Don’t List Your Dealership Before Doing These 5 Things

Don’t List Your Dealership Before Doing These 5 Things

In this post, we reveal the top five things you need to do before listing your dealership for sale. From valuing your business to preparing your financials, we cover everything you need to know to make a confident and informed decision.

 

 

1. Get Your Financial House in Order

  • Ensuring your financial statements are up to date, accurate, and complete is one of the most important things you to do. You should have a clear understanding of the financial health of the dealership including cash flow, profitability, outstanding debts, and liabilities.

 

2. Hire a Professional Automotive M&A Advisor

  • Automotive transactions are unique with their own nuances. It’s recommended to look for an advisor with experience in automotive sales and a track record of successful deals. A professional M&A advisor can help you prepare your dealership for sale, find qualified buyers, and negotiate the terms of the sale while maintaining the highest levels of confidentiality.
  • You also want to confirm the advisor is only representing one party (YOU) in the transaction and not both the seller and buyer. This poses a conflict of interest.

 

3. Conduct a Comprehensive Business Valuation

  • Prior to listing your dealership, it’s important to know its current market value by analyzing recent financial statements and normalizing the data. The goal of normalization is to identify one-time, unusual, or non-recurring items on the financial statement and adjust to provide transparency of the underlying performance of the company.
  • A professional business valuation provides an objective view on your dealership’s strengths, weaknesses, and potential sale price. Accuracy coupled with the latest market insights and trends ensures a maximum return on your investment.
  • A proper valuation of your business also helps reduce emotions during the decision process, allowing you to see the value of your asset in an objective manner.

 

4. Make Necessary Improvements

  • Now is the time to make any necessary repairs, upgrades, or restorations to your facility. This can help increase your dealership’s value and make it more attractive to potential buyers.
  • Like selling a home, painting, decluttering, deep cleaning, and staging may be required to showcase its best features boosting its appeal.
  • Pay special attention to special tools rooms, parts departments, storage areas, and any other non-customer facing areas of the dealership that tend to collect clutter.

 

5. Create a Comprehensive Sales Prospectus

  • A comprehensive sales prospectus should include all relevant financial statements, structure of the sale, organizational structure, land and building specifics, key performance indicators, normalization analysis, and other relevant information. It should also highlight strengths and unique selling points of your dealership while providing potential buyers with a clear understanding of what they are buying.
  • Your Automotive M&A Advisor will collaborate with you and prepare your business to be sold by producing an industry leading prospectus and develop unique marketing strategies to generate interest from real buyers.

 

 

Overall, preparing your dealership for sale takes time and effort, but by following these steps, you can increase your chances of a successful and profitable sale

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