Are you contemplating selling your automotive business? While there’s no doubt you’re an automotive expert, are you an expert at selling businesses? At Auto Center Sales, we’ve been helping automotive business owners throughout the United States sell their companies for over 25 years. In that time, we’ve met with more than a few frustrated, do-it-yourself sellers after they’ve attempted the process on their own.
Here’s the good news: The majority of pitfalls and challenges owners experience during the selling process can be avoided with in-depth education, which our team works diligently to provide. Which mistakes can wreck your business sale? Let’s take a look.
Poor Pricing: Do You Know Your Business’s True Worth?
If you’re selling your automotive business, chances are you’d prefer doing so at top dollar, right? Unfortunately, though, many shop owners simply aren’t aware of their business’s actual value. Instead, they operate from more of an emotional perspective when determining price. While you no doubt take pride in your business, and you might believe it’s worth top dollar, the reality is this: The true (monetary) value of your business is based on quantifiable data, not an emotional valuation of its worth.
Ask yourself this: Would you purchase another seller’s business at your intended asking price, if that business had identical financial data? If that’s a no, you may want to consider reconsidering your asking price.
To price your business properly, you and your automotive business broker must conduct a full analysis of your financials. If you’re hoping to boost your asking price, you’ll need to determine where your expenses exceed industry norms, as well as brainstorm methods of increasing sales, so your business is a more attractive prospect for potential buyers.
Focusing on Minimizing Taxes Rather Than Maximizing Profits
The more cash flow you can present to prospective buyers, the higher the asking price you can command when selling your automotive business—it’s really as simple as that. Unfortunately, though, the majority of business owners—and their financial teams—focus on minimizing taxes rather than maximizing profits. This can be a huge mistake if you’re looking to sell your business for top dollar.
Here’s the good news: When you work with an experienced automotive business broker, you get the benefit of industry-specific sales experience. A knowledgeable broker will have reviewed hundreds of automotive business financial statements, as well as industry normative expenses. As a result, your broker can help you avoid financial statement recasting that might make it appear as though your business generates less cash flow than it actually does.
Selling at the Wrong Time
If you happen to get lucky, you might sell your business at just the right time. But, if you’re like most business owners, it won’t happen at the perfect moment. Selling takes time, and there’s no guarantee how long you might wait. Unfortunately, far too many business owners wait until the last minute to list—when they’re already severely burned out, their lease expiration is looming, business is slowing down, or they have a financial emergency. Don’t make that mistake!
The best time to sell your business is before you really need to sell it; not when circumstance necessitates a quick sale. If business has been slow for months or years, you might want to offload, but don’t make that mistake, either. The slower the cash flow, the lower the true value of your business will be, so finding an eager buyer could present quite the challenge. Instead, focus on ways you can boost your marketing and generate more profits before you put your business on the market.
Need help figuring out how to maximize your business so you can get top dollar for your sale? Our team at Auto-Center Sales provides industry-leading brokerage services and business education, so you can sell your business confidence and put more of your hard-earned cash back in your pocket.
Buy or Sell Your Automotive Business With Auto Center Sales
At Auto Center Sales, we’ve been facilitating automotive business sales throughout the United States for over 25 years. Our knowledgeable team is committed to delivering an unmatched buying and selling experience for our clients, and our extensive network of industry connections is one of our most invaluable assets.
When you partner with us, we take care of the heavy lifting by providing comprehensive business analysis, selling advice, and network contacts so you can sell your businesses with confidence, for a price you know you deserve. To learn more about how we can facilitate your automotive business sale or purchase, give our team a call at 800-874-5793. You can also reach out to us on our contact page with any questions or concerns.