Quantcast
Jump to content
    • You can post now and register later. Already registered? sign in now to post with your account.
    • ×   Pasted as rich text.   Paste as plain text instead

        Only 75 emoji are allowed.

      ×   Your link has been automatically embedded.   Display as a link instead

      ×   Your previous content has been restored.   Clear editor

      ×   You cannot paste images directly. Upload or insert images from URL.


      Once you submit your question, a new topic will be created for you in our forums. Our moderators may move your topic to a more suitable forum category if one exists. Members will see your topic and be able to respond to your question.

    • This will not be shown to other users.

Recommended Posts

Hi everyone,

I had a conversation with a client yesterday who just discovered he wasn't going to be able to

sell his business, at the number he hoped for.

A little background:
We have only been working with him for 4 months. The original plan was to help him increase
his sales and profits and improve his paycheck.

Basically, he wanted to put systems in place to accomplish the following things:

  • Increase the sales from $650,000 to a million dollars per year
  • Maximize the gross profit
  • Phase himself out of the day to day business operations

He is currently one of the two service advisors and was in the process of interviewing

his replacement.

His goal for selling the business was 2019.

To make a long story short, two weeks ago, he found out that due to an unexpected
family situation, he must sell immediately.

He was shocked to find out that his business is not worth what he hoped to get out of it,
mostly due to a number of factors discussed in these articles:
http://www.shopownermag.com/know-shops-sellability-score-part-1/
http://www.shopownermag.com/know-shops-sellability-score-part-2/

The number one factor that decreased the current value of his business is described below:

To be valuable to a buyer, your business must be able to succeed and grow without you at the hub of all ­activities, and your employees must be more than mere spokes that cannot operate independently of you. And the more your customers need you and ask for you personally, the harder it is for you to scale back your hours, take a vacation or eventually sell your business.

Your business is significantly more valuable if you are successful at building a “brand,” not simply a place where your own reputation and your personal handling of customers is what brings them back. It’s the difference between thinking of yourself as having a “job” that requires you to show up at work to make money, ­versus creating a “business” where the brand is more important than the ­personality of the founder.

The majority of buyers who contact me don’t want to be a slave to the business and work every hour that the business is open. In fact, many buyers already own a business and are ­looking to supplement their income by purchasing an additional business where they will provide part-time ­supervision and marketing and business acumen. These buyers will pay a premium for a business that can clearly demonstrate its ability to run ­profitably without the seller as the critical hub.


It's interesting to see Art's current listings and see how the performance numbers

relate to the listing price for the businesses:
https://art-blumenthal.com/

What are your thoughts on the sellability score Art talks about, in his articles?

