Selling Your Car Dealership: The First 90 Days
Planning notes for the first three months after a dealer decides, privately, that it might be time to sell. No specific store here. Just the order of operations I would follow, and where a dealership buy sell advisor usually fits in.
For one firm's overview of the sell-side path, you can read more here on MD Johnson's site. The notes below are about the first 90 days, before any buyer sees a single page.
Days 1 to 30: quiet homework
The first month is about knowing your own position. Nobody at the store needs to know yet.
- Write down your goal. Full exit? Partial sale? A role for family? A timeline tied to a lease or a facility deadline?
- Pull the numbers. At least three years of financial statements plus year to date.
- List the adjustments. Non-recurring expenses and owner-specific costs, with backup.
- Look at the real estate. Own or rent? What is the property worth? What is the rent?
- Talk to your CPA and attorney. Early, and in confidence.
Note to self: resist the urge to call a neighboring dealer "just to see." One casual call can travel fast.
Days 31 to 60: choosing a dealership buy sell advisor
Month two is about picking the right help. Interview more than one firm. Ask each the same questions:
- Do you work sell-side only?
- How and when are you paid? Is there a retainer?
- How will you build the valuation, and will you show me the math?
- How do you keep the process confidential?
- How long is the tail clause in your agreement?
- Who handles the real estate?
For comparison: MD Johnson says it charges a fee on one side only, paid at closing, with no retainers, and that its subsidiary MDJ Realty handles the real estate part of the buy-sell at no additional cost. Use claims like these as a yardstick when reading other proposals.
Watch for the big-number pitch. An advisor who opens with an inflated blue sky figure is selling the engagement, not the store. MD Johnson says it will not give a "pie-in-the-sky number" just to sign an agreement. That is the standard I would want from anyone.
Days 61 to 90: getting ready for market
Once an advisor is engaged, the third month turns to preparation.
- Valuation finalized. A number you understand and can defend.
- Memorandum of Sale drafted. The confidential package qualified buyers will see.
- Buyer list built. Qualified, approved-capable buyers only.
- Confidentiality plan. NDAs, data room access, and who at the store gets told and when.
- OEM check. Any open issues with the factory, and any facility requirements a buyer will price in.
What comes after day 90
From here the process moves into Letters of Intent, the Asset Purchase Agreement, due diligence, factory submission and closing. That is where a dealership buy sell advisor earns most of their fee, managing several buyers, attorneys and CPAs at once. But the quality of those later stages depends heavily on how clean the first 90 days were.
Tax and structure, early
Asset sale or stock sale? How will the price be allocated? These are not day-80 questions. The IRS has a plain overview of the sale of a business that is worth reading before your CPA meeting in month one.
Not tax or legal advice. Work with your own CPA and attorney.
Short list to pin above the desk
- Decide the goal before the price.
- Clean books beat big promises.
- Pick an advisor whose pay depends on closing.
- Keep it quiet until it needs to be loud.
None of this commits you to selling. A good dealership buy sell advisor should be comfortable with a seller who is still deciding, and should help you test the idea before anything goes to market. More notes next time, on what buyers ask once the memorandum is out.