Auto Shops

An employee managing the inventory of exhaust mufflers, an important part of an auto repair shop's assets.
When selling your auto repair business, a detailed FFE list and a demonstrated history of strong inventory management practices can increase its value. This includes keeping accurate records of parts like these exhaust mufflers.

Auto Shop Premise Leases and Real Estate

The business premise lease presents another factor affecting value if the owner doesn’t own the real estate. Landlords can be somewhat unpredictable or uncooperative when learning their tenant plans to sell the business. If there is not much time remaining on the existing lease and there are no favorable lease options to renew, that can be a problem for SBA financing as well as for any business acquirer.

To help determine what the business is worth, we will need to adjust the business’s financial profile to reflect an unfavorable lease.  Or if the property is owned, the financials will need to reflect a market rate for the lease.  

When you list with us, we’ll assess your business’s SBA financing eligibility by submitting your financials to lenders. Knowing your business can be financed will enhance your peace of mind. It will also give you more negotiating leverage with buyers. For more insight on this subject, check this blog on the importance of understanding leases.

Risk Influences How Much to Sell My Business For

Finding Affordable Parts

Do you have reliable suppliers who offer competitive pricing without compromising quality? Do you have an inventory management system that tracks usage, and avoids overstocking? 

Recruiting and Retaining Technicians

Does your company have training programs, mentorship opportunities, and support for employee certifications?  Do you offer competitive compensation and benefits?  What channels do you use to locate qualified technicians?

Adapting to Technological Change

How is your company’s adaptation to new technologies like ADAS (Advanced Driver Assistance Systems)? What is your strategy for proprietary software associated with original equipment manufacturers (OEM) and software updates in general? How have you modernized your shop? Technology is changing at warp speed. Catch up on the Latest Auto Repair Technology Trends.

Managing Increasing Vehicle Complexity

Does your shop have employees trained to manage increasing vehicle complexity? Do they have the needed tools and equipment? Do you have a formal training plan for them? Better yet, do your employees use written SOP (standard operating procedures)? Creating an SOP is good business practice.  When thinking about the question how to sell my business, it comes down to creating and managing a well run business.

Navigating Insurance Company Influence

Insurance companies are starting to exercise more control over the repair standards and parts suppliers. How has that affected your business? For more on this sub-topic: This article from Cline Collision Center provides valuable insights into the relationship between insurance companies and auto repair shops. 

Utilizing Digital Tools

Are you using any kind of software to manage your customer database? Do you have systems in place to communicate with those customers via email, text appointment reminders, and allow them to use online booking?

Cultivating a Diverse Customer Base

Do you maintain a diverse customer base? Prospective buyers avoid businesses with concentrated customer dependence. Delegate customer relations if you personally handle all customer interactions. This demonstrates that the business can thrive without your direct involvement. While close relationships with customers feel rewarding, these relationships don’t transfer in a sale.

If you plan to sell, train an employee to manage customer relations now. Expect a learning curve, and provide support as they develop these skills. Forcing the new owner to build these relationships from scratch consumes valuable time and energy. Addressing this increases your business’s appeal to potential buyers.

Diversifying Supplier Relationships

Who are your suppliers? Are you overly dependent on a few? If they could not continue to serve you, what would happen to your business?  All these questions will influence how much you can sell your business for.

If you are thinking about how to sell my business, consider the value of a trained, productive employees.
If you are thinking about how to sell my business, consider the value of a trained, productive employees.
If you are planning to sell your auto shop I recommend two things: Download my e-book below that describes some of the non-financial aspects of your business that will influence the offer price you will receive from buyers.

How to Sell My Business Begins with Understanding Drivers of Company Value

The e-book I mentioned is 35 pages but there are lots of pictures and charts so it is an easy read. It will help you understand how a buyer will look at the value of your business. This insight will make you a better negotiator.