Built this garage from scratch over 18 years. Two lifts, four bays, loyal customer base, solid books. I'm ready to retire but have no clue where to start with valuation or finding a buyer. Any advice?
Selling
How do I value and sell my auto repair garage business?
You'll want a business broker who knows the auto service industry. Generic brokers will underprice you. Get a professional valuation, not a free one from some website.
18 years and you're just now thinking about this? lol. But seriously, your lease is probably the biggest factor. Do you own the building or rent?
Own it. Paid off five years ago. That's why I'm thinking the property alone is worth a lot.
Most garages sell on seller's discretionary earnings (SDE), usually 2-3x. But owning the real estate changes things. You might do better sellinvg the property separately to a real estate investor and the business to an operator. Just my two cents after watching a buddy go through this.
Curious what you're expecting? I see garages listed for $500k+ but some sit for years. Buyers want to see clean books. If you've been running cash deals, that's going to hurt you.
SparkplugSally makes a good point. I bought a shop three years ago and the seller had hallf his revenue off the books. Made valuation a nightmare. Get a CPA to normalize your financials before you list.
Or just sell it to me for $50k. I'll even throw in a used truck. Kidding. Mostly.
Ha. I'll keep that in mind, Larry. Books are clean, all on the up and up. CPA does them quarterly. I'm mostly worried about finding a buyer who won't run it into the ground aftre I leave. It's got my name on it.
That's a real concern. Some buyers want an earn-out or a transition period where you stay on for for 6-12 months. Could help you get a better price too.
Honestly, the customer list is probably worth more than the lifts and tools. If you've got a solid base of repeat customers, that's your selling point. Emphasize that in the listing.
Also, check if any of your current employees want to buy you out. Sometimes the best buyer is already in the building. My cousin sold his tire shop that way.