Best 5 Steps to Selling Your Car Dealership
Do you own a small business? Are you looking to sell your car dealership? Are you unsure of the value that your auto dealership has?
If so, then this blog post is for you. In today’s automotive industry, there is a lot of competition. This means that selling your auto dealership and finding potential buyers will be easier! Join us as we teach you how to find buyers and get top dollar for your company.
Is it Time to Sell Your Car Dealership?
You’ll need to consider several different factors when deciding whether or not it’s time to sell your auto dealership. Here are some questions you should ask yourself before selling your business.
- How is the auto industry doing?
- Is your business generating sales?
- How are car dealerships doing in your area?
- Has your business made a name for itself?
All of these questions tie directly into how long you think the auto market will have high sales in your area specifically. If you anticipate a significant downturn in auto sales in the near future, then selling your car dealership now may be a good idea. But if a downturn isn’t coming anytime soon, then waiting until it does might be wise.
Another factor that can indicate that now is an excellent time to sell is changes in the auto industry itself. For example, auto technology is changing rapidly, and some auto companies are starting to offer new technologies that might threaten your business. If there’s a chance that these changes could affect the way you do business soon, then selling now would be wise. Take into account what you expect from potential buyers. Some people will pay more for an auto dealership if they think it has increased value or growth potential than if they paid just because of its current market worth.
How to Prepare to Sell an Auto Dealership
Selling an auto dealership can be challenging. It is best to take these steps before selling your car dealership business:
- Gain more information on what it takes to sell a business, including how much money you need to prepare your business for the market. Take time to consider working with real estate agents, lawyers, or business brokers to help sell your car dealership.
- Find out about the average sale prices of auto dealerships similar in size/type of inventory like yours by asking other auto dealers or looking at recent listings online.
- If you are not already using them, consider getting professional marketing materials that show off everything people need to know about your auto dealership for sale (you may even want some videos). These help buyers visualize themselves owning this investment.
- A Seller’s Representative Agreement should be drafted so that the seller has protection in place if a buyer wants legal advice on structuring their auto dealer sale transaction or representation for the closing of said auto dealership sale. This is critical, especially when dealing with people that may potentially have liabilities associated with them (liabilities can change depending upon the state you do business in).
- Consider hiring an attorney specializing in small businesses to review all documents involved, including Buyer Due Diligence Questionnaires required by many states before purchase agreements can be entered into. It never hurts to get another set of eyes reviewing these types of critical financial transactions because they will be more objective.
Assets Versus Stock Sale
There are two main ways auto dealership owners sell their business, assets versus stock sale. The type of deal you make can significantly affect how much money you walk away with at the end of the day. As it is always wise to do your homework before entering into any agreement, dealerships should carefully weigh both options and decide which one is best for them.
The key difference between these sale types lies in how the buyer makes its payment after agreeing on all terms presented by the seller. For example, in most cases where a stock sale is the method of choice, a buyer will pay in shares. This can be advantageous to you and your new business partner because it does not require immediate cash flow from the auto dealership after closing on the deal.
Suppose you’re in the automobile dealer industry and looking to get out. In that case, Sunbelt Business Brokers of Florida is here to provide the resources and expertise that auto dealers need when it comes time to sell your car dealership business. We have years of experience working with auto dealerships across Florida, which means we know what needs to be done in order to prepare your auto dealership for sale at a fair price. Contact us today if you want more information on our services or help to sell your automotive business!