Are you considering selling your tire dealership or automotive service shop? If so, the winning formula for your situation may be to turn the business over to one or more trusted employees. Here's why.
Whether they are retiring or changing careers, some dealers and service shop owners feel entirely justified in selling their businesses in the most-convenient manner and for the best buck. They close that chapter of their lives and move on to the links, the beaches or possibly to another business venture.
When you've worked hard creating and/or growing a business, you surely have earned the right to ride off into the sunset when you decide it's time. What's more, you're entitled to whatever you can pocket from the sale of this business. After all, you took all the risk so you should get all the rewards.
However, more and more bosses I meet who are planning a sale are emphasizing other issues.
For instance, they're concerned about showing plain old pride of ownership, about lowering personal stress levels, about rewarding worker loyalty and keeping a personal commitment to the community. This combination of factors has convinced some bosses to sell their businesses to worthy employees for less money than they could get on the open market. Here are some details they tell me influence the decision.
First, some bosses plainly admit that, egotistical as it may sound, having their name on the building has matured their outlook on selling the business. Typically, the buyer wants to capitalize on that name when he or she takes the reins of the business. Mushy as it may sound, some bosses fear a new owner who might exploit the motoring public on the back of their established name.
After all, the seller knows he or she can't avoid that same motoring public at church functions, school events, the movie theater and supermarket.
In other words, they don't want to feel like they're looking over their shoulders in their hometowns as a result of the new ownership's tactics.
Second, lowering stress levels has become more and more important to sellers who are weary of fighting business-world wars. Let's face it, depending upon where you're located and what you need to get from the transaction, selling a business is not easy. Some former owners have told me the smartest thing they ever did was working out financial arrangements to sell their businesses to deserving employees. Obviously, this eliminated the need to put on the ``selling'' posture and deal with realtors and prospective buyers. (Many of us know what a joy that is!)
Often, selling to employees means playing ``banker''-financing the deal for them yourself. However, the last two fellows I know who went this route are thrilled with the results and continue bragging about what a stress-free transaction the sale was.
Third, some owners are extremely sensitive to the issue of rewarding worker loyalty. In one instance, a 17-year employee bought the shop from his boss. In another instance, two managers with 13 and 14 years of service, respectively, took over. Indeed, both businesses are thriving.
Some owners admit that, years ago, one of their bosses either overlooked them as prospective buyers of an auto service facility or else flatly refused to help them get financing to do a deal. They tell me they resent that slight to this day. Consequently, they don't want to limit opportunities for workers who consistently made them a lot of money over the years.
Last but not least, some bosses see all the issues I've just listed as part of an overall commitment to their community. Yes, they flatly state, they can make money at tires and service anywhere. They're confident of their skills. But they've put down stakes in a community, provided valuable services and profited as a result. However, they don't want to see a hard-earned trust-the trust that attracted great employees and loyal customers-violated by a capricious new owner.
What's more, the seller's tacit agreement with the neighborhood has been to give something back in community services whenever possible. Selling the joint to employees also means the scout troop, little league team, seniors' meal programs etc., can still count on the business' support for the indefinite future.