how to sell my auto repair business

1. Prepare Your Business Records. First things first: prepare your official records. ...
2. Obtain a Formal Business Valuation. Next, you’ll need to get a formal business valuation of your auto repair shop. ...
3. Contact a Business Broker to Sell an Auto Repair Shop. ...
4. List Your Auto Repair Shop for Sale. After you’ve received your official business valuation for your auto repair shop, it is time to list the body shop for sale.

How to prepare an auto repair shop for sale?

How to Prepare Your Auto Body Shop for Sale. 1 1. Prepare Your Business Records. First things first: prepare your official records. Potential buyers want to see official documentation, and lots of ... 2 2. Obtain a Formal Business Valuation. 3 3. Contact a Business Broker to Sell an Auto Repair Shop. 4 4. List Your Auto Repair Shop for Sale.

Why hire a business broker to sell your auto repair shop?

Because business valuations are so sophisticated, it is vitally important that you enlist the expertise of a professional business broker who will show you how to sell your auto repair shop and guide you through each part of the process.

What do you say to someone who owns an automotive repair business?

A comprehensive look at what you need to consider before settling on a price tag. I’d like to congratulate you on owning a successful automotive repair, parts or service business. It takes a considerable amount of sacrifice to be successful in today’s heavily saturated market.

Is the auto repair business easy to make money?

But that doesn’t mean the auto repair business is easy money. As a consumer-facing entity, auto body shops rely on superb customer service to keep patrons coming back. They also depend on their clients as a marketing tool: satisfied customers will spread the word, bringing in new business and potential life-long clients.

How do I value my auto repair business?

Asset-Based Valuation The auto repair shop's assets (land, building, equipment, tools) are adjusted to fair market value, along with any liabilities (bank loans, amounts owed to vendors). This method values the business as assets less liabilities.

What is the average profit margin for auto repair?

For the automotive repair industry, the average profit margin is between 20-28% for parts and 50-65% for labor. In order to maximize your profit margins, you either need to increase your revenue or decrease your costs.

How can I promote my auto repair business?

If you are curious about what is the best marketing for auto repair shop, keep reading.Website Branding. ... Search Engine Optimization. ... Social Media. ... Email Marketing. ... Local Reviews. ... Content Marketing. ... Referral Program. ... Reward Program.More items...•

How do I value my auto body shop?

As a whole they produce $90B in annual sales. The average auto body shop is rather small with some $578,000 in annual revenues and a staff of just over 5....Example: Valuation of an auto body shop using multiples.MultipleMultiple valueBusiness valueHigh0.92$1,171,100Average0.37$623,100Median0.31$564,5002 more rows•Dec 19, 2012

What is the most profitable auto repair?

Brake jobs A car's brakes are one of the most critical. A full-service repair shop that offers brake adjustment, repair, and replacement services will never run out of brake job customers.

How do auto repairs make money?

6 Ways to Increase Auto Repair Shop ProfitsTake a Disciplined Approach to Your Finances. ... Schedule Appointments. ... Inspect Every Vehicle. ... Reduce Fees on Card Transactions. ... Invest in Current Customers (and Employees) ... Generate New Customers with Local Coupon Advertising.

How do I get more customers in my auto repair shop?

Host Free Seminars or Workshops If your auto shop holds a free car care seminar, workshop, or clinic—either at your shop or at another community event like a street fair or a farmer's market—you can attract new customers or remind existing customers of repairs or maintenance they may need to have performed.

What customers want in an auto repair shop?

What Customers Are Looking For In an Auto Repair ShopGood Reviews. One of the most important tools you can utilize for your business is positive customer reviews. ... Transparency. Unfortunately, there's a stigma about the automotive repair industry that's hard to shake. ... Efficiency.

How do I get customers for my auto shop?

Here are 5 marketing ideas for auto repair shops to help increase their word-of-mouth referrals.Use Email Newsletters to Keep in Touch. Email newsletters are the best way to stay in front of your customers. ... Thank People for Their Business. ... Be Social. ... Get Reviewed. ... Ask for Referrals. ... Stay in touch more easily.

