Frequently Asked Questions from Buyers
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Good news, that’s our role. We’ll discuss your location preferences, budget and preferred OEM’s. From there, we can discuss listings we have “on-market” and “off-market listing”.
Off-market listings are dealerships we know are preparing to sell. Preparing to sell often means they are 1-3 years away, yet interested if the right buyer were to come into play.
If we don’t have an active dealership or off-market listing to fit your needs, we’d have our staff reach out to our network of Canadian dealerships and OEM partners to discuss interest in their dealership.
Bottom line; If you’re a qualified buyer with an intent to buy, we’ll find you the right dealership to purchase.
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Longer than you think! I’ve seen clean deals, were an employee is buying out the owner take over well over a year!
Below is an average timeline:
Seller review; Working with us on valuations, business package:
2-4 months
Marketing of business; Working leads and potential buyers:
1 mth to +24 months
Finalizing letter of intent:
2 to 6 weeks
Finalizing formal legal document:
As quick as a few weeks, to months
OEM approval:
2 to 4 months
Finance approval/removal of final conditions:
1 to 6 months
Summary:
Average timeline 12-16 months
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Each OEM has their own unique set of standards and rules for a new owner. It’s rare an OEM will decline a high quality buyer. It’s more likely that the OEM may require some facility upgrades, a new sign to meet standards and updated showroom displays.
It’s our job is to help navigate the expectations in advance with you, so there are no surprises.
Depending on the OEM/Manufacturer, they have a finance arm or partner they work with. For example, it could be Honda Finance or Wells Fargo. Each finance company has their own set of approvals and minimum net worth requirements.
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Go Right Powersports does not charge for the purchase of a dealership. For you, there is no cost for our services.
Our compensation is paid by the selling party. If the buyer requires specific assistance such as business plan development, market study, or marketing plans, we would work with the buyer on a per-job basis.
So, if our services are free to you AND you have interest in buying a dealership…shouldn’t we talk?
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Each OEM is different in their onboarding and ongoing trainings.
They include onsite classroom training, field product training, technical onsite training, virtual training, website-based training, and in-person dealer meetings.
There are specialized Powersports training companies, such as Wheel House College, Garage Composites, Spader, and Sandler, that offer Powersports training courses and events.
A decade ago, industry training was primarily learned from co-workers. Now, the industry boasts a wealth of talented companies specializing in our field, dedicated to building high-quality, successful dealerships.
Frequently asked questions for a seller.
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Great question and the most important for a seller. It comes down to four fundamentals.
1) Your financial results over time. Strong financials = high selling price.
2) Your building valuation is significant. Often holding as much or more value than the business itself.
3) Location: Metro, rural or extreme rural? A key location in your city or off the beaten track?
Like it or not, location does matter to buyers!
4) Opportunity for growth. Is there untapped market share potential in your market? Do you have growth potential within Powersport’s five profit centers?
Understanding an unbiased approach to points 1 and 2, are fundamental on a solid business evaluation.
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It comes down to the prior question, what’s my business worth. Highly profitable dealerships, in a great locations, demand high multiples. The inverse holds true as dealerships running adjusted financial losses in rural settings will have low multiples.
The current earnings range from low 1’s to over 4 times EBITA.
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Understandable. We would customize our approach accordingly to maintain confidentiality. We leverage are list of pre-approved buyers, use one/one discussions and targeted direct mail.
Once a prospect is under a non-disclosure, we’d only than share specifics. This protects your confidentiality
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Longer than you think! I’ve seen clean deals, were an employee is buying out the owner take over over a year to close!
Below is an average timeline:
Seller review; Working with us on valuations, business package:
2-4 months
Marketing of business; Working leads and potential buyers:
1 mth to +24 months
Finalizing letter of intent:
2 to 6 weeks
Finalizing formal legal document:
Few weeks, to months; depending on the complexity of the sale and the lawyers involved.
OEM approval:
2 to 4 months
Finance approval/removal of final conditions:1 to 6 months
Where does that leave a timeline: Average timeline would be 12-16 months
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I joke, yet am serious. Would you let your spouse know, you’re planning to sell? You should have the same answer with your OEM!
YES! Once you have made the decision to list and sell your dealership. Few things frustrate your OEM partner more, than to find out after you close on your sale. Your OEM partner should be aware and supportive of the process.
If your OEM isn’t on board wouldn’t you like to understand in advance why and address it?
Working with your OEM so that they understand your exit plan and are on board is important to a smooth buy or sell.
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If you had an amazing multi-million dollar custom-built house with unique features, would you list it on Kijiji or accept the first offer from a fella that was driving by one day? Unlikely!
You most likely would enlist a local realtor who specialized in high end homes, who would market your home, bring in multiple buyers for the highest price. The realtor would provide expert guidance and navigate the process.
Same holds true for your unique business. Partner with a professional who understands Powersport transaction from tip to tail, who understands how to navigate the complex process.
If you already have an interested buyer, our job is to generate MULTIPLE buyers from our marketing, data base and industry contacts.
Net result is more prospects = higher selling price.
We are happy to set up a listing contract that includes your existing prospect. If they end up being the right buyer, we’d be happy to adjust our compensation accordingly. Call us to discuss your specifics.
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You’re too close to the business; sellers emotions will always come into play during negotiations. Your dealership is your blood, sweat and tears. There is lots of emotion in dealership sales!
Acting as a third party, we translate your emotion into active, positive negotiations to continue to close, for the highest dollar outcome for you.
Just like in Powersport sales, you need a large sales funnel and process to find a buyer. This process takes a ton of time, qualification and follow up. All of this would take you away from running your business and making money: What you are best at!
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Maybe, if they have the experience. I’d ask them how many Powersport dealerships sales have they been involved with. What is their expertise level to get a qualified prospect and close the deal with the OEM’s and finance companies.
Bottom line; You want an expert working on your behalf, for your best outcome.
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No. I am a registered realtor in Manitoba. Each province has their own strict requirements for the profession, backed by a securities commission. There are a few unique realtors who are qualified in a couple of provinces.
If as a seller, you required an Asset sale of your property/building, I would partner with a local professional realtor, to provide expertise as needed. Most of my competitors: Lack any real estate specialized training and expertise.
Reality is—every local market is unique! Just because I have expertise in Manitoba, it wouldn’t be realistic to think I know the detailed market uniqueness of Comox, BC regardless of being their many times.