SELL AN AUTOMOTIVE-RELATED BUSINESS



If you are thinking about selling your automotive-related business, you likely have quite a few questions.  Given our broker’s lifelong interest in everything automotive and passion for selling businesses, we are eager to work with you and answer all of your questions.  Below are some key factors you should consider before selling your automotive-related business.


FACTORS TO CONSIDER

How are automotive-related businesses valued?

Although a broker's price opinion or certified business appraisal is the best way to determine the value of a business, there are some general rules of thumb for valuation:

Auto Body Repair

  • 25 to 35% of annual sales plus inventory.
  • 1.5 to 2.5 times Seller’s Discretionary Earnings (SDE).

Auto Brake Services

  • 30 to 35% of annual sales plus inventory.

Auto Dealers (new cars)

  • 0 to 10% of annual sales plus inventory.
  • 0 to 6 times Seller’s Discretionary Earnings (SDE) plus inventory.

Auto Dealers (used cars)

  • Wholesale book value of cars plus parts, fixtures, and equipment.  There is no goodwill included.

Auto Detailing

  • 40 to 45% of annual sales plus inventory.
  • 1 to 2 times Seller’s Discretionary Earnings (SDE).

Auto Glass Repair/Replacement

  • 45 to 50% of annual sales plus inventory.
  • 1.5 to 2 times Seller’s Discretionary Earnings (SDE).

Auto Lube/Oil Change

  • 40 to 45% of annual sales plus inventory.
  • 1.5 to 2 times Seller’s Discretionary Earnings (SDE).

Auto Parts and Accessories

  • 40% of annual sales plus inventory.

Auto Rental

  • 45% of annual sales plus inventory.
  • Number of cars times $1,000.

Auto Repair (auto service centers)

  • 35 to 40% of annual sales plus inventory.
  • 1 to 2 times Seller’s Discretionary Earnings (SDE of $75,000 to $100,000).
  • 2 to 3 times Seller’s Discretionary Earnings (SDE of $10,000 or more).

Auto Tire Stores

  • 50% of annual gross sales.
  • 2 to 3 times Seller’s Discretionary Earnings (SDE).

Business Brokers of Florida 2017 to 2019 sold history for automotive-related businesses
Businesses Sold
Average Sales
Average Sold Price
Average SDE
Revenue Multiple (Sold Price/Sales)
SDE Multiple (Sold Price/SDE)
SDE/Revenue
Rent/Sales
Sold Down/Sold Price
Days on Market
149
$849,364
$378,608
$154,509
0.446
2.450
0.182
0.092
0.825
295

Tips for getting the best possible price

CLEAN UP YOUR BOOKS!

Buyers want an accurate financial picture of what they are buying.  It is quite easy to run personal expenses through an automotive-related business.  You and your family’s personal vehicles, gas, insurance, and maintenance are obvious expenses that are often run through a business.  Cash sales are also common.  Do your best to record every dollar your business takes in and limit running non-business expenses through your business at least one year prior to putting your business up for sale (three years is optimal).

CLEAN UP YOUR SHOP!

Automotive-related businesses are typically messy and difficult to keep clean.  A clean shop shows a buyer your business is well-managed and your employees have pride.  Make sure your rags make it into the barrel and not on the floor, the stack of old worn tires in the back of the shop are removed, and your employees look professional and clean-cut.  We have seen plenty of buyers walk out of a shop because their impression was that the owner and employees did not run a disciplined shop.

GET OFF THE SHOP FLOOR!

Most potential buyers love automobiles and likely spent a lot of their lives tinkering with them; however, their impression of ownership is one of leadership and not a technician or salesperson.  If a potential buyer sees the business depends on you, they will pay less than if you have a competent team in place.  The larger the business, the less involved you are expected to be.

KNOW YOUR BUSINESS VALUE!

Our valuation methodologies have proven over the years to be very accurate in predicting the final sales price of a business.  Our intent is to help you sell.  If the value we provide is not the amount you need to exit your business, we will discuss the revenue and SDE numbers you will need to achieve to obtain that amount.  And, if desired, we can assist you with more detailed growth and exit plans for a fee.

HIRE EXPERTS!

You only have one opportunity to sell your business.  You will want to hire the most qualified team or individual to assist you.  Edison Business Advisors are experts at selling automotive-related business.  Our experienced staff has sold businesses in the Midwest, Northeast, and Southern states, and we will sell automotive-related businesses nationwide.  If you own an automotive-related business with annual revenues between $250K and $25M, we would love for you to join our list of satisfied sellers. We do not charge upfront fees.  We are not paid until the job is done, just like you run your business!


