AKRON (Aug. 27, 2007) — Independent tire dealers spend years planning, working hard and sacrificing time with their families to build their dealerships into successful concerns.
While creating a viable business seems rote for many dealers, the entrepreneurial spirit, drive and knack for making the right moves that worked so well for them in building the operation don't necessarily translate into having the insight to know what to do with it when it's time to get out.
For whatever reason, many dealers have found it difficult to put together a plan for the future of their dealerships when they are no longer around or want to retire—whether that's to find a qualified buyer or to pass it along to a family member.
Often the best plan these owners can come up with is: “I hope somebody comes along and wants to buy my dealership.”
While that does indeed happen, this is no way to treat a business that took years of hard work to create.
The same care and effort that went into establishing the dealership should be applied to developing a plan to pass it on, if for no other reason than to provide the owner with a fair return on his or her investment.
That's why it is critical for all tire dealers to develop an exit strategy or succession plan.
That's easy to say, of course, but often difficult to put into practice.
Even some of the most successful independent tire dealers in North America struggle with this issue.
Steve Craven, owner of Craven Tire & Auto in Fairfax, Va., is one of the lucky ones. He recently signed an agreement to sell his eight-outlet dealership to Monro Muffler Brake Inc. after having been courted by the chain for the past 10 years.
But Mr. Craven, who's only 54, said he didn't want to retire from the tire business. “It's not what I wanted to do or planned to do,” he said. “It was in the best interest of my family.”
He sold out in part, he said, because he had no succession plan. Pending lease issues and a “fair offer” from Monro sealed the deal.
The scary part is that Monro and other large tire chains are banking on this lack of long-term planning by dealers to expand their own operations.
Monro has made no secret of its interest in buying out independent tire dealerships where the owners don't have a succession plan or want to exit the business.
“We are the exit strategy,” said Joseph Tomarchio, Monro's executive vice president of store operations.
That may work for some tire dealers who are willing to take the risk that a company like Monro will be there to snap up their dealership for a reasonable price when the time is right.
But for those wanting to better control their own destinies, having an exit strategy/succession plan is the only way to go.