 10 year runway) and a business that will operate without you.
  • Staff is aware and supportive of the owner's succession desires and planning- everyone should be involved respectfully. Your team wants certainty. Create a haven where they can feel safe, do their job, be challenged, be a part of something, and have fun. Do you have the right people and team in place?
  • What is the market for selling your business?
  • 80% of small businesses do not survive the departure of the current owner.
  • Hiring is like fishing- know what fish, what bait will attract the fish, and where is that fish. Consider ‘ownership potential’ when hiring quality staff. Show a future no one else does.
  • What does training do? Improve skills and communication. The more we communicate, the less friction there is in the business.
  • Valuate your business- the stuff inside your building, cash flow, multiple average 2.5. Take your assets, 25 cents on the dollar plus inventory as part 1, then your cash flow multiplied by 2.5 to get a ballpark number.
  • 6 Metric Multiple- how independent is the business from the owner? Customer facing employees tenure, production staff tenure, stability, revenue trends, gross margin trends and SOP for business.
  • Multiplier- confidence factor. How confident will the new owner feel when the old owner is out?
  • Financial records are pure, accurate, and updated- get your balance sheet right, and don’t hide cash from the business.


Thanks to our Partners Shop-Ware and Delphi Technologies Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. DelphiAftermarket.com

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Toolbox is Last to Leave, First is the Heart
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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.

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