The moment you hand your dealership keys to the next in line is always bittersweet, but without a succession plan in place, it could be a bitter pill for the future owner to swallow. It could also mean not realizing the maximum sale price of your dealership that you have put so much time and effort into.

In many cases, current owner/operators fill many roles and play a huge part in the day-to-day success of a dealership. That value is always going to be taken into account by the acquiring organization. If the plan is to retire or move on to another challenge, they leave a vacuum of leadership and expertise that has to be accounted for by the next owner to be successful.

To maintain success and momentum (read: revenue), succession plans need to outline how key staff will be brought in to fill those gaps. It’s a holistic process that needs to cover every aspect of the dealership as well as the transition itself—and that starts with getting the right managers and leadership in key support positions. When possible, these changes should be tackled early on and prior to the listing of the business because they can pay big dividends when selling the dealership.

Any great plan spells out what will be needed, how to fill these roles, and how they will align with the incoming owner’s goals and strategies. Hiring under duress, without a plan will not result in the value you are looking to achieve. With these tips and the help of a great staffing agency, you can create a plan that will ensure your dealership is ready for anything when it’s time to change ownership.

Put the Right People in Place

Transitions are only as successful as the people you put in place to manage them. They must know your business inside and out, understand the priorities of incoming leadership, and be capable of communicating challenges and new strategies effectively between ownership and staff.

Unfortunately, just because someone is good at their job today doesn’t mean they have the right skill set to navigate these very specific circumstances. They may love working for you and fit that existing role very well, for instance, but might not share the vision of the next owner.

It’s inevitable that people will make difficult decisions about their careers when an era ends. It is incumbent upon owners of dealerships to gain an understanding of the value of each and every person within the business and attempt to know who should stay, who should go, or who should possibly be elevated or reassigned for the betterment of the business. Succession planning (and maximizing your sale of the business) is just as reliant upon this as other factors.

New owners certainly are looking for a dealership with great physical facilities in great locations, great brands, strong market share, and proximity to a strong consumer base among other priorities. Do yourself and don’t forget the “people part”. No matter how strong those other attributes are, people are what drive a business. You will get more for your investment and possibly a lifetime of hard work by ensuring the business is strongly staffed by talent that has meaningful incentives to stay aboard and continue to work at growing the business. New ownership rarely is coming to the table with a truckload of talent waiting to be deployed!

An expert staffing agency with deep connections can be a lifesaver when it comes to finding managers who can deliver a successful transition to a new owner. Establishing a relationship with these industry insiders with succession planning in mind, consulting with them about potential issues and employee needs, and setting aside financial resources are the keys to a successful transition.

Yes, you may be stepping back from the business, but you deserve to see your legacy carry on—for yourself, for your customers, and for the future of the employees who have worked so hard to make it possible, and that’s what a staffing agency is all about.

Evaluate the Business and Anticipate Needs

Whether a dealership is transferring to a family member, friend, or stranger, you’ll need a plan that takes into account as many details of the process as possible. And even if you don’t know who’s going to be taking over your business, there are always fundamentals you can put in place that will make dealership succession as painless as possible when the time comes.

Every plan should include:

● A professional team to help facilitate the sale should include but not be limited to:

○ Business Broker

○ Tax Attorney

○ CPA

● An inventory of assets.

● A review of the existing org chart.

○ Evaluations of in-house personnel (especially management) and how they can best support a transition.

● Partnership with an industry staffing agency to assist prior to, and possibly after, the sale.

These activities are vital for helping incoming leadership understand and appreciate the value of existing processes and reduce disruptions and turnover as a result. Ideally, the staffing agency you hire will be able to coordinate with old and new ownership to find the best possible people to support the trajectory of the business.

Develop a Plan for the Future

When you pass your business on to someone else, the new owner will obviously have plans. However, regardless of who takes over, they will be addressing the same market and consumer trends as everyone else. That means you can anticipate what might be valuable, and by developing these aspects into a working plan you add value and stability to your dealership.

You can structure your succession plan around potential business needs and gauge the readiness of your current dealership to meet those future goals—especially if your dealership is staying in the family or you have a close relationship with the next owner.

A huge chunk of this readiness can be deduced from what’s not present in the org chart. Many of these suggestions will involve digital strategies—an area that promises staggering growth—and commercial sales:

● A Business Development Center (or BDC) is critical for managing and developing leads, setting appointments, and staying ahead of customer concerns.

● Fleet sales and rental organizations or boat clubs still are not all that common at consumer dealerships, but they open the door to large and fairly routine bulk sales to companies.

● Internet sales and marketing departments are no longer optional. They may be present in a general form under other departments, but these days they represent potential revenues that warrant a separate department and management.

● Training departments/coordinators should be assigned their own department, whether you set up a training program or subcontract with specialists.

These are all points that need to be considered by both old and new ownership, and in many cases, they will require hiring new managers and team members. If you’re the outgoing owner, a succession strategy should include an expert staffing agency that already knows the dealership and its culture. These dedicated specialists can be lifesavers for the new owner when they’re making critical hiring decisions.

Make Your Succession a Success with V20

A smooth dealership succession ensures the business will be ready to take on new challenges and minimizes dips in revenue, and V20 Recruiting is the perfect staffing agency to help you manage these obstacles. People are the #1 asset of any business and this holds very true to dealership operations.

Huge recruiters and impersonal digital companies will flood you with oceans of resumes, pushing quantity over quality, and that’s exactly what nobody needs when ownership is changing hands. Our extensive industry connections and decades of experience helping dealerships fill critical management and leadership positions means we can put the right people in place—exactly when you need them most. That’s what makes us the leading staffing agency for succession planning and ownership transitions in the automotive industry.

Reach out today and make this moment a success for your business and your staff. Our office can assist you, or you can directly contact one of our expert recruiters serving your industry.