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Archive for February, 2018

Attention Business Owners: Plan for Your Succession Now

Nobody likes to think about estate planning. Not only does the phrase evoke a sense of drudgery, but many people literally associate it with death. Clearly nobody wants to think about their own death, especially when there are deals to be done, customers to please and reputations to build. The visceral aversion to sitting down and thinking about what happens after is certainly understandable.

Photo by Benedikt Matern – sourced on Unsplash

The counterpoint to this clear and convincing emotional logic is inevitability — the day will come when you will not want (or be able) to operate your dealership(s) in the way you have in the past. Hopefully the decision to walk away is voluntary and you do so on your terms with rosy prospects on the horizon. Unfortunately, the decision to bid farewell to your dealership may not be in your hands, but whether it is or isn’t you can have much more control over the outcome by

Resolving Value Disconnect between Buyers and Sellers of Auto Dealerships

In my previous post “2017 in Review: Trends in Retail Auto Mergers and Acquisitions,” I highlighted an all-too-familiar and continuing trend: the battles between buyers and sellers over valuation — battles that arise from what I like to call the “value disconnect.”

Sellers, who naturally want to get top dollar for their dealerships, are often reluctant to admit annual sales increases or operational efficiency haven’t been the same as in years past. Buyers, who naturally want to pay as little as possible, use this fact in an attempt to negotiate a lower price. Bringing the two sides closer to a reasonable valuation of a given dealership can be one of the biggest challenges in the negotiating process.

Unfortunately, finding a phrase to reflect the source of this friction (the phrase “value disconnect”) is far easier than pining down its causes or finding a “go to” tactic to combat it. In this post, I examine the causes of the value disconnect, separating the causes attributable to the seller from those attributable to the buyer, and I offer guidance on how to