Share this post


Link to post
Share on other sites


Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Similar Topics

    • By Joe Marconi
      My Thoughts on the Coronavirus and Business
      In my 40 years in business, I have lived through many economic downturns. From the stock market crash of the late 1980’s, the housing bust of 1990’s, the tragic event of 911 and the great recession of 2008. This is different.  The fears and the realities of the coronavirus has affected us all.  And some areas of the country have been hit harder than others.  In all other situations, I fought like hell to make a difference and beat the circumstances.  Again, this is different.
      I am not an alarmist, not a defeatist and I do not get sucked into the sensationalism of the press. Just today, I heard a sports announcer on a talk radio show advise her listeners to stay at home, don’t go to work, don’t go to the movies, don’t go out of the house and isolate yourself from other people. Is this rational?  I can’t do that. 
      I am an automotive shop owner. What I do matters to my family and the community. I…WE….need to be there to ensure that the doctors, nurses, police, public officials and everyone else has their transportation ready to perform. Stay home? Us? Is that an option?
      But again…this is different.  This afternoon, I was getting ready to go to Church;  4:00pm Mass, when my wife got an alert that Church as been canceled.  Wait; let me say this again real slow…Church… has…. been…canceled.
      Fear has a way of eating at the fabric of our rational being.  I fully understand the reality of what is happening. This virus will take people’s lives. But, do we run away in the face of a threat?  Is this who we are?  What do we do? Close our businesses for a few weeks? A month or two? How many of us can afford that?  We all know the answer to that question.
      As automotive shop owners, technicians, service advisors and all the other valuable employees of this great profession, we need to take the proper precautions. Do all you can to protect yourself and your family. If you decide to continue to operate your shop during this challenging time, have a meeting with all your employees. Take the proper steps to protect yourself, your employees and your customers.
      Business may get ugly for some.  My company has taken a  40% drop in business the past three weeks, directly contributed to the coronavirus outbreak.
      I write this to tell you how I feel; not to decide for anyone what to do.  I will not force my employees to do anything they feel would put themselves or their families in harm’s way.  For me, I intend to fight. I will take care of myself, take care of my family. But there are too many people depending on what I do, and way too may years behind me to hunker down and wait this out.
      Stay safe, stay healthy. Take this situation serious. But please don’t give up. We will prevail and we will get through this together.  We are the hardest working, most resilient, toughest people on the planet.
      Let’s show the world and this virus who we are!
    • By Alex
      Has the Coronavirus (COVID-19) impacted your auto shop business? If it hasn't yet, it has the potential to do so soon. Please share what you are currently doing, how your business is impacted, what plans you have in place, etc.
      Some things to consider:
      Do you have a plan in place should you or one of your employees become ill? With school, event, and business closures, how will this affect your shop? Are you sending anything to your customers in terms of sharing your plans around keeping your customer and employees healthy and doing your part in your community? Many small and large businesses have been sending email communications to their customers. Are you marketing to your customers in terms of not delaying car repair, should there be a need to temporarily close? Are your parts suppliers sharing their plans, should the pandemic affect supply chains?  Are you stocking up on business and shop necessities? Please share your experience in this topic and stay healthy!
      In the media:
      The coronavirus and its growing tally of sick and dead victims around the world have been roiling financial markets, prompting countless hand-washing reminders and ruining more than a few vacations, and that’s before anyone knows exactly how widespread the effect will be on the automotive industry, including your local repair shop. Source
      “By mid-March, the shortage of supplies will be felt and members are projecting they’ll experience disruption through May or June,” even if operations in China soon get back to normal, said Stacey Miller, senior director of communications at the Auto Care Association, a trade group representing 150,000 auto aftermarket and service businesses. Source
       


       
    • By Elite Worldwide Inc.
      Good morning,
       
      With business slowing down for most, we feel that there's never been a better time for shops to take advantage of online training. We know that everyone in our great industry is in this together, and want to help shop owners in any and every way that we can, so have decided to team up with Jasper Engines & Transmissions to make our Online High Impact Customer Care Sales Course available to the industry at no charge. 
       
      The recordings for this 4-part online sales training course are usually sold for $179, but the below link will provide you with complimentary access. You'll see that the page also provides access to an Action Plan that you can follow to help you navigate through the coronavirus pandemic.
       
      As you take on this challenge, please don't forget that you're not alone, and that this pandemic will pass. If there's anything else that Elite may be able to do to help you, please feel free to Contact Us, or give us a call at 800-204-3548.
       
      Click Here for complimentary access to our Online High Impact Course and COVID-19 Shop Owner Action Plan
       
      Wishing you the best,
       
      Your Friends at Elite
    • By Mark Johnson
      The Accountable Plan is one of our most successful strategies and gives up to $10K in tax savings per year.

      An Accountable Plan allows employees and in your case, owner-employees to be reimbursed for business expenses paid out of pocket.
      The expenses become deductions to the business and the employee or employee-owner can be reimbursed creating non-taxable cash flow to them. 

      In order for the plan to be a “Qualified Accountable Plan” it must have the following connection points:
      ·         Business Connection
      ·         Substantiation (Expense Reports - with receipts)
      ·         No Excess Payments
      ·         Timeliness (30 - Day Rule)

      If not disbursed under an accountable plan, the payments could be considered additional wages by the IRS. For this reason, you need an accountant familiar with the accountable plan for the initial setup.

      Examples of expenses that qualify are mileage, auto, home office, travel, meals & entertainment expenses. 


