This illustration is meant to bring to your knowledge; certain factors that can help determine the worth of dealerships near you and far away too. So here, are the values the same, for two Hyundai automobile dealerships, each dealing out 500 units of automobiles annually and earn a net sum of $500K annually? You’ll be able to make out your own answers after we go through the various factors: Location: In a scenario where one dealership is in Florida and the other is in Colorado, meanwhile you live in Los Angeles- are the market values still the same? Planning Volume: Where one dealership plans for a volume of 1000 and the other is 500- are the market values still the same? Used Vehicle: When one automobile dealership sells about 300 automobiles to hit the said $500K annually meanwhile the other sells 800 to make up the $500K- are the market values still the same? Earnings Continuity: When one of the automobile dealerships earned $300K last year and $500K this year, the other did $800K last year and $500K this year- are the market values still the same? Real Property and Facility: There is in most situations a rent on the property and facilities housing the automobiles; where the rent varies massively for both dealerships are the market values still the same? Cost of Marketing: Did the dealerships require an extra hand in getting their automobiles to potential customers; like via adverts and marketing generally? So when one automobile dealership spends more on adverts over a year than the other and still yield same revenue, are the market values still the same? Degree of Competitiveness: Are Hyundai vehicles in higher demand in Colorado than California? Probably because of traffic differences? Are the Hyundai automobiles in a single point market? So, are the market values still the same? Management: When one dealership has a better management team than the other, are the market values still the same?
So what is the true market value of your dealership? Deciding to learn about the true market value of your dealership would usually push you into contacting your Certified Public Accountant (CPA) who would, in most times than not advise you to appraise your dealership by ordering an appraisal. It takes three major methods or thereabouts to implement a settlement through the use of an appraisal. They are: Cost/ asset based approach, income based approach and the market approach. Usually, the cost/asset approach overlooks the magnanimous asset aspect of your dealership; hence the income and market approaches are the most suitable appraisal settlement approaches. The Income Approach: Here the a deal is made on the dealership based on its tendency to generate income over time. The calculation in this method will include a multiple factor and a cash flow system. In a situation where your dealership is rather losing money than generating income, there’s no cause for worry because dealerships losing money can still be worth a market value of millions; just based on how the true market value is organized. The Market Approach: The market approach of settling with an appraisal bases emphasis on third-party verifiable transactions; requiring large national data bank for transactions. The greater chunks of the transactions are not made public. Hence, due to your appraiser, your dealership will delve into direct comparison with similar dealerships that are traded publicly while neglecting the characteristics which may add a hidden value to your dealership. These characteristics can be location of dealership, buyers’ demand of your dealership, competition, marketability, market size, synergy, geography and the likes. Imagine when your dealership is presented to a buyer with all these unique characteristics,”yea” the buyer will pay more.
The most successful automobile dealership brokerage & consultant firm That’s a powerful statement... and that’s the kind of power you’ll put into action when you enlist our services. We’re familiar with every detail of facilitating, negotiating and consummating a sale. “We recognize that the sell of your dealership or group is a life changing event”
WANT TO KNOW WHAT YOUR AUTOMOBILE DEALERSHIP IS REALLY WORTH?
Your dealership could be worth more than you think; probably by 50% or a lot more. There are a thousand of automobile dealerships for sale out there, despite looking similar in the basic dealership services they render; there are not any two automobile dealerships similar in their true market value; you may find yourself paying up almost a 100% more for an automobile dealership which could cost 50% less than its original price in another dealership. You may call it realistic market value, true market value or even fair market value, but the bottom line is with this tool you can now literally put a market value on your dealership or more accurately, a true and realistic market value. Every dealer who has got an automobile to deal in usually has a mental evaluation of the market values of their automobile dealership but the market value tool is proving that in most cases, those market values tend to be some percentage off the real market value, both negatively and positively. It has been found that most automobile dealers tend to overate or underrate the true market values of their dealership without the market value tool. There a few situations where you will want to know exactly what the market value of your dealership is rather than a value achieved by your gut. Some of these situations are: For the sake of mere knowledge of your dealership market value In the event of settlements When acquiring insurances For partnership sakes When planning for a tax-free giving When purchasing a dealership When dissolving forged partnerships When forging partnerships Do not miss the chance to get the best deals you can get by guessing what the market value of your dealerships is.
