{"id":1,"date":"2021-07-10T16:00:00","date_gmt":"2021-07-10T16:00:00","guid":{"rendered":"http:\/\/trmpartnersgroup.com\/?p=1"},"modified":"2021-07-10T21:06:39","modified_gmt":"2021-07-10T21:06:39","slug":"selling-the-dealership-how-do-you-close-the-deal","status":"publish","type":"post","link":"https:\/\/trmpartnersgroup.com\/staging\/selling-the-dealership-how-do-you-close-the-deal\/","title":{"rendered":"Selling the Dealership: How Do You Close the Deal?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1\" class=\"elementor elementor-1\" data-elementor-settings=\"[]\">\n\t\t\t\t\t\t\t<div class=\"elementor-section-wrap\">\n\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2361eee elementor-section-full_width elementor-section-stretched elementor-section-height-default elementor-section-height-default\" data-id=\"2361eee\" data-element_type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;,&quot;stretch_section&quot;:&quot;section-stretched&quot;}\">\n\t\t\t\t\t\t\t<div class=\"elementor-background-overlay\"><\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-884ee62\" data-id=\"884ee62\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5ddb1be elementor-widget elementor-widget-spacer\" data-id=\"5ddb1be\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-d4e42c0 elementor-section-content-middle elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"d4e42c0\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-narrow\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-9e0fda2\" data-id=\"9e0fda2\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b33025f elementor-widget elementor-widget-heading\" data-id=\"b33025f\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Selling the Dealership: How Do You Close the Deal?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ebe9698 elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"ebe9698\" data-element_type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<div class=\"elementor-element elementor-element-e931f16 elementor-widget elementor-widget-spacer\" data-id=\"e931f16\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-93eeee2 elementor-section-stretched elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"93eeee2\" data-element_type=\"section\" data-settings=\"{&quot;stretch_section&quot;:&quot;section-stretched&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-ac7d935\" data-id=\"ac7d935\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e1c0f3b elementor-widget elementor-widget-spacer\" data-id=\"e1c0f3b\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-d520a47 elementor-section-stretched elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"d520a47\" data-element_type=\"section\" data-settings=\"{&quot;stretch_section&quot;:&quot;section-stretched&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-7a50134\" data-id=\"7a50134\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c51c492 elementor-widget elementor-widget-text-editor\" data-id=\"c51c492\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t<p><b>By Gregory P. Dougherty, CPA, and Ronald Sompels, CPA,\u00a0<\/b><b>Crowe LLP<br \/><br \/><\/b><\/p><p><span style=\"font-weight: 400;\">In the midst of a strong market for dealership sales, more owners are weighing the sale of their businesses. Once they make the decision to sell, determine the sales price, and assemble the necessary professional assistance, it\u2019s time to move forward with marketing and sale of the business.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">That means finding the right buyer and closing the deal promptly. This final stage typically involves several steps.<\/span><\/p><p>\u00a0<\/p><p><b>Preparing marketing materials<\/b><\/p><p><span style=\"font-weight: 400;\">To identify the best potential buyers who might have an interest, a dealer must develop materials that provide those individuals with sufficient information to determine if they should make an offer to purchase. A dealer usually will first create a \u201cteaser sheet,\u201d which is a very basic summary describing the opportunity without making it possible to identify the seller. For example, the teaser might tout the opportunity to purchase a Nissan dealership in Central Florida with X volume of new and used sales per month.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">A buyer who expresses interest will be required to execute a nondisclosure agreement (NDA) to receive more information on the target opportunity. When the NDA is executed and returned, the seller will furnish a more detailed prospectus. Generally, the prospectus \u2013 sometimes referred to as \u201cthe Book,\u201d which summarizes all the information that was considered in the determination of the dealership\u2019s value.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">Production of the Book requires the collection of a significant amount of data, including:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Financial statements for at least the preceding three years<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The volume of vehicles sold<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Summary of fixed operations<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The add-back schedule<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Customer satisfaction index ratings from the manufacturer<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A real estate appraisal<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Human resource information, including both pay policies and information on high-level managers<\/span><\/li><\/ul><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The selling dealer likely will need to bring some high-level managers into his or her confidence during this stage so they can assist in gathering the necessary data. The professional team working on the sale (such as CPAs, brokers, and attorneys) also will be helpful in gathering and assembling the data in a manner that puts the dealership in the best light.