Auto Repair Shops Finance

The majority of challenges and frustrations experienced by sellers can be avoided with solid information about the pitfalls of selling a business in today’s market. While there are dozens of challenges to overcome, here are the first five of 10 of the most common mistakes that can have drastic repercussions and cause both stress and loss of value on a business sale.

Here’s where a lot of shops get into trouble. They’ll tell themselves that their businesses are doing well, and all they want to do is “fine-tune” their operations rather than grow.

Owners of closely held businesses, including family owned and other small businesses, can now pass assets to heirs with minimal taxation thanks to a recent tax court ruling (Wandry v. Commissioner, U.S. Tax Court, March 26, 2012).

As with any compensation program, the first thing you’ll need to do is conclude what you want to accomplish with any change in employee behavior. Where most shop owners get into trouble is they’ll immediately say they want to see higher sales when it comes to their service advisors. So they’ll put their advisors on a commission program that’s based on sales, and as you can imagine, their sales typically go up. Unfortunately, so do their expenses and customer complaints.

Not long ago, I had the opportunity to interview Hal Janke. He is recognized by the top business brokers in America as an auto industry expert, he has owned and operated auto repair businesses, he has spoken at many conventions, and in selling over two hundred shops; he has sold more auto repair facilities than any other broker in the country.

Spring is a great time to clean out that growing mountain of financial papers and tax documents that clutters your home and office. Here’s what you need to keep and what you can throw out without fearing the wrath of the IRS.

There’s no doubt that pricing is one of the most misunderstood elements of business. There’s not only a lot of bad information out there, but with these tough economic times, there’s a lot of uncertainty, as well.

One of the biggest hurdles you’ll face in running your own business is staying on top of your numerous obligations to federal, state and local tax agencies. Tax codes seem to be in a constant state of flux, making the Internal Revenue Code barely understandable to most people.

A recent report from Lang Marketing Resources Inc. reported that in spite of the economic climate, service stations, independent garages, repair specialists and foreign car specialists generated about 2.6 billion more in service revenue in the U.S. car and light truck aftermarket in 2011 vs. 2010. This revenue increase is coming primarily from the Do It For Me (DIFM) sector. In striking contrast, the same report projects that new car dealerships will lose more than $750 million in service market products. Service stations and independent garages now account for 29 percent of the total aftermarket DIFM market.

With the current economic conditions, the collection of accounts receivables is becoming more and more of a challenge. Strengthening your collection procedures may allow you to improve collection rates and shorten the aging days of your accounts receivables.

As every shop owner knows, both money-making opportunities and unexpected situations present themselves on a regular basis. A deal to buy a new sign for your shop, a chance to buy inventory at a discount or forging ahead with an equipment upgrade are all ways to grow and develop your business.

When I was still in the auto repair business, I learned an invaluable secret from a remarkable man named Sol Price. For those of you not familiar with the name, he was the founder of Price Club; the company known today as Costco. Sol was able to take himself out of the price comparison game, and the way he did it was by making sure that every appliance he sold was unique to Price Club.