Mergers & Acquisitions: Listen to Your Broker

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When hiring a professional to help you sell your dealership, keep in mind that there’s a reason you asked for his help in the first place.

Dealers are business people at heart. We can think of them as “Type A” personalities. They’re decision makers, and leaders. They like to take charge and they’re used to making tough decisions and telling others what to do.

These are all great qualities in a dealer principal, but not always the greatest qualities when these same business leaders need to stand down for a minute and take directions from an outsider.

Selling your store
Case in point: Selling a store. On the surface it seems like a no-brainer. All you have to do is get your books together, freshen the place up a little, put up a “For Sale” sign, and wait for the offers to come in. Anybody can do it… or so it seems.

Scratch the surface and you soon discover a world of subtleties, expectations and egos. That’s why many dealers hire a broker to take care of all the details, cover all the bases, and put together a deal that make sense to all parties.

Sometimes, however, the dealer can try to control the entire process, micromanage details and second guess recommendations made by the broker.

This clearly doesn’t make sense. Why hire an expert to care for details you’re not proficient at, and then not trust that expert’s opinion? My advice to dealers, after working in this field for many years, is to keep reminding yourself why you needed a broker in the first place. You’re great at selling cars, but your broker specializes in selling dealerships. You’re an expert in one field, while the broker you hired is an expert in something completely different. So trust him.

In other words, when your broker asks you to do something or change something, do it. Whatever it is that needs to be done will benefit you, the seller. It may not make sense to you, but remember—you’re great at selling cars, he’s great at getting you top dollar for your store.

The price question
A common point of contention is price. The selling dealer always seems to think his store is worth more than it is, while the buyer thinks the asking price is too high.

To find the solid middle ground, rely upon the expertise of the broker you hired to figure out the best way to determine price. And if he tells you the price is too high, why not listen? He knows the market you’re in, and he knows the brand you sell and what that’s worth to a potential buyer. Let your broker guide you.

And keep in mind your broker wants you to sell your dealership for as much as possible too. Just like the sales guy on your floor, your broker makes more when he sells your store at a higher price. However, your broker also knows what’s realistic and what will sell now, rather than a year from now.

Leave your business on the market for a year because your price it too high, and you’ll regret the decision. Not only will you have to lower your price eventually, but buyers may then conclude that they should wait a while longer, just in case you’ll lower your price even further. All this could have been avoided if you allowed your broker to do his job, price the business correctly, and get you the best deal right from the get-go.

Categories : Dealerships