HOW WE CAN HELP

We have sold many types of automotive-related businesses

An example of some of the automotive-related transactions we have participated in ranging from $100K to $9M include:

  • 40-bay repair and maintenance shop
  • 5 location quick-lube chain
  • Auto body shops
  • Tire shops
  • General repair shops
  • Muffler shops
  • Auto air conditioner repair shop
  • Used car dealers
  • Parts distribution
  • Upholstery shop
  • Window tinting shop
  • Truck accessories

We have worked in the automotive industry

Edison Business Advisors has over 25 years of experience in the automotive industry including automotive M&A and quick lube ownership.


We have active, qualified buyers and proven marketing programs

We have a database of thousands of active, qualified buyers many of who are looking for a business just like yours.   We aim to maximize the exposure of our ads to the right audience.  We engage in both passive and active marketing programs:
  • Appropriate website ads are placed based on the size of company and industry; e.g., BizBuySell, BizQuest, BusinessForSale.com, and BusinessBroker.net for smaller deals; and DealStream, Axial, Divestopedia, DealGate, DealNexus, and Aurign (formerly BankerBay) for larger deals.  
  • Ads are re-entered monthly on platforms such as BizBuySell and BizQuest to move ads back to the top of the industry and geographical searches.
  • Frequent social media ads are placed on LinkedIn, Twitter, and Facebook.
  • We send weekly emails to thousands of qualified buyers of the new and updated businesses for sale.
  • We execute targeted marketing campaigns as agreed upon with the seller, e.g., direct mail, email, and/or telephone solicitation based on targeting of like-kind or adjacent business owners by geography, prospect size, etc..


Contact us for a complimentary, confidential consultation and business evaluation

Please contact our automotive expert Eric Gall at 239.738.6227 or [email protected] for a complimentary, confidential consultation and business evaluation. Below is information on Eric's automotive experience, awards, and credentials.


About Eric J. Gall, MBA, CM&AP, CBI, ABI

Eric J. Gall is the registered broker and founder of Edison Business Advisors.  Over the past 20 years, he has participated in many forms of business transactions totaling over $175M. 


RESULTS

Eric won the 2018, 2016, and 2014 Business Brokers of Florida (BBF) "#1 Top Dollar Producer Award" for Southwest Florida beating out 91 other BBF brokers.  His 2018 and 2016 transaction volume ranked in the top 10 in the State of Florida out of 1,115 BBF brokers.  He is the only broker in the top 10 not located in the larger Tampa, Orlando, or Miami/Fort Lauderdale markets. He also won the IBBA 2019 and 2018 Chairman's Circle and Deal Maker Awards. He has been a BBF Million Dollar Seller in 2010 and 2012 through 2019.

Eric Awards    


CREDENTIALS

Eric is highly credentialed having obtained his Certified Business Intermediary (CBI) from the International Business Brokers Association (IBBA), his Certified Mergers & Acquisitions Professional (CM&AP) from M&A Source, and his Accredited Business Intermediary (ABI) from the American Business Brokers Association (ABBA).  He was the second broker to obtain a CBI and is the only CM&AP in Southwest Florida.

The CBI requires meeting stringent education and performance requirements as well as the high ethical standards of the IBBA.  The CM&AP requires achieving in-depth knowledge of the specialized approach required to successfully prepare and execute lower-middle-market transactions (above $1M in EBITDA).  The ABI requires meeting a specified number of years in the business and completed transactions.  Eric holds BSE and MBA degrees from the University of Michigan. 

  Eric Cert            

EXPERIENCE

Prior to founding Edison Business Advisors, Eric bought, sold, and operated a chain of quick lube shops in Southwest Florida.  He also worked in corporate M&A at Ford Motor Company where he:

  • Led the post-merger integration efforts for Ford, Jaguar, Land Rover, Volvo, and Mazda
  • Oversaw the disposition of small automotive technology-based assets acquired by Ford prior to the internet bubble
  • Managed global quality programs for Ford’s Parts & Service Division
  • Was recognized as a corporate expert in multi-cultural negotiations

He is an active member of BBF, IBBA, and M&A Source.  He is the ABBA's Best Practices Forum Leader and Vice President of the BBF's Tampa Region.

By investing time and money in education, certifications, and best practices, Eric has achieved a tremendous return for Edison Business Advisors' clients who have successfully transacted businesses at a much higher rate than the industry average.

Eric Associations