How to sell a car wash business in Australia
Selling a car wash business is one of the most important decisions you will likely make as a business owner, one that will make a significant impact on your financial future, but before you begin the process to sell your car wash business, It is worth having a well-defined exit strategy in place for when you’re ready to start advertising your car wash business for sale.
Whether you are looking to sell an old carwash business or sell a modern new car wash business, no matter what your circumstances are, there are steps you can take that will assist in making the process run more smoothly, and with the right advise more profitable for you as a business owner.
Call in the professionals
ABBA Group are the experts when it comes to buying and selling businesses and understand how to sell a car wash in Australia. Having a business broker by your side will allow you to be accustomed to critical information about certain aspects of the selling process and make the experience smoother and less stressful.
Businesses brokers such as the team at ABBA Group will assist you with preparing your business for sale right through to signing the final sales agreement.
Timing is key
It is prudent that you start preparing to sell your business as soon as you decide that it is time to move on. Selling a business can often be a lengthy and complex process, often taking six months or longer. Therefore, unless you are fortunate enough to have a reliable friend or family member prepared to take over, the sooner you begin proceedings, the better.
Have a car wash business valued
Car wash business valuations are usually valued by multiples of gross yearly returns, EBITDA, or for businesses with larger than average profitability, the business’s reputation or goodwill will be a factor as well. Car washes that have been running for some time with a good return rate, therefore, are generally valued by means of the capitalised excess earnings method, which takes into account goodwill as well as physical assets such as properties and equipment.
For newer car washes, particularly those rapidly gaining momentum, discounted cash flow may be a successful tool, as you can reveal the value of a business to potential buyers based on your earnings forecast and risk assessment.
The most profitable option for your particular business will be best established by your business broker or other business valuation professional.
Make your business stand out and get buyers excited
Once you have decided to sell and are starting to prepare for sale, you will need to examine your business objectively and select what assets to highlight and what flaws need fixing – without spending more than you can recover from a higher asking price.
It is a good idea to put yourself in the shoes of a prospective buyer visiting your business. Is there any machinery that needs fixing or replacing – and is it worth the expenditure when considering the possible influence on the buyer’s perception? Could you find a less expensive chemical supplier? Are your books in order and is all paperwork neat and ready to access? A genuine and serious buyer will want access to appropriate information without unwarranted delay. Good bookkeeping is frequently overlooked in the car wash industry, however, legible and accurate paperwork is essential, as you will likely have a hard time selling your business with an asking price based on vague financials.
Installing a water reclaiming system if you don’t already have one can boost your eco-credentials and reduce water bills, but more importantly and from a customer point of view, is your car wash as clean and neat as can rationally be anticipated? Washing or changing dirty or aging signage is another low-cost way to improve curb appeal and increase the sales price of your car wash business.
To receive the best buying price possible, your car wash business has to be well-organized and run smoothly. Most importantly, you need to ensure the transaction process is easy for the buyer.
Spreading the word
You are finally ready to start getting the word out that you are moving on. However, unlike how you would advertise selling a house, you will want to advertise your business discreetly and without too much elaboration. This is to avoid your regular customers discovering you are moving on and doubting your commitment to delivering outstanding service.
Let your business run itself
Buyers will often look for a business which is able to run itself, as this is one of the best types of business to purchase. Once your business is able to function efficiently even when you’re not around, you are on the right track to a successful sale.
Luckily, the car wash industry model is moderately straightforward and car washes flourish within a bustling location, competitive prices and capable, thorough employees (and equipment), rather than the owners’ charm.
Therefore, it is a good idea to take a step back and encourage your managers to take on the more mundane tasks to display to the buyer that the business can prosper without you.
You can also reassure the buyer that they will be able to continue your success by detailing the processes involved – such as maintenance timetables, the employee roster system, point-of-sale, how to order stock and so on.
A few ways to find buyers for your car wash are:
· Buying an ad in the local newspaper or in a trade publication.
· If you are happy to disclose to your employees you are selling, you may find a potential buyer within the business – i.e, an employee might wish to buy you out. You can also approach business contacts or even friends or family members.
· Through a professional business broker agency, such as: www.abbacarwashsales.com.au
· When selling through ABBA Group, we will advertise your business thoroughly across a vast network of overseas and local business sales websites.
This includes:
- 17 Local/Australian business for sale listing websites
- 28 Overseas business for sale listing websites
- ABBA Group’s established buyer-database of business professionals, high level corporates and investors.
If your business isn’t listed on ALL of these platforms, you are effectively leaving money on the table and seriously limiting your reach by upwards of 50%
ABBA Group’s extensive listing process ensures your business is part of a global network of active buyers looking to immediately purchase car wash businesses in Australia.