How much does a mechanic shop owner make a year?

While ZipRecruiter is seeing annual salaries as high as $118,000 and as low as $19,000, the majority of Auto Repair Owner salaries currently range between $31,500 (25th percentile) to $57,500 (75th percentile) with top earners (90th percentile) making $81,500 annually across the United States.

What is the typical markup on tires?

"Our average margin is 19.87 percent, and we do have trouble selling tires at that percentage because customers state they can find the tires cheaper elsewhere." A parts manager in Southern Pines, N.C., replies: "I find that $25 a tire is enough to keep us in the market with everyone else."

How do I start an auto repair shop?

Start a car repair shop by following these 10 steps:Plan your Car Repair Shop.Form your Car Repair Shop into a Legal Entity.Register your Car Repair Shop for Taxes.Open a Business Bank Account & Credit Card.Set up Accounting for your Car Repair Shop.Get the Necessary Permits & Licenses for your Car Repair Shop.More items...•

How much do garage owners make UK?

The salary of a car repair shop owner can vary depending on how well the business is doing. But to get an idea, if they own a successful business that is producing a healthy amount of profit, they can expect to earn around £45,000 in the first couple of years, and then around £50,000 after 10 years.

What is the most important method of marketing a business?

Marketing and Advertising. A number of methods are used to market your business for sale; the most important of which is a daily process of AutoCenter Sales. A database of pre-qualified buyers nationwide is maintained and tapped for the sale of your business. This, in conjunction with trade publications, Internet, ...

Can you sell your car wash business on your own?

The process of selling your automotive business, as well as selling your car wash, is quite complex, therefore we never recommend that business owners try to complete a sale on their own. AutoCenter Sales will handle every aspect of your car wash or auto repair business sale, including:

Does AutoCenter Sales approve prospective buyers?

The franchisor, in nearly all cases, needs to approve the prospective buyer, and AutoCenter Sales is well aware of the requirements involved and screens each candidate to ensure candidates have the greatest likelihood of success.

What If I Want to Sell My Auto Repair, Parts and Services Business?

Broker – It’s best to use a broker if you own a small business (under $1 million in sales per year).

What goes into a business valuation?

What Goes Into a Valuation? A business valuation might come across as ostensibly complex, but it is simply a set of techniques and procedures that are used to determine the value of a business such as your auto repair, parts and service business.

How Does Your Business Compare?

Our team has taken data of auto repair, parts and services businesses that have been sold from the years 2010 to 2015 and graphed it in order to show the breakdown of the analysis of 1,726 auto repair, parts and services businesses sold. You can see by looking at the graph that businesses that have sold with higher multiples have a better return on your investment:

What is multiple in business?

Note: The term, multiple, referenced in this infographic refers to the multiplication of net earnings (profit) a business sells for.

Is selling a business easy?

Selling your business is not an easy decision and the process can be overwhelmingly complex. Make sure you have read as much information about how the process works and understand what your company is worth before you start the selling process.

How long does it take to sell an auto repair shop?

With PropertyCashin, you avoid footing the bill for repairs, commissions, closing costs, and any other expenses. Typically, we can close deals in under 30 days.

How long does it take to get a cash offer from a car repair shop?

After a walkaround of your auto repair shop, you can have an obligation-free cash offer from us in 72 hours or less. Also, we sometimes make property owners an offer the same day as our scheduled visit.

How long does it take to wrap up a real estate transaction?

Generally, we can wrap up real estate transactions in under 30 days. In our years of purchasing properties, we’ve refined our process to be as efficient as possible, which means you can count on us to make your selling experience equally easy and fast. If you need to sell your auto repair shop quickly to fix a bad financial situation or resolve other pressing matters, contact PropertyCashin sooner rather than later.

What to do when you take an obligation free cash offer?

When you take the obligation-free cash offer we present you with, the next course of action is to sign the purchase contract we’ll draw up for you. To make sure the closing date works best with your schedule and the specifications of all involved parties, we’ll sit down and find a mutually beneficial date.

