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Prepare Your Business for Sale [THA 315]


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Did you know 80% of small businesses do not survive the departure of the current owner? When is the right time to prepare your business for sale? The day you opened your business! How do you maximize your selling price? Is there a simple way to quickly valuate your business? Hear from 3 business coaches on the importance of properly planning your business for sale.

Bob Ward, President of Wardden LLC, Look for Bob’s Previous Episode HERE. Perpetual Business Co website HERE. Rick White, President and Lead Coach for 180BIZ, Listen to Rick’s previous episodes HERE. Chris Cotton, AutoFix Auto Shop CoachingChris Cotton Weekly Blitz Podcast

Show Notes:

  • Understand your business Profitability
  • Selling your business properly takes planning- don’t have a reaction selling plan. Never make a decision in a ‘valley,’ aka emotional.
  • You can’t sell sweat equity.
  • Your business is for sale every day- every decision affects your business.
  • Your goal as an owner is to work your way out of the company, not get stuck in the job.
  • What is your identity? What is your identity post ownership?
  • To maximize your selling price, you need two things: Sustained profit (typically an 8 to 10 year runway) and a business that will operate without you.
  • Staff is aware and supportive of the owner's succession desires and planning- everyone should be involved respectfully. Your team wants certainty. Create a haven where they can feel safe, do their job, be challenged, be a part of something, and have fun. Do you have the right people and team in place?
  • What is the market for selling your business?
  • 80% of small businesses do not survive the departure of the current owner.
  • Hiring is like fishing- know what fish, what bait will attract the fish, and where is that fish. Consider ‘ownership potential’ when hiring quality staff. Show a future no one else does.
  • What does training do? Improve skills and communication. The more we communicate, the less friction there is in the business.
  • Valuate your business- the stuff inside your building, cash flow, multiple average 2.5. Take your assets, 25 cents on the dollar plus inventory as part 1, then your cash flow multiplied by 2.5 to get a ballpark number.
  • 6 Metric Multiple- how independent is the business from the owner? Customer facing employees tenure, production staff tenure, stability, revenue trends, gross margin trends and SOP for business.
  • Multiplier- confidence factor. How confident will the new owner feel when the old owner is out?
  • Financial records are pure, accurate, and updated- get your balance sheet right, and don’t hide cash from the business.


Thanks to our Partners Shop-Ware and Delphi Technologies Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. DelphiAftermarket.com

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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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