In the 50-plus years I’ve been stumbling around our industry it’s safe to say I’ve known more than my share of shop owners who have successfully exited the business. But, I’m not sure that I can say it because I’m pretty sure it just isn’t true! You see, while I can think of at least a couple of shop owners who have managed to do just that, I’m not sure I can come up with more than just a couple. And the reasons for that seem to become abundantly clear when you factor in the natural insecurity that seems to be pandemic within the repair community in general and our natural reluctance to share triumphs or tragedies with anyone we believe might judge our actions.
One of the many reasons successfully exiting your business and/or the industry is so rare is that it takes a fair amount of planning to create something someone else will deem a worthy investment. But, even if you’ve done that, it will still take a team of professionals to help guide you through the mountains of paperwork laid out by city, state and local government.
Certainly, the easiest way to accomplish any or all of this would be to groom someone internally who is willing, interested and able to do just that. Alas, grooming someone is something most shop owners have failed to cultivate in the past and are not likely to cultivate in the future. And, if you look at the industry with an objective eye, there is good reason for that, namely the failure to make your business as profitable as possible.
It will take that kind of profitability to ensure that whoever it is within your organization who is willing to take the reins from you will be capable of funding the transition and, ultimately, your retirement. Since most shops across the country are marginally profitable, if at all, well, you can see where that is going.
There is one other issue here that is rarely addressed and that is the fact that the majority of individuals within our society aren’t crazy enough to expose themselves to the entrepreneurial virus. They don’t want the responsibility, the crazy customers, supply chain drama, continually escalating costs and/or the pressure of making payroll.
It’s quite possible you might have someone in your organization more than capable of taking over, but are they willing or even interested?
As we all know or discover all too quickly, entrepreneurship is a contact sport! You’re either in it to win it or you’re on your way to a slow and painful demise. That means a successful exit strategy will often require the enlistment of an interested and highly motivated third party—a coach and/or consultant and then a business broker and/or agent. Someone both willing and able to successfully “stage” your business for a “quick” and profitable transition.
My experience with brokers started soon after I was diagnosed and realized that my long-term plans had been subverted by my body’s inability to create healthy red blood cells and that it was unlikely the one person I would have given almost anything to see take over the business would be able to make that happen. Once that became clear, I found myself lost deep within an enchanted forest filled with trolls, gnomes and more than a couple of frogs.
I should mention that this may be one of those rare instances where things really may be different where you are. I know I’ve made my career insisting they aren’t, but this is California and that should be all I have to say on the subject! In California, if you can sell a house, you can list a business. If you are a licensed real estate broker, you’re a licensed business broker. In reality, it’s two entirely different skillsets and my experience was terrifying until I was able to kiss the one frog that actually turned out to be a prince!
Before finally finding the right frog, everyone I talked to was brilliant, an expert in the sale of automotive service businesses, aggressive, relentless and a kindred spirit. No one would work harder. No one could possibly care more. The good news is that after 50 years of having people trying to blow smoke my way I’ve managed to develop a pretty sensitive BS (business sense) meter and was able to navigate the minefield of insanely optimistic promises and purposely unanswered questions.
The good news is I was finally able to find the one guy who was willing to take a chance on honest answers and the simple, but compelling statement that while new at “this kind of thing” he would “work his heart out” for me. So, I “kissed” him and what do you know, it turned out he really was a “frog prince!”