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Powersports Business • September 2023 • 13

BY BRAD STANEK & PAULINA MATEL CONTRIBUTING WRITERS

Selling your dealership is a significant undertaking that requires careful planning and execution . Darris Blackford , the organizational director for National Powersports Dealer Association ( NPDA ), told us on a recent webinar that owners must heed both the art and the science of valuation . The art of preparing a dealership for sale “ involves developing a clear vision and strategy for your family ’ s future ,” explains Blackford . In our last article ( Part 1 ), we explored the buysell landscape for the powersports industry and discussed the importance of allocation buckets in a buy-sell transaction . We also reviewed important deal factors that buyers will consider when acquiring a dealership .

In Part 2 of our article , we will discuss the following key takeaways :

Take time to define what a successful transaction looks like for you and your family . Understand the importance of having a written plan .

Understand what makes your dealership so valuable . Be realistic about what can add value .

Make sure you have a deal team and a quarterback overseeing the process . Having advisors who know the buyer community gives you a big leg up .

The price you receive is much less important than your “ walkaway ” number . It ’ s never too early to start the planning process .

DEFINING SUCCESS On our recent webinar with George Chaconas and Courtney Bernhard , partners at the powersports division of Performance Brokerage Services , we discussed the importance of defining a successful dealership transaction well in advance . Before entering negotiations , Bernhard said its very important to sit down with your partners , your advisors , and your family to know exactly what you want out of a deal . You must always be willing to walk away if the offers you receive are too distant from the number that works for you and your family . Additionally , you should know how long you are willing to stay on post-sale . If you do choose to stay on , what are the terms of the transition , and what do you want to do with your real estate , whether it be leasing or selling it . It ’ s very important to think through all the tax consequences of exiting with your advisors before you go to market . Personally , we ’ ve found it very useful to memorialize all these key components into a written exit plan that you and your team of advisors can execute .

DON ’ T LOSE SIGHT OF DAY-TO-DAY OPERATIONS

It ’ s essential to keep the business running as though you are not going to sell . Slowing down or checking out mentally from the business while negotiations are taking place could raise lots of red flags for potential buyers . Likewise , if your deal falls through , you don ’ t want to be playing catch up for months or even years just to get your business back on track .

BE REALISTIC ABOUT WHAT MAKES YOUR DEALERSHIP SO VALUABLE

No two dealerships are the same . Are you in a desirable geographic area that certain buyers want to enter ? Do you carry certain lines that they ’ ve always wanted to have ? Does that make your territory more valuable ? What ’ s your growth potential ? As Bernhard and Chaconas have shared with us , if I ’ m a buyer who sees an opportunity to take your business from $ 10 million to $ 20 million in gross revenue , that ’ s a lot more attractive than buying a $ 12 million dealership that ’ s likely to stay at $ 12 million . If you ’ re trying to show great upside potential , you don ’ t want to show flat revenue over your three most recent years .

Having an advisor who knows the buyer community can be a huge advantage when it comes to knowing what they ’ ll be flexible about and what they ’ ll hold firm on . We know a dealer who didn ’ t quite get the price he wanted , but was able to get a 10−year lease on his real estate rather than the usual 3−5 . That was a huge amount of guaranteed cash flow in his pocket over the next decade .

DEAL TEAM Preparing your dealership for sale is too complicated and time-consuming to do on your own .

A good CPA will help you recast your financial statements to determine your true profitability and advise you on the best deal structure if you ’ re a C corporation or an S corporation or an LLC . Your CPA should help you understand what your “ walkaway ” number will look like after taxes and transaction costs . You also want a good transaction attorney who can help you negotiate the asset purchase agreement .

A good broker will help you negotiate the Letter of Intent , identify the best buyer for your business , and offer the opportunity discreetly to protect your confidentiality . Finally , you ’ ll need a financial planner who can help you quarterback the entire transaction and oversee the efforts of all the other advisors . They can also help you plan your financial transition to a new life without a dealership to run ( or the regular income it generates ).

The more experience your deal team has in the powersports industry , the better your chances of a successful outcome . Remember , preparing your dealership for sale is a complex array of financial , legal , tax , valuation , and emotional decisions . It ’ s also about planning for contingencies such as death , disability or divorce .

