The Six Data Reports Warren Buffett Will Want To See When He Offers To Buy Your Dealership Part II

Part II
How to Get the Reports You Need Without Disrupting Your Dealership

Review Part I

As discussed in Part I, having your staff prepare the six marketing and financial reports that are critical to responding to a buyer can disrupt the morale of your dealership. Secrecy is imperative at the early stages of most deals, and so many dealers get stuck between trying to discreetly present qualified data to an interested buyer, while keeping their employees focused on their responsibilities. The result can be information that comes too late, or is incorrect.

In order to prevent alarm inside the dealership, a dealer needs to pose a plausible alternative reason for the requesting the Data of the Deal reports, so that staff will prepare them just like any other out-of-the-ordinary request from the boss. Some good reasons are:

  • The “insurance company” is appraising the adequacy of the dealership’s coverage,
  • The dealer is applying for a capital loan, and the bank needs to calculate the dealership’s performance,
  • A CPA firm is developing the dealer principal’s estate plan,
  • The dealer is considering buying out partners or siblings.

Disguising the reasons for the request should avoid staff disruption, and makes the problem of compiling these complex reports easier. In most cases, this is the first time these reports have been developed, and there is a learning curve. Doing the research, assembling the data, analyzing it, verifying accuracy, and formatting for presentation can still mean taking a couple of weeks to respond to a buyer.

The best way to eliminate these problems is to have staff generate these data reports periodically, especially if you are contemplating selling, or want to develop an exit strategy or succession plan. In addition to being prepared for a purchase offer, or developing an exit strategy, there is one good reason why this information should be current and at-hand. This data, especially the market information, encourages greater awareness of a dealership’s current market performance and financial strength.

With up-to-date valuation data always close at hand, a dealer principal will be able to respond discreetly to an inquiry by providing worthwhile information promptly. All parties benefit by this important preparation: the dealership’s value will be more quickly determined; the buyer receives the most accurate picture of the dealership’s operation; and the staff will be minimally disrupted.

Market success and transaction volume are increasing as more investment capital seeks fewer dealerships than at any time in the last three decades. Pressure to sell is rising. Smart dealers need to be ready with qualified, current franchise valuation reports to enter into discussions which could produce a deal they don’t want to miss.

Now is the time to initiate an internal policy to generate these reports on a regular basis. GW Marketing Services is happy to provide you with templates so that your staff can start to generate these vital reports on a business-as-usual basis. With this data ready to be sent discreetly to prosepctive buyers, you will be “pre-positioned” to reply promptly with qualified information to an inquiry or offer – increasing the likelihood of selling your store for the highest possible value. 

 New England’s Most Experienced Auto Dealership Broker
GW Marketing Services knows what it takes to get 
the highest possible value for your dealership.

Contact Gordon NOW!