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What the hell did I just do?


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Would rather not divulge numbers because the buyer might not approve. Let me just say this. I was told about 8 years ago by another tire dealer that your business customer base and equipment is not near what you think it's worth. The real payday is when you own the real estate and can lease it to the new owner. As I've mentioned in other posts, my business hasn't been the same since the recession hit and 5 car dealerships opened up within a 1/2 mile of my store. Our sales dropped down about 15% from our highs, and net is much worse. Additionally, when my first employee from 1979 quit 2 years ago I elected not to rehire another tech. Frankly, I started coasting. I was tired and just wanted out. The one ace in the hole was an 11 year old building worth about 1.2M that I own free and clear. I ended up getting about 3 times cash flow plus my inventory which was considerable with 1700+ tires. The payday is the 5 year lease with two 5 year options. As for my plans, I've worked a deal out with the new owner to work at least 16 hours a week for the next year. After that...who knows. Hopefully some grand adventures.

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  • 2 weeks later...

3 week update:

Lots of changes in the shop. These guys are all about getting rid of clutter, old equipment and downsizing inventory.

I'm still working everyday and lovin' it. My attitude is so much better without all those managerial things rattling around in my head.

I am kicking myself in the ass a bit though. As I've said before I was coasting. When very first tech quit 2 1/2 years ago during a slow period I elected not to replace him. Raised my rates and carried on with the remaining 2 techs. These guys instantly brought another tech in to help the other 2. Instant extra 25 - 30 hours a week billed while still maintaining the higher rates.

Even with the extra wages I don't want to think how much that would amount to in profit $$s at the end of the year. Okay I lied. I did the numbers and it makes me sick.

But....life is good.

Edited by tyrguy
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  • 4 weeks later...

You've made Old and Tired start to think more seriously about this retirement stuff. I own my building and want to sell the business then rent the building. Who knows of a good book or formula to help me start getting ready to play the numbers game? 

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This is the broker I used. He writes for some of the trade journals and that's how I found him. He has a "Sellability Score Test" on his website that you can punch you numbers in and it will give you some ideas about what your business is worth.

He'll then consult with you a bit before it's time to get serious.

Great guy.  https://art-blumenthal.com/Home.php

 

 

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  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
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