      Learn more about this and other LEGAL tax saving strategies by contacting us at 1954-324-0803 or booking an appointment at https://calendly.com/markjohnsontaxplanner/45min.

       

      View full article
    • By AndersonAuto
      A bit of a clickbait title, but not inaccurate. The shop is doing amazing, and I haven't been here but a few hours here and there since last June. Prior to that I had been the shuttle driver and not much else.  I sold the shop to my manager, something that has been in the works for over 3 years. Spending the next couple days at the shop getting a few things settled (vendor accounts, recurring payments, etc) before the final handover on Saturday. I'm retired now at 55, and I won't have to work another day. My wife and I are moving onto our boat and we're going to sail around the world a few times.

      The moral of the story is that you CAN get there. You don't have to be particularly bright, I'm certainly not. You don't even have to be an amazing manager. There are thousands of shop owners who are better managers than I am.
      You do have to work hard. Way harder than the average guy, and a lot of guys work pretty hard. 
      You do have to be smart about your business. Don't spend money you don't have yet. Cash in the bank fixes a world of sins, make sure you have plenty. 
      You do have to take calculated risks. Business ownership is not for the meek. You'll have to take risks that the average guy would never dream of. Be fearless, but DO THE MATH before you jump.
      You do have to fully understand your financials. If you can't read a P&L and be able to see there's a problem that needs further investigation, you better learn how. Same with your KPI's.
      You do have to do great marketing, and lots of it. There are guys out there who claim they don't need to do any marketing and are swamped. Maybe there are, but I'm not one of them. Odds are you aren't either. Get busy marketing.
      And you do have to get good business coaching and listen to what they say. You could be stupid like me and wait 12 years before you finally get a business coach and start making money, but why would you want to do that? Get one now. If they don't pay for themselves many times over, odds are you didn't do the work to go with the advice.

      John


  • Similar Tagged Content

    • By Mark Johnson
      According to The NY Times, you should have a well-padded cushion of savings by age 50 if you want to retire comfortably.
      This is how it should look:
      By age 50, have five times your annual salary saved. ( ie. $100K income = $500K savings)
      By age 55, have six times your annual salary saved. ( ie. $100K income = $600K savings)
      By age 60, have seven times your annual salary saved. ( ie. $100K income = $700K savings)
      The Times also reports that less than 13% of Americans have a pension or a solid retirement plan.
      How does your situation looks? Are you on track to retire comfortably?
      If not, no need to panic.
      We can guide you in getting there.
      If a shop owner who is currently 50 years old starts putting away $2,700 every month until he retires at 67. He would have amassed $1,245,344 by the time he retires.
      Now you might be asking where will I get the money from to save? Well, most of the shop owners that I encounter are overpaying an average of $22,679 in taxes yearly.
      This amount alone could easily be used to fund your retirement plan.
      When we met Henry he was 62 and his shop was netting a little over $283K per year. We were able to find tax savings which allowed him to save $84K per year and in 8 years he had over $1.1M in retirement savings. 
      To learn how to use your tax savings to build your retirement portfolio message me directly or book a free consultation via my website.
       
       

    • By Mark Johnson
      He had been working with his accountant for 6 years. That’s over $134k in over-payments.
      The reality is most CPAs only do tax preparation not tax planning, there is a HUGE difference!
      I am offering free tax planning assessments to all group members.
      Where we will look at:
       Deductions review & Strategy planning Legal Entity Optimization Retirement Option & Plan to Hit Extra 1M by Retirement Insurance Review & Assets Protection TCJA (Trump Tax) Review  Message me direct or book your slot on my website.


      View full article
    • By Mark Johnson
      We allow visitors to read the first post of each topic. To read this post, please login or register for a membership. 
    • By Joe Marconi
      After 39 years in business, it's time to get serious about my exit plan. While I don't think I will ever truly retire, I do think it's time to plan the next chapter in my life.  I would  like to hear from shop owners out there in the same  situation.  What are your plans?  Are you selling your repair shop?  Do you have a succession plan?  And are you thinking about a different line of work to keep you busy?
       
  • AutoShopOwner Sponsors



×
×
  • Create New...