If you’re thinking about selling your auto repair business or collision repair business, this is a good time for it. I’m seeing a lot of current interest in auto repair shops and collision shops, both locally owned and franchised. Inflation and higher interest rates over the past few years have prompted many car owners to invest in the vehicle they have instead of trading it in. That’s good news for you, and why so many buyers are eager to buy into the automotive repair industry.
When you’re ready to sell, you have two goals: get the best price possible for your company and get a deal that offers the best terms possible. More good news for you: there are several things you can do to add value to your business before you list it.
The first is to make sure your books are clean and organized. Your tax returns and your books must reflect the same information. Trust is a crucial component of any business sale, and a buyer needs to have confidence in the numbers you’re presenting to them.
This is the time to separate your business and personal expenses, be well organized, and have all the documents a buyer or lender will want to see during the diligence process. It’s challenging to run a business and respond to a buyer’s requests, so the more organized you are in advance of the sale, the less stressful the process will be.
Repair or replace aging equipment. The assets of your auto shop—your paint booths, lifts, and diagnostic equipment—are a big part of the sale. The new owner will want to know if they’ll have to replace expensive equipment, which will be an important factor in their early profit projections.
Comply with environmental regulations. A buyer and lender will investigate your company’s safety and hazardous materials policies and incident reports as part of the diligence process. Anything that increases the company’s risk or liability (past or future) will be a red flag.
Improve your operation’s efficiency – and profitability. Buyers are looking for a company with a strong cash flow and growth potential. The bottom line for any buyer is SDE – Seller’s Discretionary Earnings. This is the amount of money a new owner can reasonably expect to earn annually after all company expenses are paid. Anything you can do to increase that number will pay off when you sell.
Structure your workforce so that you don’t spend your time turning a wrench. A buyer is looking to acquire a business, not a job. If your business is dependent on you being there every day, overseeing every repair, your company will be less sellable. Do what it takes to train and promote your most reliable employees. If you have some who are not pulling their weight, this is the time to let them go.
If you don’t have written standard operating procedures or have outdated ones you need to work on, invest the time to get them right. Savvy buyers will look for structure and consistency in how your workers do their jobs. It will also make hiring and training easier for the new owner.
Finally, Check your brand’s standing in the community. If you haven’t been paying attention to online reviews, this is the time to check them – a prospective buyer certainly will. Your reputation is almost as important in the sale as your equipment. No one will offer much for a repair shop that doesn’t take care of its customers or make things right when problems come up.
You only get one chance to sell your company and make the best deal you can. Your first step should be to find an experienced business broker with industry expertise who can give you an opinion of value. A seasoned broker will also help you develop a plan for fixing issues and maximizing value before you put your company on the market.
Click here to get a complimentary and confidential opinion of value.
About the author:
Jim Parker is a highly respected leader in the business brokerage industry, specializing in selling auto repair-related businesses. His results consistently outperform industry norms, setting him apart as a top broker in the field. As a three-term Chairman of the Business Brokers of Florida (BBF), representing over 800 members, Jim has played a pivotal role in enhancing the profession’s standards and reputation. He also serves on the board of the International Business Brokers Association (IBBA), the largest global organization of its kind with nearly 3,000 members. He will assume the role of Chairman in 2026.
With over 50 industry awards, Jim is a sought-after speaker who has presented to audiences of up to 800 people on a wide range of topics. He is one of only 20 professionals globally to hold the prestigious designations of Certified Business Intermediary (CBI), Certified Mergers and Acquisition Professional (CMAP), Masters Certified Business Intermediary (MCBI), and Mergers & Acquisitions Master Intermediary (M&AMI). Jim’s influence and expertise continue to shape and elevate the business brokerage profession.