<\/span><\/p><p>\u00a0<\/p><p><b>Identifying potential qualified buyers<\/b><\/p><p><span style=\"font-weight: 400;\">Armed with the appropriate marketing materials, the broker will work with the dealer to ascertain those parties that the dealer believes would make good strategic buyers and have an interest in the dealership. The broker, CPA, and attorney probably will know other potential qualified buyers. The initial distribution of the teaser sheet should be limited, though, going to only the top five or so potential buyers.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">What makes a qualified buyer? The most important qualifications are the abilities to pay and to secure manufacturer approval. Most dealers also want to sell to reputable buyers who will carry on the tradition they have built. In addition to how a buyer will conduct the business, a dealer should consider the buyer\u2019s reputation for closing deals quickly \u2013 avoiding those with a history of dragging their feet, trying to renegotiate at the 11th hour, or simply not completing deals.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The dealer normally will control the list of potential buyers. If a dealer wants to exclude certain buyers for whatever reasons, he or she can do so.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">It is always good to have two or three potential qualified buyers. This not only is helpful in maximizing sales price but also provides a competitive price check on the dealer\u2019s own idea of the value of the business.<\/span><\/p><p>\u00a0<\/p><p><b>Moving from letter of intent to purchase agreement<\/b><\/p><p><span style=\"font-weight: 400;\">Assuming the process has run properly, it will lead to a letter of intent (LOI) from a buyer, which lists important sales agreement terms such as the purchase price and payment terms. If the transaction will be an asset sale (as most are today), the LOI also will describe how the assets are to be valued. It will contain various contingencies as well, including being subject to manufacturer approval, environmental inspections, and due diligence.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">Often, some of these post-LOI activities are not initiated until the purchase agreement is drafted and agreed upon. But, because most transactions are structured as asset sales and most of the asset valuation methods are now standardized, the length of time to go from LOI to purchase agreement is relatively quick.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The rigor and amount of due diligence will depend on the amount of preparation done beforehand, the quality of books and records, and the seller response time. The typical due diligence period will run 60 days, and the results could prompt further negotiation, which might drive down the initial agreed-upon purchase price.<\/span><\/p><p>\u00a0<\/p><p><b>Beyond the dollars and cents<\/b><\/p><p><span style=\"font-weight: 400;\">Although the final process involves several steps, the result is a successful sales closing. It\u2019s important to remember, though, that even the smoothest sales process can be a very gut-wrenching experience for the selling dealer, peppered with numerous ups and downs and twists and turns.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-76ff6fd elementor-section-stretched elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"76ff6fd\" data-element_type=\"section\" data-settings=\"{&quot;stretch_section&quot;:&quot;section-stretched&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-faf6194\" data-id=\"faf6194\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-bf091e6 elementor-widget elementor-widget-spacer\" data-id=\"bf091e6\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Selling the Dealership: How Do You Close the Deal? By Gregory P. Dougherty, CPA, and Ronald Sompels, CPA,&nbsp;Crowe LLP In the midst of a strong market for dealership sales, more owners are weighing the sale of their businesses. Once they make the decision to sell, determine the sales price, and assemble the necessary professional assistance,<a class=\"more-link\" href=\"https:\/\/trmpartnersgroup.com\/staging\/selling-the-dealership-how-do-you-close-the-deal\/\">Continue reading <span class=\"screen-reader-text\">&#8220;Selling the Dealership: How Do You Close the Deal?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"_links":{"self":[{"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/posts\/1","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/comments?post=1"}],"version-history":[{"count":12,"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/posts\/1\/revisions"}],"predecessor-version":[{"id":796,"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/posts\/1\/revisions\/796"}],"wp:attachment":[{"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/media?parent=1"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/categories?post=1"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trmpartnersgroup.com\/staging\/wp-json\/wp\/v2\/tags?post=1"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}