FINAL THOUGHT You ’ ve worked too hard to build your dealership to leave exit planning to chance . Start the planning process well in advance and make sure you have the right team in place to ensure the best possible outcome for you , your family , your dealership , and your community .

Brad Stanek , CFP is an Executive Director and Financial Advisor with The Stanek Group at Morgan Stanley in Chicago , IL brad . stanek @ ms . com

Paulina Matel , CFP , CEPA is a Financial Advisor with The Stanek Group at Morgan Stanley in Chicago , IL Paulina . Matel @ morganstanley . com

BY DAVID GEE CONTRIBUTING WRITER

Today the most successful salespeople aren ’ t engaged in solution selling or consultative selling . They ’ re engaged in problem finding . And when done well , it elevates the salesperson from product peddler to trusted advisor .

For several thousand years , or so , there has been relative scarcity around a particular product or service until a salesperson entered the scene to provide information and nurture a sales process . That is no longer the case .

Facts and information have never been so widely available and easily accessible . The internet , social media , and now AI have ushered in yet another new paradigm . In a matter of minutes , a prospect or customer can know all about you , your company , your products and services , your pricing , your competitors , and what your buyers are saying about you .

That ’ s why today ’ s prospects and customers don ’ t typically enter at the top of the sales funnel , but rather from the side . You have to keep that in mind with your sales and marketing messaging . As a result , the last thing our audiences need from a salesperson is a bunch of product features and specs . That ’ s not the way our brains are wired to make a decision anyway . You can ’ t reason your way to a sale . You see , reasons lead to conclusions , while emotions lead to actions . And every single decision we make , including every buying decision certainly , is rooted in – and driven by – emotion .

So , when cutting through today ’ s buying clutter , creating emotional connections quickly as early as possible is vital for whatever it is we are selling or marketing .

Why then , if we know all this , are so many salespeople still stuck in the old-fashioned ways of telling and selling ?

“ Part of it is simply because many of us like the sounds of our own voices ,” opines Leif Larson , technologist , inventor and serial start-up sales entrepreneur . “ I also think there is a bit of nervousness on the part of salespeople , even really experienced ones . They tend to be high energy and passionate and may not be particularly comfortable with silences or pauses . So they fill that space with constant talk and a flow of information . But if you ’ re not leaving enough opening for the prospect or customer to respond the formal sales interaction can become very one-sided .

The customer wants to participate !” I had a mentor advise me on this a long time ago when he wisely said “ if you ’ re running your mouth you ’ re not learning .”

So how do you ensure this problem finding process happens ? By using sales techniques informed by neuroscience and human psychology . Precise , strategic questions asked at just the right time that take the prospect or customer through a discovery process , and don ’ t trigger sales resistance .

“ Salespeople who have learned what are called neuro , emotional , persuasion questions will naturally deliver well above a buyer ’ s expectations because their dialogue will uncover pertinent problems the prospect is not even aware of ,” says acclaimed sales trainer Jeremy Miner . “ That ' s called problem finding .”

It sounds rather simple , but it ’ s not easy . It requires a tremendous amount of curiosity , emotional intelligence and a desire and willingness to listen . And learn .

In fact , Leif says at his company the top 20 percent of salespeople are outperforming the bottom 50 percent by spending 60 percent of the formal sales interaction listening .

“ Active listening is the most underdeveloped skill of salespeople today ,” states Larson emphatically . “ Yet for those who have that skill it is a remarkable superpower .”

Salespeople often get overly focused on our own specific objectives and outcomes when instead we should be laser focused on the objectives and outcomes of our prospects and customers .

When we genuinely have a desire to help someone ’ s business , and not just complete a transaction , this will create emotional connections which in turn will create a competitive advantage .

And we need it . The signal to noise ratio in the sales and marketing ecosphere has never been higher . We are all drowning in non-stop marketing messages .

It is hard to earn – and keep – the time and attention of our audience .

“ You have two main options for sales success today ,” says Larson in closing . “ You can either play the frequency game , knowing it can take up to 25 touches to get a prospect to even enter the funnel . Or you can tighten up your messaging , show up differently , be customer centric , add value , ask better questions , and turn a formal sales interaction into a discovery process . We should all aspire to become sales detectives .”