Auto glass repair companies are in relatively high demand. If you are considering selling your auto glass repair company, then now may be an excellent time to do so. This guide helps you determine your value and provides insights into the sales process.
About The Auto Glass Repair Industry
There are approximately 15,000 auto glass repair and replacement companies in the United States. In addition to repair and replacement services for auto glass, many companies within the industry also offer window tinting services. Companies generally provide services for all vehicle types, from two-door sports cars to commercial and public transit vehicles. There is always excellent demand, but there is no shortage of competitors within the industry either.
How a Business Broker Can Determine Your Company’s Fair Market Value (FMV)
Your business broker will review your financial information, industry multiples, and intrinsic value to determine your company’s fair market value (FMV). Your location, unique competitive advantage (i.e. you offer a unique service), and your reason for selling play a major role as well. The acquisition multiples within the auto glass repair and replacement industry include:
- Auto glass repair companies sold between 1.61 and 2.94 times the Seller’s Discretionary Earnings (SDE)
- Auto glass repair companies sold for approximately 2.26 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Auto glass repair companies sold between 0.22 and 0.52 times the annual net sales
The higher the SDE the higher the multiple (generally speaking) for the auto glass repair and replacement industry. Companies that provide unique services such as construction equipment, buses, tractor-trailers, etc. also enjoy higher valuations (Business Reference Guide). On the contrary, the valuation is generally lower for companies that rely heavily upon insurance providers for revenue.
How to Sell Your Auto Glass Repair Company With a Business Broker
The sales process is different for sellers. It is important to work with a business broker to personalize your experience. There are common steps, however, and it can help you prepare and ease any anxieties about the sales process by understanding the general steps involved. Notably, this process includes:
- Determine your company’s value
- Plan and prepare for the sale
- Market your company in a confidential manner
- Complete the due diligence process
- Close the sale and transfer the business
To provide you with more information so that you can make informed decisions about your exit strategy, here is a general overview of each step.
Step 1: Determine Your Company’s Value
As discussed, your company’s value is incredibly important to determine. This information determines when and for how much you sell. Therefore, the first step in the sales process should always be to receive a market-based valuation. In fact, it is recommended that all business owners, regardless of their long-term plans, receive a valuation to understand their company’s worth.
Step 2: Plan and Prepare for The Sale
If you are happy with your valuation and decide to sell your auto glass repair company, then the next step is to plan and prepare. This involves setting your sale goals, such as your asking price and what you find important in a buyer. You will also need to prepare documents that may be needed while marketing, negotiating, or completing the due diligence process. These documents include but are not limited to:
- Tax returns
- P&L statements
- Balance sheets
- Employee lists
- Equipment lists
- Insurance information
- Lease information
Step 3: Market Your Company in a Confidential Manner
Selling an auto glass repair company is much different than many owners anticipate. You are not taking out public ads or relying upon word-of-mouth advertising. Instead, you are finding a buyer in the most private manner possible — the opposite of a traditional marketing approach. This is to ensure news of a possible company sale does not disrupt business operations. Due to the complexities of this stage in the sale, your business broker should handle the process on your behalf, keeping you informed and involved throughout the process. This stage should end with the signing of a letter of intent (LOI) by the buyer you feel is best.
Step 4: Complete The Due Diligence Process
The due diligence process is the opportunity provided to the buyer to review all financial, legal, and operational details about your auto glass repair company before they officially sign the purchase agreement and make the payment. During this stage, your job as the seller is to provide them with the documents they need in a timely manner, answer questions, and allow them a close look at normal business operations (If requested). However, this process should still follow a structured timeline to avoid setbacks and to reduce the risk of a deal falling through.
Step 5: Close The Sale and Transfer The Business
The last step in selling your auto glass repair company is closing the sale. This final stage involves attaining final signatures, transferring ownership of the company, and receiving the purchase payment. Your attorney (and the buyer’s attorney) may attend the closing as well to ensure all goes smoothly and to conduct one final review of the purchase agreement (and other important documents).
Receive a Free Business Valuation From Sigma Mergers and Acquisitions
The sales process begins with a business valuation. This allows you to determine how much prospective buyers are willing to pay for your auto glass repair company. If you would like a free, no-obligation business valuation, schedule a consultation with us today.
Scot Cockroft is the Owner & President of the #1 ranked Business Brokerage, Business sales and M&A firm in Texas. Scot has been named Named Deal Maker of the Year by Dallas Business Journal.
He is committed to a “different” type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two.
Feel free to reach out!