KNOWING YOUR WORTH IS KEY IN EITHER SCENARIO

Column by Nancy Rolland

The pandemic has caused many business owners to reconsider their long-term goals of owning and operating their businesses. Shutdowns and personnel shortages have clearly been a drain on many, while severely impacting financial performance and their ability to effectively service customers.

If you are thinking about exiting the race, consider having a professional business intermediary, such as an investment banker review your business and provide a free, no obligation valuation. Most can perform this task quickly by reviewing your financials and asking a few preliminary questions about your operations. If you do this, make sure you find an intermediary that specializes in your industry. They will have the most current knowledge of what is happening in the marketplace and what buyers are willing to pay. Following are a few of the items they would ask you to provide.

Financial Statements

Gather your financial statements and tax returns for the last three years as well as the current year to date and the previous year’s comparable period. Many prospective buyers like to see how the business has operated on a trailing 12-month basis, so the two periods are necessary to calculate operating results.

Owner’s Benefits

Identify how much you are really earning from your business that a new owner can also expect. Also known as seller’s discretionary earnings (SDE), this takes into consideration any personal expenses you are running through the company, such as personal car leases, cell phones, salaries to non-working family members, etc. SDE is calculated by taking your company’s profit as shown on your tax return and adding back potential expenses that may not be incurred by a new owner as well as other expenses, such as non-recurring or non-related business items.

Staffing

Address any personnel issues or deficiencies in advance of a sale. If you are planning to completely exit the business, make sure you have at least one person in place who may be able to assume your role and duties. One of the biggest reasons buyers are attracted to and pay higher prices for businesses is knowing they have great teams in place. If you expect that the new owner is going to have to hire someone to perform your duties, anticipate a negative earnings adjustment.

Facility

Take a walk through your facility with ‘buyer’s eyes’. Could it use a thorough cleaning, a fresh coat of paint, or new equipment?

Selling your business is much like selling your home. You want to make it as presentable as possible, even in the collision industry. Having done numerous site visits during my career, clean, organized shops still stand out in my mind and command the best price. Keeping a well-organized and clean shop is like teaching your children the importance of making their bed. It’s not the task itself, but the development of discipline and good habits that are learned during the process.

Rent Check

Double check your facility lease or rent rate. If you own the property, are you charging yourself fair market value? If you are uncertain, contact a local commercial realtor for their opinion. If you are leasing it from a third party, how much time is remaining on the term? Are there any onerous conditions?

Customer Base

Who are your customers? How wide of a geographic region do you cover? Do you provide prospective buyers with an opportunity to expand into a new area or strengthen their existing territory? Do you have a diversified customer base that would help in the event one of them underperforms during a particular period?

Companies with multiple sources of income to smooth out the economic hills and valleys almost always garner the highest valuations.

Suppliers

Similarly, be prepared to discuss your relationship with your paint supplier as well as other vendors. Do you have an outstanding prebate that will need to be paid off at closing?

Our team has represented over 20 clients in the last few years with annual revenues more than $500 million. We would love the opportunity to discuss your specific situation.

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"Cars in a Professional Collision Repair Workshop with Technicians Expertly Restoring Vehicles to Pre-Collision Glory"

Unraveling the Essentials: A Comprehensive Guide to Efficient Collision Repair Solutions

In the aftermath of a traffic accident, navigating the maze of collision repair can be a daunting ordeal. Yet, the key to swiftly restoring the harmony between life and the road lies in understanding the essentials of efficient collision repair solutions. This comprehensive guide is designed to unravel these essentials, ensuring that your vehicle receives the care it needs to return to its pre-collision glory.

**1. Initial Assessment and Estimation**

The first step in the collision repair process involves a thorough assessment and estimation. Professionals will examine your vehicle to determine the extent of the damage. Utilizing latest technologies, such as 3D scanning and computerized estimating systems, repair shops can provide accurate and detailed estimates, ensuring transparency and fairness in the repair process. Prioritizing shops that offer free, no-obligation estimates can also be a beneficial practice.

**2. Choosing OEM (Original Equipment Manufacturer) Parts vs. Aftermarket Parts**

A crucial decision in the repair process is the choice between OEM parts and aftermarket parts. OEM parts are produced by the vehicle’s manufacturer and guarantee a perfect fit and optimal performance, maintaining your vehicle’s value and integrity. Meanwhile, aftermarket parts, often less expensive, might not always match the exact specifications of your vehicle, potentially affecting performance and safety. For high-quality repairs, OEM parts are generally recommended, though in some cases, aftermarket parts can serve as a budget-friendly alternative without compromising on safety.

**3. Technological Expertise and Certification**

The complexity of modern vehicles, with their advanced safety systems and computerized components, requires a high level of technological expertise. Choosing a repair shop with certified technicians, who are trained in the latest repair techniques and technologies, is essential. Certifications from organizations like I-CAR (Inter-Industry Conference on Auto Collision Repair) signal a technician’s skills and knowledge in collision repair, offering reassurance that your vehicle is in capable hands.

**4. Paint Matching and Finishing Techniques**

The final appearance of your vehicle, upon completion of repairs, is predominantly determined by the quality of paint matching and finishing techniques. Advanced color matching technology ensures a seamless blend between the repaired areas and the original paintwork, preserving the aesthetic appeal of your vehicle. A high-quality repair shop will use environmentally friendly, water-based paints, and computerized paint mixing systems to achieve an impeccable finish.

**5. Understanding the Warranty**

Before committing to a repair shop, understanding the warranty offered on the repair work is critical. A reputable shop will stand behind its work with a comprehensive warranty that covers both parts and labor. Ensure you are clear about the warranty’s duration and what it entails. A solid warranty is a testament to the confidence a repair shop has in its workmanship and the quality of the parts used.

**6. Communication and Customer Service**

Excellent communication and customer service are the hallmarks of a reputable collision repair shop. The repair process should be transparent, with regular updates on the progress of your vehicle’s repairs. Professional shops will handle the coordination with insurance companies, alleviating one more concern from your list. Selecting a repair facility that values customer service ensures a more manageable and stress-free repair experience.

In conclusion, efficient collision repair solutions hinge on making informed decisions at each step of the process. From the initial assessment to the final touches, understanding the essentials delineated in this guide empowers you as a vehicle owner, ensuring that your collision repair journey culminates in a seamless and satisfactory outcome. Remember, quality repairs are an investment in your vehicle’s future, safeguarding its performance, safety, and resale value.

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