When it comes time to sell your business, you may consider hiring a business broker. Brokers can be especially helpful in the sale of a tire dealership because they handle a wide variety of tasks including business valuation, advertising or marketing the business, prospect interviews, negotiation, due diligence interactions and other critical aspects of the sale.
Could you sell your business on your own, without the services of a business broker? Sure. But more often than not, successful business sales are accomplished with the assistance of a qualified intermediary.
With the difference between a successful business exit and a total disaster hanging in the balance, here are some of the questions tire dealers should ask when selecting a business broker:
What are the broker’s qualifications?
Look for members of the IBBA (International Business Broker Association), or a state brokerage association or other type of trade organization. Many of these organizations require fundamental and ongoing training in the finer elements of business transactions. In addition, some brokers are designated with the accreditation as a CBI, or Certified Business Intermediary. These brokers have been through extensive training on the crucial details of business for sale transactions that can benefit you and your business-for-sale.
Will the broker help prepare your business for sale?
A good broker can make the process of preparing your store for sale a lot easier. Ideally, your broker should walk you through a systematic preparation process that removes potential hurdles and maximizes business value – even if it means delaying the listing for a few months. Never settle for a broker who isn’t concerned about preparations or who appears willing to rush the preparation process.
How does the broker plan to market your business?
It takes skill to market a tire or auto service store to qualified prospects, i.e. buyers with the desire and capacity to actually make an offer. Your broker’s marketing strategy should begin with a compilation of materials that will be distributed to serious prospects and should continue with creative, aggressive marketing ideas that specifically target individuals who have the ability to purchase the business.
Does the broker have a track record in selling tire businesses?
Although a successful track record overall is important, it won’t mean much unless your broker also has experience selling tire or auto service stores. Like other industries, the tire industry has its own unique traits and characteristics. Unless your broker understands the nuances of the tire store industry, it’s unlikely he will be able to accurately represent your interests to buyers. Even more, it is doubtful that an inexperienced tire or car service broker has the industry contacts to connect with the right buyers.
How long does it usually take for the broker to sell a tire store after it is listed?
The selling time for the average properly-priced business is between six and 12 months. The best brokers should be able to prepare and sell a listed tire store in six to eight months, excluding businesses with extenuating circumstances. If the sale of your store takes longer, make sure it is for a legitimate reason.
What kind of relationship can you expect to have with your broker?
For broker-assisted sales, my best advice for sellers is to build personal rapport with their broker and to trust their expertise. Communication is an essential element of the selling process and it’s not unreasonable to ask brokers how often you can expect to hear from them. If a broker has a reputation for carrying a large client load, the likelihood of a close business relationship drops dramatically.
The right broker can help sell your business at the high end of the market, while the wrong one may be unable to complete a sale at all. Since there is so much at stake, dealers should talk to at least three brokers before making a decision. With just a little effort, you’ll find a broker who is able to sell your business in a timely manner – and at a great price.
Mike Handelsman is group general manager for BizBuySell.com and BizQuest.com, both founded in 1995. Each site features business valuation tools that draw from the largest databases of sales comparables for recently sold small businesses and include two of the industry’s leading franchise directories. Together, the sites list more than 75,000 businesses for sale at any time and have over 850,000 monthly visits. Handelsman began his career in brand management with Procter & Gamble, and also worked as a management consultant with McKinsey & Co. in Chicago and San Francisco. For the past 15 years, he has had experience dealing directly with start-ups and early-stage businesses.
