Is It Time For An Exit Strategy?
For many owners, this is it: the moment all the hard work pays off. After running the marathon for years – decades even – you’re down the last mile sprint. With just a few more critical decisions, you can secure your future and turn that blood, sweat, and tears into the retirement you’ve dreamed of.
Now that you’ve decided to sell your shop comes the most critical decision of your career. Will you choose comfort or results? Are you going to choose a big financial payoff, or will you accept whatever you can get?
This might be the most important question you’ll ever answer, and it all comes down to basic math.
Let’s say you’re burned out and ready to retire. You’re sick of the grind and just want to put the business on autopilot until you can find a buyer.
There are a lot of shop owners in this situation. Every year brings more rules, more regulations, more fees, more bills, and less hope. It’s harder than ever to find the help you need, and the joy is gone. If this describes you, you’re absolutely not alone.
So, you talk to a broker, or you approach your employee, and you start the process of selling the business. No matter what number you have in mind right now as a sale price, it’s probably not enough.
Maybe your retirement plan is to buy a summer home, a place to bond with grandkids and relax away your golden years.
That summer home isn’t just the mortgage you’ll pay on it. It also comes with taxes, utilities, HOA fees, maintenance, and upkeep. Thousands of extra dollars in added monthly expenses.
But that’s not the only thing eating into your savings. As a business owner, you’re aware of how nothing ever gets less expensive. Taxes, fees, and insurance always go up. The value of your money always goes down. Your dollar earned two years ago is worth $0.89 now. The dollar you earned ten years ago is worth $0.76. How long are you hoping for your business sale proceeds to last you?
And then there’s the elephant in the room: the government always gets its share. Whether it’s the taxes on the net proceeds from the sale or the penalty paid on every withdrawal from your retirement account, the government isn’t about to let you enjoy your retirement that easily.
You don’t have to take my word for it: plug in your own numbers into a retirement calculator like https://www.bankrate.com/retirement/retirement-plan-calculator/
The bottom line is clear — selling your business for annual Net Operating Income won’t get you very far. Any plan that starts with just holding out until you can find a buyer is probably a plan that ends with you working in somebody’s business as an employee.
This knowledge is informed by very recent experience. A shop owner I’ve known for a very long time finally had enough of the grind. He got an offer from a local operation and knew he needed to take it. After all, by the time you reach this stage, almost nobody will try to stop you. Everyone will tell you it’s a great idea, you’re getting a good offer, and you should totally take this. So, he sold his shop and retired last year. Less than a year later, he’s back to working as a used car salesman.
Which is a very painful way of circling back to the start of this article: knowing just how quickly what seems like good money will evaporate in retirement, will you choose comfort, or will you choose results between now and then?
This is the part of the article with the good news and the bad news.
The bad news is that maximizing the sale price of your business will take hard work. You’ll need to build and empower a team who can help you maximize productivity and efficiency. You’ll need to overhaul your customer base and attract quality customers who listen to your recommendations and buy from you. You’ll have to stop accepting whatever falls in your lap and start engineering a better future.
Everything you do will need to be focused on creating a business where the trend is growth rather than maintenance.
And truth be told, you will not have a lot of help on this journey. We work in an industry where nearly every coach, every trainer, every tool, and every solution borrow from each other to the point that they’re indistinguishable. Everywhere you turn are products and services that will help you reach the middle and put you on a path to minimize your retirement.
But there is good news.
If you’re ready to take the path less traveled – the one that leads to maximizing your retirement and securing a future for your family – there are options.
First, be honest about what you’re currently doing in your shop.
Are you weeks out on your appointments? Are you regularly pausing your marketing because you’re too busy? You’re really just begging another shop to come along and take your customers.
Are you measuring, tracking, and adjusting your gross profit, productivity, and efficiency, and training your team on how to maximize their daily billed hours? If not, then you’re neglecting the very metrics that will lead to a maximum sales price.
If you’re really looking to get off this ride and maximize the return on your lifetime investment, the only thing you should care about is results. Anything less than excellent results means eating away at your potential retirement.
This isn’t the easy path. This will require you to grow and stretch — to change the way you run your shop. It will mean choosing tools that force you to change, coaching that challenges you to grow, and marketing that sets you apart from your competition. It will require breaking from the pack who are all copying from each other to try and reach comfortable, mediocre, average results.
But the difference in the paydays between choosing comfort and choosing excellent results is enormous.
And as an enormous upside, these are all of the things required to reduce chaos, eliminate stress, and maximize sales in the meantime. All of which means that you can be in complete control of your retirement: profitable, happy, and successful now, and comfortably and permanently retired when you’re ready to hang up your spurs.
David Rogers is president of Auto Profit Masters, Shop4D, and the award-winning Automated Marketing Group, and the COO of Keller Bros. Auto Repair in Littleton, CO. Together, these companies form an ecosystem of success for shop owners, offering proven, sustainable solutions for maximizing efficiency and growth, growing customer bases, and creating a culture of excellence. With nearly half a century of experience in the automotive industry (and they’re still growing exponentially), Auto Profit Masters and Automated Marketing Group have the tools and resources to help fix broken processes, set your shop apart from your competition, and elevate your business to the next level. Reach out to David via email at contact@shop4d.com or toll-free at 1-866-826-7911.