How long does it take to transfer earnest money to a title company?

Additionally, we’ll transfer the earnest money deposit to the specified title company in 72 hours or less. On the closing date we decide on, we’ll meet with the title company to sign contracts. Then, the title company will transfer your cash to your specified account in one full payment.

What is the best way to start a business listing?

Investing your own money in marketing your listing, which could be a waste of time. Opening your property up for multiple inspections, appraisals, and tours. Waiting an unclear amount of time for a bank to either approve or deny a commercial mortgage. Having to start over if a buyer backs out or can’t secure funding.

Do you get cash on closing date?

On the specified closing date, you receive the entire cash amount from the title company. That’s it!

What is AutoCenter Sales?

With over 25 years of experience in the automotive business industry, AutoCenter Sales is the industry leader in the world of car wash and automotive business sales and purchases. We ensure each transaction is as seamless as possible, so you can pass your business on to trusting hands and enjoy your newfound freedom. If you’re ready to sell your automotive business or sell your car wash, contact us for a free, no-obligation consultation.

Can AutoCenter sell your business?

Quick and thorough process. AutoCenter Sales has a cache of willing buyers that are simply waiting for the opportunity to buy your automotive business. If you’re ready to sell your business, we have the experience and capabilities to make the process quick and seamless and to get the right buyer in touch with you. We typically work with both the seller and buyer in a single transaction, which makes for a more thorough experience.

The State of the Industry

The U.S. automotive repair and maintenance industry generates over $100 billion in annual revenue, and the industry is highly fragmented. The 50 largest companies generate less than 10% of industry revenue. Generally speaking, the industry is separated into maintenance repair shops and collision repair businesses.

Increasing Business Value

A business broker can help you increase the value of your business before a sale. Here are two ideas to consider:

Valuing the Business

Your auto repair business can be valued using several criteria, and a broker understands the differences between each method:

Other Ways a Broker Can Help

Raincatcher’s brokers have worked on thousands of business sales, and they can help you in a number of ways.

The Challenges of Selling an Auto Repair Business

When selling any kind of business, there are challenges that come along with it. This is especially true of certain service businesses. You not only have to find the right buyer, but they need to have certain skills and passions in order to really make the business work.

Finding a Qualified Buyer

The first key is to find a qualified buyer, but what is a qualified buyer? In this case, the person will need several qualities. Not only will they need to understand running a business, but they will need to have a deep understanding of the automotive industry and the direction it is headed.

Finding a Buyer Who Can Get Financing

The next challenge is finding a buyer who can qualify for financing and has the appropriate down payment.

Entertaining the Possibility of Other Types of Buyers

As mentioned, sometimes you can sell an auto repair business to an investor who wants to own the business, but not manage the day to day operations. There are other possibilities too, and other types of potential buyers.

Dealing with Location

What if your auto repair business is not in the greatest location? You can still sell, but you might not get everything you are looking for. When you hire a business broker, they can help you with a business valuation, and your location is a large factor in that. Whether you own or lease the premises where you do business is another factor.

Structuring the Sale

Lastly, the structure of the sale can be another challenge. There are a number of ways to structure a business sale, and finding the right one for an auto repair business is very similar to any other business. A business broker can help you walk through this process.

How to market an auto repair shop?

To get started on a simple yet effective marketing campaign, I recommend beginning with a basic website. For an auto repair shop, you don’t need anything fan cy – just generic information like hours, coupons, services, etc. Next, you will want to claim your social media pages and create posts a couple times a week. Finally, it’s a good idea to claim your page on internet review sites such as Angie’s List or Yelp. By doing this, you can ask customers to review you in a public, online forum which will promote word of mouth advertising, and it will help with your Google SEO rankings. Keep in mind that marketing takes time to generate business; don’t get discouraged while your pipeline is building.

What is a DPR in auto sales?

