There are many important factors to consider when negotiating a business purchase or sale in addition to price. These are four of the more common ones we see when helping clients manage transactions in the collision repair industry.
There are things you can do to that may increase your multiple like building scale or investing in training and technology. But in general, the primary way to increase the value of your business is to improve your financials. Here are 5 simple ways to increase the value of your business.
One of the first things we do when working with clients (helping them sell or helping them expand) is to perform a business valuation. Valuations are important because they set a baseline. It answers the question ‘what is my business worth?"
Insurance providers and vehicle owners have increasing expectations for excellent service, rapid repairs and low costs. The result is additional investments in process and procedures like lean, 6 sigma and kaizen.
I certainly believe that increasing technological complexity fundamentally changes the industry. And, depending on your inclination and your time horizon, it can either be seen as a huge opportunity or a huge threat.
Because of the everyday personal relationship I have with the industry, I find myself constantly evaluating the industry's ongoing progress and the many outside resources that help to create an improved customer experience that enhances the overall perception of our business.
Financing equipment or facility upgrades is commonplace in many industries. While many of us were raised with the notion that debt is bad, the reality is that debt is simply one tool of business finance when prudently used. A core tenant of corporate finance is that the liabilities of the firm ought to match the assets of the firm.
I often ask business owners, paint and body technicians, customer service representatives, estimators and other members of the team the following important question: “Why is there never enough time to do the job right the first time; however, there is always time to go back and do it again?”
A common misconception is that organic growth is less risky and less costly than inorganic growth. But as humans we are actually inherently bad at assessing risk. Referred to as probability neglect, we assume that common activities we engage in are inherently safer and less risky than less uncommon activities.
When considering growth by acquisition, a lot of time is spent identifying and quantifying synergies. Synergies are advantages that come about through the integration of two companies that, individually, the two companies would be unable to achieve. There are three common types of synergies: revenue, cost, and financial.
I do not believe that .25 percent increase will materially change the M&A market, in the automotive industry, or otherwise. The reality is that most businesses do not collapse because of a .25 percent change in lending rates.
We all know it’s too easy for that follow-up to fall through the cracks. That’s why I believe you need to have a standard operating procedure in place, and one or more people responsible for that follow-up.
Our Collision Repair newsletter from ABRN provides up-to-date news, innovative products, technical discussions and shop management features designed to enhance your business. Published every Tuesday and Friday