Selling? — Consider Doing it Yourself
By Robert Roman
Selling a car wash can be a challenge, but why hand over hard-earned cash to a business broker or real estate agent when you can do most of the work on your own?
The one obvious advantage of sale-by-owner is to save money. By selling the car wash directly to the buyer, you avoid paying the built-in cost of an agent’s fee. The selling price minus closing costs goes directly to you. This also leaves the seller in a more favorable position to negotiate with buyers.
By dealing directly with the buyer, the seller can also avoid pushy sales tactics. It is often in an agent’s best interest to sell for the highest price in the shortest period of time. This can leave the seller at a disadvantage. When selling on your own, you have as much time as you need to find the right buyer, without the pressure.
If you try to sell on your own, you will need some help. This means procuring an attorney for contracts and disclosures, title company for the closing process, banker to pre-qualify buyers, accountant to prepare financials and address tax strategy, and appraiser or consultant to determine price.
To ensure the business is sold sooner rather than later, the car wash should be put in the best possible light. Showcase it as a solid income business for the new owner. Consider preparing, advertising, and presenting the wash to look and feel like an “investment” and make sure a buyer can easily see the advantages.
Since it is customary to provide an inspection period, the buyer will need access to property and company records. In today’s market, there are few things that will set a car wash further apart from all the others than a good appearance and complete business records. These elements add value and enable an income property to be sold more quickly and at a higher profit.
If the history is incomplete, the seller will be at a disadvantage in justifying the asking price. In this case, the seller would use indirect methods such as water and chemical consumption and invoices to construct a history of business activity.
Another key factor in effectively selling a car wash is the asking price. In this context, the “right” price is
the one that brings the buyer and seller together and results in a sales transaction.
Timing and market conditions can affect price. The quicker you need to sell, the less flexible you can afford to be. If there is ample time, you can wait for that perfect buyer. The rules of supply and demand also apply. If the market is tight, you’re in good shape. If there is a glut of washes for sale in the region, there is some negotiating to be done.
Just as you have a price in mind, so does the buyer. Often, there is a disparity between the two and some negotiating is required. Successful negotiations depend on the accuracy of the information provided by the seller as well as a certain degree of finesse.
Another important aspect of selling is profit. Instead of focusing on price, calculate which deal provides the most cash because individual offers usually represent different “nets.” An offer of $200,000 less than the asking price may net more than a second offer of $100,000 less if the second required you to pay for repairs or the buyers closing costs.
Interviewing the buyer is a critical part of selling. The interview should be conducted on the business premises so a tour of the facility may be performed. Being on-site gives the seller the best opportunity to answer questions about the operation of the business. Of course, before sharing any specific information, the buyer would sign a confidentiality agreement.
Since you cannot place a “for sale” sign in the front yard, you will need to advertise. The most logical place is with the industry publications. It will also pay to advertise online. Currently, 77 percent of buyers of commercial businesses start their search online.
The goal of advertising is to make the buyer curious enough to want to learn more about your business. Don’t include lists of equipment or superlatives. A good classified is direct and to the point. Simply tell buyers what they want to hear: price, location, and income. Ads should mention “sale-by-owner” and whether the price is negotiable or if financing is available.
A brochure can be a good selling tool and rationale for the asking price. A sales brochure would contain photography, surveys, maps, demography, equipment list, financials, and other relevant information buyers need to complete their due diligence.
Selling a car wash on your own is a great deal of responsibility, but with a little determination it can be well worth the effort.
Bob Roman is president of RJR Enterprises — Consulting Services (www.carwashplan.com) and vice president of Bubble Wash Buildings LLC. You can reach Bob via e-mail at email@example.com.