Sell Your Automotive Business in Australia
Selling an automotive business is not dissimilar to selling any business. Automotive businesses are often run by the owner plus they have some staff including qualified mechanics and or apprentice staff.
There are a vast range of business types you can sell in the Automotive Industry.
Read on for more on how to sell your business for the best price possible, and move on to your next opportunity in life as quickly and easily as you can.
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Selling Your Automotive Business Online Just Like a Broker
There are a vast range of business types you can sell in the Automotive Industry
- – Auto Mechanic Business
- – Heating, Air Conditioning, and Refrigeration Mechanic Business
- – Heavy Vehicle Mechanic Business
- – Diesel Mechanic Business
- – Aircraft Mechanic Business
- – Electrical Mechanic
- – Panel Beating Business
- – Automotive Accessories/Parts
- – Aeronautical Business
- – Bikes and Motorcycles
- – Car Dealerships
- – Car Rental Business
- – Car Wash Business
- – Detailing Business
- – Driving Schools
- – Marine Business
- – Service Station
- – Welding
- – Truck business
- – Wreckers Business
A good business should ALWAYS BE FOR SALE especially for the right price! It is often best to sell when your business is ‘on the up’, or prior to your busy season. When selling for a good reason, you are often in a better negotiating position to get the best price possible for your sale. But don’t be hard on yourself. If you are not ready, perhaps timing is more the issue. No matter what the reason, the decision to sell has already been made, especially in your own mind!
Why are you selling your automotive business
There are many reasons why someone wants or needs to sell their Auto Business. Perhaps its just the right time, or perhaps you have lost your best staff member, or perhaps your personal circumstances have changed. Alternatively, you’ve had the best year of business ever! No matter what the reason, you probably already know why! Don’t make the mistake of putting it off so far ahead that it doesn’t get done. The most common mistake of business owners not achieving the right price for their business is because they left it too long before putting the business onto the market. It is not healthy to keep the business longer than you wanted because more often than not you will get tired and lose interest in the business and possibly have less profits and more stress!
Know the benefits of your automotive business
When preparing to sell your Automotive business, it is important to know the benefits of your business. Years of trading – (this can include your time and any previous owners demonstrating longevity of your business). The specialties of your business; like 4-wheel drive mechanical repairs or other specialist cars, insurance work, fleet work, your service, your point of difference! Talk about your staff, the achievements of the business and the typical type of customers. The benefits of the location like: ‘great exposure’, plenty of on-site parking, ‘surrounded by other related businesses’, or very reasonable rent! Talk about your competition. There is nothing wrong if there are several other automotive businesses in your area, this often attracts more customers to come to your location. If you don’t the prospective buyer will! Further potential is also worthwhile including, as it demonstrates to the buyer that there are other things they can try. This could be as simple as setting up or updating your website, add a shopping cart so that you can sell more parts and accessories on-line. It’s OK if you don’t have a website, just point this out to the new prospective buyer as further potential. Most business owners know the further potential but have never got round to executing it. But now is the time to express this to a potential buyer. Further potential is also worthwhile including, as it demonstrates to the buyer that there are other things they can try. This could be as simple as setting up or updating your website, add a shopping cart so that you can sell more parts and accessories on-line. It’s OK if you don’t have a website, just point this out to the new prospective buyer as further potential. Most business owners know the further potential but have never got round to executing it. But now is the time to express this to a potential buyer. Future growth and/or development of the area. Many automotive businesses are suburban based, even in a light industrial estate and many locations are forever-expanding. The more population in your local area, the more potential customers you have. This is a positive thing to demonstrate.
List all of your assets
This is easy to do. Just list all the items that you are going to include in the sale of your business, right down to how many vehicle lifts, Presses, transmission jacks, compressors, lathes and hoists etc you have. Assets also can be ‘soft assets’ like your computerised database of clients, your cash register software or point of sale equipment. It can also be your website, domain name, your social media platforms. Once you start realising all of your assets, this helps towards achieving a better sale price for your business. Often you will already have an ‘assets register’ included in your financials, so that would be the first place to look. Some business also have certain equipment or software that is leased, so these should be included on your list with any financial commitment details. Tip: Check with your accountant.
Get your documentation ready
Leasing Details If you are renting the premises your business is in, then get a copy of your lease. The buyer will want to see these arrangements. Often a business has plenty of options (i.e. 5×5 years), or even if you have a month by month lease. No matter what type: put yourself in a buyer’s shoes, wouldn’t you want to know that when buying your business that a secure lease is, or can be put in place. If you are fortunate enough to own the premises, then consider whether or not you are selling the premises with the business. Alternatively, you may want to keep the premises and just sell the business and lease the premises to the new owner. Profit and Loss No matter what the financials are, a prospective new buyer will want to see them. Usually the last 2 or 3 years of trading are acceptable and depending on the time of the year you are selling, it is satisfactory to only have up to the previous financial year. If you are like most small businesses, then your financials will be up-to-date or just over 12 months old. Your financials should not be shown until you have a genuine interested buyer. The buyers are initially interested in what they see and what you are telling them, like the benefits and the future opportunities. Is it hard to sell my automotive business without a broker? No it’s not. Remember, you have owned and operated your business for a while now and you know your business inside and out. Certainly, better than any Broker would. If you have done all of the above, then you are well on your way and ready to market your automotive business for sale. Until you start advertising the sale of your business, then you won’t know who is interested. Getting the right advertising exposure to attract the buyers to sell your automotive business is very important. A broker would use major sites to list your business for sale, but you can too. The main difference is that you have control over who is looking at buying your business and when you sell, you won’t be paying any commissions whatsoever. The benefits of selling privately far out way selling those through a broker. Of course, Business Brokers may tell you differently. You have worked a long time in your business and brokers often charge very hefty commissions, like 10%. 10%!!!! of the whole business sale price. That’s 10% of your equipment, 10% of your good name and 10% out of your pocket. You may have already purchased your business previously, or even paid for a new set-up. So be well informed how much it is really costing you to sell through a broker. Example: In 2013 you purchased your business for $180,000. During the running of your business you have replaced equipment items (value $60,000). You have also increased the revenue. Today your business may be worth $360,000. So if a broker is charging 10%, then you will need to pay them $36,000 + advertising costs (lets round it to $40k). Your profit from the sale is the sale price ($360k) less your original set-up and extra expenditure ($240k) – profit is $120k. So $40,000 to your broker is 30%! YOU are the one who deserves this, not the broker. Be aware 10% does not mean 10% it is more likely 30%.
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