As a dealership owner, you're probably always looking for ways to improve your business and increase profits. You might consider increasing your marketing budget. You might mix up the type and age of vehicles you have on your lot. You might cut some vendor contracts to shave expenses. You could even change your location if you wanted to “go big.”
But have you considered the impact your team has on the value of your dealership? Having the right team in place can be the difference between a good price and a great price when it comes time to sell. In fact, the team you have in place is more important to the overall value of your dealership than anything else.
Strong teams carry the DNA of the dealership.
The DNA of your dealership is a combination of:
• your personal values
• your definition of “success” in business
• your beliefs about dealership best practices
• an understanding of what works in your specific context
The DNA of your dealership or group was most likely developed over time – probably with a lot of trial and error – and now it defines your business as a whole.
Over time, your dealership teams learn to live and breathe this DNA. They pass it on to new team members through training and reinforcement. This means that your team is uniquely suited to capitalize on your local market.
When it comes time for you to sell, a buyer can rest easy knowing that your experienced team will carry forward the success of the dealership. Your team’s experience, established systems, and knowledge of the local market create a valuable bridge for potential buyers.
This also opens your dealership up to more potential buyers – buyers who are not from the local area. And more potential buyers is always a good thing for a seller. Out-of-area buyers may not know the magic of succeeding in your market, but your team does.
If you’ve built a successful team that would be willing to stay on under new ownership, you’ve got an attractive opportunity for a broad array of buyers.
Strong teams create strong CSI/SSI scores.
CSI (Customer Satisfaction Index) and SSI (Service Satisfaction Index) scores are critical to establishing and proving value. An experienced team implements the dealership's proven systems over time, ensuring strong CSI/SSI scores. These scores prove that your store is succeeding in the local market. When potential buyers see these scores, they know they're set up for success.
But it's not only about the potential buyer. Your team also provides tangible benefits to you as the current owner. Having an experienced team with strong systems in place means your business is less reliant on you personally. You can take time away from the business without worrying about it faltering in your absence.
Strong teams protect present and future performance.
Depth on your team protects your dealership’s present and future performance. For instance, employee absences and losses are an inevitable short-term reality. A solid “bench” gives you the ability to cover employee absences seamlessly. This means you can provide quality service to your customers every single day.
For mid-term planning, a good bench allows you to cover employee losses as regular turnover occurs. Operations can slide quickly if a key position remains open for too long while you search for a replacement. Constantly preparing current employees for future roles will protect your ongoing success.
In the long-term, when it comes time to sell, having a strong bench of employees provides a buyer with security and confidence about their ability to succeed with their new acquisition. This is particularly valuable to buyers in a tight labor market.
Without a solid bench you’ll find it very difficult to grow at any stage of your business. That will inevitably be reflected in your dealership's value when it's time to sell.
Bonus: Growing Value through Growing Your Group
With a strong bench of employees, you also have the ability to acquire new stores because you have people you can put in place to run the new dealership. This allows you to grow your group in the years leading up to your retirement, which ultimately increases the value of what you have to sell.
Having the right team in place can significantly impact the value of your dealership. Good people and processes can overcome almost any shortcoming your dealership may have in terms of “perceived value.” A strong team can carry forward the success of your dealership, ensure strong CSI/SSI scores, and protect your dealership’s present and future performance.
When it comes time to sell your dealership, you want to ensure that you get the best possible price. By creating a strong team, you’ll not only ensure the success of your dealership in the present, but you’ll create an asset you can sell for a premium in the future.
Your people are the heart and soul of your dealership. Invest in them, and you’ll be investing in the future valuation of your business.
