The Exit Strategy
The Vaughn Law Group is committed to working with dealer principal owners on developing and executing a specific exit strategy – one that maximizes the business investment and delivers on the dealer principal’s personal goals.
The Vaughn Law Group will initially discuss with the dealer owner his or her personal reasons for preparing to exit the business while taking into consideration the owner’s mental and financial readiness for that exit. VLG will work with each dealer principal to explore and navigate the full range of options available before developing a specific exit strategy. VLG believes a successful exit strategy must reflect the dealer owner’s true goals. It is important for every dealer principal to understand and accept that the exit process is just that- a “process” – and getting it right the first time is critical.
The Vaughn Law Group has developed an organized process that will maximize the certainty of outcome while being the least disruptive to the on-going business of the dealership.
Frequently Asked Questions
Confidentiality: How do you avoid information regarding a merger and acquisition deal leaking out to the market?
Answer: There is no question that a breach of confidentiality can cause enormous trouble to the seller and the seller’s business. The Vaughn Law Group takes this subject very seriously by drafting very specific language within our confidentiality agreements and we “manage” the information disclosure process quite closely with the seller to minimize disclosure risks.
Time Table: How long will it take to sell my business?
Answer: Every dealership is different. Factors to consider include condition of the business (both internally and externally), efforts needed to prepare the business for sale, timing, economic factors, and locating qualified buyers, etc. Every transaction has its own pace, which is affected by pre-transaction preparation, actual transaction process and post transaction follow up. An average time frame is between 6-12 months, however, some dealerships may take longer.
Valuation: How much is my business really worth?
Answer: The valuation stage is significantly more eventful for the seller. The key issue here concerns the seller’s expectations and whether those expectations are realistic. For example, occasionally I will hear from a seller who will say that a dealer principal friend sold their business at a seemingly staggering price. These stories often are distorted and inflated. I believe in using a qualified unbiased outside source to perform the business valuation by applying at least four different valuation methods. Business valuations are not an exact science; however, I have found that an accurate range can be obtained by using different valuation methods.
Qualified Buyers: How will you locate a qualified buyer?
Answer: Before we even approach locating qualified buyers VLG will take the time to become totally immersed in understanding the owner’s business, goals and objectives, as well as the owner’s human concerns. Depending on the situation, we may suggest to the owner other alternatives to a third party sale such as recapitalization, joint venture, employee stock ownership plan (ESOP), etc. However, should the seller want to sell the business outright, we have an extensive compilation of strategic, corporate and financial buyers.
What Specifically will be the role of the Vaughn Law Group in selling my business?
Answer: The Vaughn Law Group will assist the dealer principal with strategic business and legal guidance in preparing the business for sale, developing a disciplined M&A process, locating potential qualified buyers and “quarterbacking” the entire process to successfully move it along towards the completion date.