Succession Planning…Why It's Important & Where to Start

Succession Planning

It's not something you necessarily want to think about...but it is something you should think about.  There will come a day when you no longer want, or are able to run your dealership.  Who will take over?  How do you protect all the value you have created?  What are the opportunities to do this better?  What are the pitfalls?  Those are hard questions but with some planning and thought all those questions can be answered and a smooth succession of your business can take place.

So why do you need a succession plan?  Many reasons:

  • The auto industry is unique - We love this business and many of us stay in it well after most people retire, so the auto industry has its fair share of owners who are in their 60's & 70's.  
  • Manufacturers are asking - Even if succession planning is the furthest thought from your mind, it's not far from manufacturers minds.  If you'd like to expand, manufacturers may want to know what your succession plan is before they approve it.  In fact GM is sitting down with each of their dealers this year to ask about succession planning.
  • Preserve business continuity - Your customers and employess count on you and you want to keep them.  By having a succession plan you can minimize the turmoil a change can have.  It will help you keep your key employees including the General Manager and that in turn will help keep your customers coming through the door and getting the service they expect.
  • Protecting your investment - You have worked hard to build your dealership(s) into a successful small business, you don't want to see that get eaten up with fees & settlement costs that can be a part of transferring a business without a succession plan.
  • The unexpected can happen - If you have already planned for your succession should something expected happen...a sudden illness, caring for a family member, etc.....you are ready.  

How do you do it?  By thinking through the critical questions:

  • Who will take over
  • When will they take over
  • How should they be trained
  • What tax planning needs to happen

Here are some great articles on the how and why of small business succession planning and some that relate specifically to the automotive industry:

5 Steps to Create a Viable Business Succession Plan - Forbes

Planning Ahead is Key to Keeping Business in the Family - Automotive News

GM: Get Succession Plans Set - Automotive News

Plan Your Exit - Small Business Administration

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At GW Marketing Services we have 35 years of knowledge and expertise in dealership brokerage and business appraisal services and have critical professional relationships with dozens of automotive industry vendors and business partners including CPA and law firms, turnaround and aftermarket specialists, and other strategic industry vendors to help clients with all of their needs.

Get in touch with Gordon Wisbach to discuss the future of your dealership(s)

 

 

 

 

 

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car dealer
automobile dealerships