DPRs account for the majority of sales for most auto shops and are a fantastic source of dependable revenue. To obtain a DPR, you will need to meet various requirements set by the insurance agency. These requirements often include negotiated labor rates and approved vendors for parts. Once you have met the requirements of the insurance agency, ...

How to boost value in business?

A key factor to boosting value in your business is diversifying your supplier base and negotiating contracts to ensure fair pricing on materials. Expensive parts can eat up your profits and drag down your numbers. By diversifying your product suppliers, you have several options for when you need parts and can shop around if the price is too high or the lead time is too long. Having a varied supplier network will appeal to buyers because it shows them that your shop is always working to keep profits high and costs low, which will reflect in your financials.

What are the biggest mistakes that sellers make?

One of the biggest mistakes that a seller can make is leaving dollars on the table through an improper “recasting” of the financials that does not maximize the cash flow. A broker who has industry-specific experience will have seen dozens of financial statements for automotive businesses and, therefore, will know exactly which expenses to question as higher than industry norms.

What does it mean to sell a business with confidentiality?

Selling a business with confidentiality means you can’t advertise it by name or put up a sign, so it’s even more important to address several key aspects of your business before it is marketed .

Why is it important to have a broker?

Tax planning with your accountant is also important in reducing the ­impact of capital gains tax.

Is it a mistake to state a price?

Conversely, it’s also a mistake to state a price before knowing the full potential value of your business. Don’t sell yourself short by setting a price too quickly, even if you are burned out and highly motivated to retire, downsize or pursue other business ­interests. Remember, you can always come down, but it’s more difficult to raise your price once the marketing process begins.

Is it easy to exit a business?

You probably don’t expect the exit from your business to be easy, but without step-by -step guidance , most sellers are surprised by how difficult and frustrating it can be to sell their company for a good price in a reasonable timeframe, especially in the current economic environment.

Do accountants maximize profits?

Most business owners, and their accountants, do their best to minimize taxes, not maximize profits. Remember that buyers are buying your cash flow more than anything else. While there are a variety of sophisticated methods of valuing a business, the bottom line is that the sales price of the business will likely translate to a multiple of the cash flow — so everything that can be done to present your business with the highest cash flow will directly result in a higher sale price.

How to sell your shop on your own terms?

In order to sell your shop on your own terms, you have to be proactive, get your house in order and make sure your financial records are shipshape.

Why is it important to keep records of a shop?

Because one of the key factors in determining the value of a business is profitability, it’s critical that a shop’s records accurately reflect the financial health of the company. Records that are well-maintained over a period of years (rather than months) are helpful because they can reveal trends and explain aberrations.

How long after an acquisition do you ask for employment?

In many cases, sellers will ask for employment contracts (customarily six to 12 months) for themselves and/or key employees who will be staying with the acquiring company.

Do you own real estate when buying a business?

Also, many buyers don’t purchase the real estate when they purchase a business – they lease it back to the owner. Therefore, if you own the business and the real estate, the legal entity status that you operate under, and whether you commingle business operating assets with your real estate, may have significant tax consequences.

Is dry cleaning a business expense?

Similarly, many owners run personal expenses ( e.g. dry-cleaning, boats, ATVs) through the company and call them “business expenses” on their business tax returns. Not only is this potentially illegal (if not a legitimate business expense), but it may present downstream income tax exposure for the buyer of your business in the event of an audit after a sale.

Do you get credit for a body shop?

Even if you own your real estate and plan to lease it back to a future purchaser of your business, the way your property, building and equipment are treated in the deal is not unlike the way total losses are calculated. Just like the car owner doesn’t get “credit” for regular oil changes or headlights that go on and off, there is a presumption that your space is in good working order and functional as a body shop. You don’t get credit for that – it’s expected. While a purchaser of your business will assume they need to invest in new trade dress (e.g. paint colors, signage, design features, etc.) to make your space look like one of theirs, they will also expect that you maintained the property. If there is significant deferred maintenance, you can expect it will be a deal point – either you take care of it (at your cost) or the buyer deducts it from the purchase price.