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F I A N C E + O P E R AT I O N S
GETTING DOWN TO (LEAVE THE) BUSINESS What to consider when thinking about selling your shop BY NOAH BROWN
SELLING YOUR BUSINESS, REGARDLESS
of the industry, is always a daunting proposition. Selling a family business can be even more difficult. In addition to sorting out logistics, parting ways with an institution you or a close family member helped to build from the ground up, leaving team members who have been with you for years and sometimes decades, adds even more weight. But sometimes it’s the only move that makes sense. Joe Benza, a former quick lube operator in North Carolina, and Michael Meuret, a former operator in Idaho, had similar paths that led to the sale of their businesses. Both started in quick lube in the ‘90s working for their dads. Both were ambitious, and by the end of the 2000s, they were managing several stores in their own chains. And it was around the same time that both decided to sell. For Benza, who managed six Fast Lube Plus locations with his dad, selling wasn’t really on his mind when FullSpeed Automotive first approached him with an offer in 2018. “We were not for sale, but dad was getting near retirement and we were planning for succession. The offer that was presented to us was a good one and it was one of those ones you don’t say ‘no’ to,” he says. Meuret, whose Einstein’s Oilery chain had reached 12 locations by 2019,
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had been contemplating retirement. Pressed by the pandemic and other personal circumstances around the start of 2020, plus an offer from Valvoline Instant Oil Change, he knew it was the right time. “Good can be good enough,” Meuret says. “We ultimately asked ‘How much more do we need? How much more do we want?’ Our families are the priority.” Though both had different circumstances leading up to their respective deals, both reached the same conclusion: It was time to sell. Initial Negotiations Larger companies looking to acquire your business don’t have a onesize-fits-all approach to starting negotiations. Regardless of the circumstances, though, once the decision is made to sell your business, it’s imperative to have every record in your shop organized and easy to access, down to the last penny. The duration of an acquisition can vary significantly, but three to six months is a fairly normal length of time. During the initial negotiations, buyers will want to do their due diligence and come up with an estimated value of your business. Benza says it’s common for sale prices to be based on your business’ EBITDA, which is a metric that measures a company’s cash flow based on earnings before
interest, taxes, depreciation and amortization, though that’s not the only metric used. In that time, the buyer will usually submit an intent-to-purchase document. That doesn’t lock the buyer or seller into the deal, but Benza says it gets the ball rolling. Once that’s done, the buyer and seller will submit an asset sale agreement. “You should have an attorney, a very experienced business acquisitions attorney, reviewing those documents. There’s a lot of conditions on a sale and a lot of liability that carries after a sale that you have to be aware of, and you need an attorney to vet those documents,” Meuret says. Employees News of a business possibly being sold can affect how employees and customers handle day-to-day operations. Even though the owner is looking to move on to a different opportunity, employees and customers are still reliant on that business. If word gets out before a sale is finalized, it can be a detriment to both employee morale and overall sales. For Benza, who wasn’t actively trying to sell his business before FullSpeed came with the offer and maybe would have kept the business if the sale fell through, word that the owners were looking to get out could have had a negative impact. Meuret says it was a tough balance pushing forward through the sale while also making sure that his employees were treated fairly and didn’t feel like “the rug was being pulled out from under them.” “Our people were the biggest part of our success, and it was extremely important to us that they were treated well in the transition,” he says. “You
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