Business 11 www.aftermarketonline.net JULY/AUGUST 2025 Would they see a business that looks professional, with clean accounts, tidy systems, and a strong team? Or would they see something that only works because you’re there to hold it together? What’s it worth? A question with more than one answer One of the most misunderstood parts of exit planning is valuation. Most owners have a rough idea what they think their business is worth, but very few actually understand how that number is calculated. Is it based on turnover? EBITDA (earnings before interest, taxes, depreciation and amortisation) or net profit? You might hear terms like ‘3x net profit’ or ‘4x adjusted net’, but ask yourself: Three times what, exactly? If you’ve never been through a business sale, this stuff can feel like the language of demons. And while you don’t need to become a financial expert, you do need to be aware that the way something is valued affects what you’ll be offered. Some agents will base it on turnover, which can sound impressive, but we all know that turnover is vanity, and profit is sanity. Others suggest a multiplier. But again, is it on net profit, or adjusted net? Are they counting your salary and other benefits? Or removing them to show what profit the business would make without you? Many owners don’t realise there are different definitions of ‘net profit’ in relation to a sale, and which one a buyer or seller might be using. Even the accountants and brokers don’t always agree. If someone gives you a number, ask what they are basing it on. Any serious buyer certainly will. Preparing for a sale (even if it’s years away) Once you start seeing your business as something someone else might want to own, it changes the way you run it. You realise that ‘being busy’ isn’t the same as being valuable. You stop thinking just about how hard you’re working, and start looking at whether your business can still run when you’re not around. Would a buyer see a workshop with clear systems? Staff who know their roles? Or a place where every customer, complaint, and parts problem ends up on your plate? Presentation matters too. Are your accounts tidy? Are things recorded and traceable? Or is the knowledge still locked inside your head, or someone else’s? If your business is leasehold, here’s another factor people often forget: the lease itself. A serious buyer investing their own money will want security. A long lease, or at the very least the option to secure one, is critical. If the premises arrangement is short-term or vague, the deal becomes riskier, and the offer might reflect that. None of this is about perfection. It’s about confidence. You don’t need to wait until you’re ready to sell to start making those improvements. In fact, it’s far better if you don’t. Vendor finance – a useful option, but know the risks Here’s something that never came up in most of my agent conversations, but it should have. It is becoming more common, or should I say expected. Put simply, it means you agree to accept part of the sale price over time, rather than everything up front. It can help get a deal over the line, especially when a buyer can’t raise full funding. There are a multitude of ways to do this, far too many for this article. But let’s just say I have seen most of them. However, here’s the catch, you’re taking the risk. If the buyer struggles, you might not get paid. Worse, you might find yourself being asked to step back in just to protect what you’re still owed. That’s not to say it’s a bad idea. In the right situation, with the right buyer, it can work. You don’t need to use vendor finance. But you do need to know what it is and that there is more than one way to do it if the conversation comes up. Not just a sale — a strategy The whole point of exit planning is this: it gives you options. Whether you’re thinking about selling to someone new, passing it down to a family member, doing a staff buyout, or walking away, you’ll only be able to do that well if the business can survive without you. That doesn’t happen by accident. And it’s why exit planning is just another way of saying ‘building a proper business’. Because a business that doesn’t rely on you every day isn’t just easier to sell, it’s easier to live with while you still own it. It gives you more time, more choice and more freedom. Will someone want what you’re building? Most garage owners I speak to haven’t ruled out selling. They just haven’t really thought about it either. By the time they do, they’re often on the back foot. So, here’s a better way to look at it: you don’t have to decide when to exit right now. But you do need to start making your business something someone else would want to own. Because even if you don’t know the date yet, the destination is still the same. That journey starts today. Want to take the first step? Get our free quick guide which includes information on exit planning. Written for garage owners, it will help you plan now, not when it’s too late. Jay Wheatley AAE MIMI, business coach and mentor
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