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
In any industry, an annual retrospective reveals trends that signal a shift away from the past and toward the future of the industry. A look back at 2017 in the retail auto sector calls attention to some trends that were expected and others that appear to be prognostications finally coming true.
Let’s take a moment to review some of the most important developments in the auto retail sector in 2017.
The Value Disconnect
The ongoing battle between buyers and sellers with respect to the value disconnect continued in 2017. We have seen some movement perhaps, to sellers looking at 2017 performance and realizing that while an auto dealership is still a good business, the sales increases were not the same as in recent years past. This may have had the effect of driving more sellers to market thereby creating volume in 2017.
Succession Planning or Lack Thereof
For years pundits and anyone watching the industry have been forecasting mergers and acquisitions (M&A) activity would rise to some degree because of family succession. It took some time, but in 2017 this appears to have started. This type of transaction has taken many forms. Some family sellers have determined the next generation will not (or cannot) operate the business, so they put the family business up for sale. In other instances, no “next” generation is available to take over, so the owner looks to transfer the business to trusted management or a third party. Unfortunately, I have also started to see forced sales because the owner either