OUR HISTORY AND PROFILE
Hern and Associates was founded in 2009 with the aim of catering and rendering professional business brokerage, business valuations, and intermediary services. Hern and Associates has a really viable automotive division with a large ever- growing list of satisfied customers for clients. We have a wealth of experience and team of well-trained auto dealer brokers to call upon as we set out to carry out our automobile dealership brokerage for you. Our services are rendered on a national scale with our offices in……… Hern and Associates is on hand as a reliable provider of one of the best dealership brokerage services, with the goal of ensuring every client that signs up with us gives the nod of satisfaction as we serve them.
STRATEGIES FOR SUCCESS:
You may want to know what broker dealers do; well, the term broker-dealer in simple terms is one hired to makes deals for others. In a more detailed explanation, a brokerage poses as a broker (or agent) in situations when it executes orders for its clients, whereas when it trades for its own account it poses as a dealer or principal this time. We boast a team of highly trained dealer brokers and dealers in securities because we realize this is the basis to rendering a near perfect dealership brokerage to our customers. Our brokerage team showcases a good mix of youth, veterans, experience and brilliance. We build the foundation for our good services from our strict adherence to the virtues of honesty, integrity and the high regards in which we hold professional ethics as we broker your dealership. We make it a habit to be found at charity events and the likes because any good individual or firm looks for a way to give back to the society. We always look to establish and maintain healthy referral relationships with the other automotive industry professionals out there including certified public accountants, attorneys, tax strategists, financial institutions and dealership application experts. Essentially we do not stop at bettering your dealership till you say you are satisfied. Now, that’s what our dealership brokerage is about. So hit us up and let us get started on brokering your deal and you will spot the difference!
UNDERPERFORMING AUTOMOTIVE DEALERSHIP
Automotive dealerships is a sort of dealership or business that helps buyers get a deal for any automobile they have interest in which is available in stock; these autos could be used or new. That is what a well-functioning automotive dealership should be about; making customer good deals while incurring their revenue. On the contrary, there are cases where underperforming automotive dealerships exist and the major consequences of being an underperforming automotive dealership is losing of clients and customers. The major events that lead up to tagging an automotive dealership as an underperforming automotive dealership are obviously when they do not serve their customers well by mostly not giving them good enough deals in terms of dealership cost and security.
Online Presence Is Key These Days
Another major reason automotive dealerships could underperform is when they begin to lose clients due to lack of marketing despite doing everything right. Digital marketing is no more just a thing of flair; it is now a vital part of growing a business. While it might seem an easy task to capture local customers via ordinary marketing means, it is highly unlikely that remote customers will know of your dealership and want to patronize it because you have no online presence. A well-planned out online presence could mean that you have your showroom on the internet without having to move things around; just pictures and well laid out descriptions of the stock in the inventory will help you create an online showroom.
Failure To Measure Your Success
If you want a chance at improvement in anything you do, then you must create a means of measuring your success and failures and there is no better way to measure your success online than to allow your customers a chance to leave reviews right there on your online profile or site. This factor will generally push any automotive dealership to always attempt to render satisfactory services because they can now measure the volume of their success and failure. Not engaging in this could gradually lead to an underperforming automotive dealership
Keep In Touch With Customers
One major way of growing your automotive dealership is by converting customers to clients. No matter how it may seem that you get new customers everyday always move to keep your old customers and turn them into loyal clients, because there will definitely come a time when the fresh customer list will dry up and unless you have clients, you could be driven out of business. The most effective way to turn mere customers to loyal clients is by keeping in touch; show the humane side to your dealership. Do not always attempt to push a sale through all the time, but send them useful automobile newsletters that can help them in anyway. And shouting out customers on special events like birthdays will endear your dealership forever in the heart of your customer. There, those are just a few ways to manage an underperforming automotive dealership. Remember it is your business not the customers’ work for it.