Accept you ever asked yourself the catechism? Is this a acceptable age to sell my bag? That is a catechism every bag owner asks himself, every age he has a bad day. I once received e-mail from the editor of the Auto Body Statement, asking me that answer catechism. What is happening in the marketplace today? Is this a acceptable age to sell? My abrupt answer was These are actual absorbing times.
Of course that answer doesnt acquaint you anything that you can amuse your teeth into. So! Let me clarify my answer. Since I accept been selling body shops for 10 age, I accept seen abounding changes in the body shop industry. One affair that hasnt changed is that there accept always been an abundance of both sellers and buyers. The buyers accept always been, and still are picky about what they were looking for.
The absolute shop in the eyes to the buyers is (A) one that has a customer base and a revenue stream that is reliable and isnt dependent on the owner being there to retain each alone customer, and. (B) doing a volume of at least $100,000 per month, but really much added. Ample volume sellers anticipate that if they accept a DRP (Direct Repair Program,) they accept what body shop buyers appetite. A DRP is where the insurance companies set up a accord with the body shop to accomplish all insureds body shop bag, much according to an HMO in the health insurance field.
This may be what buyers appetite, but the DRP contracts are not automatically transferable, and a buyer will be actual atramentous if the DRP leaves, the buyer, after they accept paid a lot almighty dollar for this reliable revenue stream. Smaller volume sellers, on the other-hand, not having corporate accounts, dealerships or other contracts still accept achievement for getting lots of almighty dollar for their shops. The average shop I amble across is alone doing about $300,000-$500,000 annual gross income. So what we accept is a bearings where a lot of buyers are looking to buy a shop, but there are not a lot of shops available, which fit what they are, absorbed in-$1,500,000 annual gross income or added.
This year, one chicken feed has occurred. There are fewer shops available than at any age in my job. Not fewer of the ample volume shops for sale, that is fairly stable, but fewer of the baby mom and pop repair shops that accept not been in heavy demand. The astuteness, I accept this has happened is as of the booming economy. Low volume shops are doing bigger than they accept in age. They are manufacture almighty dollar, and accomplish not air as much pressure to close down. They still would according to to amuse out, but when they acquisition out that their 5,000 sq. foot shop which is manufacture them a $100,000 grasp profit, is alone worth $100,000 on the accessible marketplace they decide to accumulate on working.
As always, the shops doing $1 Million to $3 Million per year gross income is still in demand. The price alone still is the main agency, in determining if these shops will sell. A acceptable archetype of this is what is happening in lower Orange County. There are currently a couple of shops in Lower Orange County that are for sale, by the owners. They arise to be actual profitable but the asking price is too aerial and the buyers all apperceive it. Even the actuality that these are the alone shops available for sale in this prime area has not changed the actuality that buyers aloof refuse to over pament.
Last year I was marketing a aerial volume shop, in Ventura County. The buyers refused to pament the asking price, even though the volume was there. Why? The profit wasnt. In this bearings, the buyers would not pament for the volume and stability of income unless the grasp profits were there. They didnt assume that they would accomplish a profit where the current owner was not. It appears that the buyers of today are actual careful. I accept they accomplish not assurance their own adeptness to amuse advanced bag and accordingly are too careful.
To ablaze up any confusion about what affectionate of buyers we are talking about, lets breach the buyers up into categories. The aboriginal category is the consolidators. There are two ample ones in Southern California but they are not the entire marketplace. I accept talked to out of state consolidators that accept inquired about moving in to the So California marketplace. Consolidators appetite shops that fit their model. That model sometimes changes but basically they will buy a shop if it fits their model.
If it doesnt, they will not touch it. The price by itself doesnt turn their absorption on or off. We accomplish not accept enough space to altercate what this accumulation will buy, in this article. It is enough to add, If your shop fits their criteria they would accept contacted you and expressed absorption. If they havent contacted you, they are not absorbed. Period! They apperceive their marketplace abode and who is in it.
By the road, if I owned a shop that a consolidator wanted, I would never sell to them. Being a able negotiator for 20 age, I acquisition the requested seller financing terms totally unacceptable. When I accept discovered what the terms of the sale are, after the actuality, amazed me. I had buyers for the selfsame almighty dollar, or added, without the seller being at risk, but no one asked me.
The second category is the multiple location shop owners. Usually with one or added DRP contracts shop that wants to expand into added areas. They are actual absorbed in the sq. footage of the shop, and its adeptness to arm over $2 Million Gross Income per year. This buyer alone looks in limited areas. The areas being where they accept been offered a DRP contract. When they are looking, they charge it any more, while the window of befalling is accessible to them. If they cant acquisition it abrupt, they will not charge it at all. Recently I had a multiple shop buyer who had fabricated an action and was negotiating on a shop in West Los Angeles. By the age we finished the negotiations, the DRP contract was gone and consequentially, so was the buyer.
The third category is the buyers who accept worked in the industry before, but accomplish not currently own a shop. Again in this accumulation are the buyers who accept family in the industry; almighty dollar is no botheration. This buyer believes If it doesnt accept a DRP, forget it. If it has a DRP and isnt manufacture much almighty dollar, again forget it. If it has a DRP, and it is manufacture almighty dollar, they are absorbed but alone at what they accede is a unbiased price (In their eyes). This accumulation I accept successfully changed their apperception as to how they analyze what a acceptable shop looks according to and on age they accept bought shops with a steady reliable income, instead of trying to acquisition a shop with alone a DRP insurance contract.
The fourth category is the person that aloof wants a shop. They will accomplish what they accept to, to afford a shop-that will assignment for them. This accumulation is the working body man or auto repair shop mechanic. As of their limited funds, this buyer will alone pament what he or she feels the equipment is worth. They will pament annihilation for goodwill as they accept that the sellers customers are not stable and will allowance when the ownership changes. Are they amiss?
In Conclusion: There are a lot of buyers out there. My database has over 250 current names of body shop buyers. There is currently a shortage of shops for sale but mostly in the properly priced category. Most days I air according to a marriage broker with a lot of plain brides and a few beauties. The dowry for the beauties is added than most acceptable-looking boys will pament. The balance of the girls may not be appealing, but some of them can sure cook. Anyone appetite to amuse married? Accept I got a babe for you
About the author:
Willard Michlin is a Bag Broker, California Absolute Estate Broker, Accountant, Able-bodied accepted Public speaker and Administrative/Bag Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at [email protected]grasp Beam other articles by Willard at
Originall posted December 20, 2011