Q&A: Preparing for Life After Shop Ownership
Selling a repair shop is often treated as a financial decision, but for owners who have spent decades building their businesses, the transition can be deeply personal. Scott Anderson, president and CEO of GreatWater 360 Auto Care, has worked with numerous shop owners through the acquisition process and has seen firsthand the hopes, fears and challenges that come with leaving a business behind.
Here, Anderson discusses how owners can prepare for an eventual exit—both for the business and for themselves.
Ratchet+Wrench: Why is the emotional side of selling a shop so often overlooked?
Anderson: Most shop owners are wired to solve problems. They spend years thinking about profitability, growth, staffing and customers, so the emotional side is less tangible and often gets pushed aside.
But the emotional piece can have a major impact on whether an owner is satisfied after a transaction. These owners have spent decades building a business that represents their reputation, relationships, routines and accomplishments. It becomes part of their identity, so separating themselves from ownership can be difficult.
RW: How far in advance should owners start preparing for an eventual exit?
Anderson: Ideally, several years before they intend to sell. Most owners spend years building the business financially but may spend only a few weeks preparing themselves emotionally.
They need to think about what the next chapter looks like and how intertwined they are with the business. They should also have those conversations with their families early and often. A sale can affect the entire family, particularly when expectations have been set about passing the business to the next generation.
RW: What can owners do now to make a future transition easier?
Anderson: They need to build themselves into the business while also working themselves out of the day-to-day operation. That means building a leadership team, documenting processes and reducing the business's dependence on the owner.
Owners should become more of an overseer rather than the person responsible for everything. One good way to practice is to take longer vacations or step away for days at a time and allow the team to make decisions without them.
RW: What are signs that an owner may not be ready to let go?
Anderson: If conversations about a potential sale repeatedly come back to maintaining control after the transaction, the owner may be having difficulty envisioning life after ownership.
We see owners move the goalposts on timing or change previously agreed-upon terms late in the process. Those can be signs that they haven't fully prepared themselves for the transition.
RW: What should succession planning look like for an owner who isn't planning to sell anytime soon?
Anderson: Succession planning isn't about leaving the business. It's about building something bigger than yourself.
Owners should think about how they can create a business that can continue without them, whether they're eventually passing it to a family member, transitioning it to an employee or selling it. The focus should be on leaving the business in good hands and carrying the legacy forward.
One practical step is to make a list of every critical function that currently sits on the owner's shoulders. Then identify who could potentially take over those responsibilities. That can increase the value of the business while also giving the owner more freedom.
RW: What would you say to an owner who feels guilty about considering an exit?
Anderson: There's a difference between abandoning a business and selling a business.
Owners have spent decades building their companies, creating opportunities for employees and providing quality service to customers. If they partner with the right successor, they're not necessarily abandoning what they built. They can be helping protect the business, its employees and its legacy as they move into the next chapter.