We list some of the top auto-related businesses for sale in the United States and can certainly keep you informed when new opportunities arise. By registering as an “Auto Repair Boss Insider,” you’ll receive notifications about auto-related businesses that come up for sale before they’re publicly listed. To become an “Insider” and gain early access to these opportunities, simply click here.

Jim specializes in selling auto-related businesses across the United States, and the top owners in the industry trust him due to his reputation for being selective with the businesses he represents. This selectivity ensures that buyers have access to quality listings worth their consideration. Jim follows a specific set of criteria when choosing businesses to list. Generally, the business should have at least $750,000 in gross sales, be in operation for 5 or more years, maintain good financial records, and overall, be a solid operation. Additionally, it’s important that the seller is trustworthy, likeable, and has realistic expectations regarding the sale price.

The reason you are required to sign a confidentiality agreement and provide financial details before receiving information about an auto-related business for sale is to protect the seller’s interests. The seller needs assurance that the information they share will not be misused or harm their business in any way. By signing the confidentiality agreement, you agree not to disclose any business details to anyone without the seller’s consent. Providing financial insight also helps the seller evaluate whether you are a serious and financially capable buyer, ensuring that their time is not spent on unqualified prospects.

Buying an existing auto-related business offers many advantages over starting one from scratch. One of the most significant considerations is that 80% of new businesses fail within their first five years. Purchasing an established auto-related business greatly improves your chances of success and helps safeguard your investment. Additionally, it can take over two years for a new business to become profitable, whereas with an existing business, you can begin generating income right away. A major part of what you’re buying is the “goodwill” of the business, including its customer or client base. While running an existing auto-related business still requires effort, it is generally less time-consuming than building one from the ground up. Furthermore, banks are typically more willing to lend for the purchase of an established business, as it comes with a proven track record.

While starting an auto-related business might seem more affordable at first, purchasing an existing business can often be more cost-effective in the long run. A new business typically requires regular cash infusions until it becomes self-sustaining, which could take months or even years, and many businesses never reach profitability and end up closing. In contrast, when you buy an established business, you can expect to start earning a paycheck or dividends right away. Over time, purchasing an existing business can be far less costly and offer a much higher return on your investment, not to mention significantly reducing the risk involved.

When acquiring an auto-related business, buyers have different preferences for the types of professionals they involve and to what extent. Some prefer to handle the process on their own without professional assistance. However, it’s highly recommended to enlist the help of an attorney to review legal documents such as purchase agreements, leases, and closing paperwork. Additionally, working with a CPA or accountant specializing in financial due diligence is important to ensure the business is performing financially as the seller claims. Depending on your specific situation, you might also want to consult with a loan officer, business appraiser, or commercial building appraiser. SBA 7a loans, for example, can be used to purchase, expand, or refinance debt on an auto-related business.

While the seller ultimately sets the asking price, we collaborate closely with them to determine a price that will most likely attract buyers. Using the financial data provided by the seller, we “recast” the financials to calculate what a buyer would earn if the business continues to perform as the seller claims. This process takes into account the net profit, the owner’s salary (assuming a single buyer working full-time), any loans being paid off (as businesses are typically sold free of debt), depreciation, amortization, non-essential business expenses, and benefits paid on the seller’s behalf, such as health insurance. The result of this process is called the “adjusted net.”

We then compare this adjusted net to that of similar businesses in the industry that have recently sold, using gross sales figures and discretionary earnings to provide a “Broker’s Opinion of Value” (BOV). The seller may or may not choose to list their business at the BOV price, as the final asking price is ultimately determined by how much the seller is willing to accept and what a buyer is willing to pay. This is known as an “arm’s length transaction,” where both parties act in their own self-interest without external pressure or influence.

There are several ways to finance the acquisition of an auto-related business. One of the most popular options is an SBA 7(a) loan, backed by the Small Business Administration, which can be used to purchase a business. Another option is a HELOC (Home Equity Line of Credit), allowing you to borrow against the equity in your home. You might also consider a 401k rollover, which lets you use your retirement savings to fund the purchase of a business. Owner financing is another possibility, where the seller finances part or all of the purchase price. Additionally, private lending can be an option to secure funding for the acquisition.

We can help guide you toward more detailed information on these financing options.

When purchasing an auto-related business, the asking price typically covers all of the business’s assets, including furniture, fixtures, equipment, inventory, and goodwill. However, items like money in bank accounts, deposit accounts, and accounts payable are generally not part of the asking price. Accounts receivable may or may not be included, depending on the specific terms of the sale. It’s crucial to work with an experienced business broker to clarify which assets are included and which are excluded, ensuring they align with how the business was valued.

A common misconception is that if an auto-related business is for sale, it must be losing money. While this can sometimes be true, there are many other reasons why a seller might choose to list their business. It’s essential to look at the full picture and understand the owner’s story before jumping to conclusions. Some of the most common reasons for selling include health issues, retirement, marital or family matters, relocation, pursuing other business ventures, or simply fatigue and burnout. Every seller has their own unique motivation for selling their business.

Due diligence is a crucial step in purchasing an auto-related business. It involves verifying the income and financial statements provided by the seller to ensure both parties are aligned on what will be transferred in the sale, preventing any surprises at or after closing. Many buyers engage their CPA to assist in the due diligence process, especially after an Offer to Purchase or Letter of Intent (LOI) has been accepted. This phase includes a thorough review of the business’s books and records, counting inventory, inspecting equipment, and more. While there are standard checklists for due diligence, this is the buyer’s chance to evaluate any aspect of the business to ensure they are comfortable with the overall operation before finalizing the purchase.

Additionally, all purchase contracts prepared by our business brokers include a contingency to protect the buyer. If the buyer is unsatisfied with the due diligence results, they are entitled to withdraw from the contract with no financial obligations, and their escrow deposit will be fully refunded. This ensures that the buyer has the freedom to walk away from the deal without financial risk if the business does not meet their expectations.