Case Study: Sale of Wick Road Garage
Name of business: Wick Road Garage
Initial Price: £375,000
Sold Price: £310,00, of which £306,000 was paid upon completion and £4,000 after one month handover and training.
Business Details
Wick Road Garage has a very prominent location close to the Bristol City Centre. It is on a large corner plot with lots of traffic passing by. The area is very densely populated and the property could easily be used for residential development in the future. It represented a sound investment and the owners, Andrew and his partner, were looking to retire.
The garage provided a high quality MOT and car repair service and was operated by 2 full time partners and one other member of staff. It had a very large and loyal client base with lots of repeat and referral business. The Owners were willing to offer a handover period if required.
The annual turnover was around £300,000. The property is located on a large corner plot with parking for at least 14 or so vehicles on the forecourt. There is a small office and an MOT bay as well as a separate car repairs bay.
Circumstances of sale
Andrew and his partner were keen on a quick sale, so priced the business competitively, allowing room for negotiation. They wanted to place the business on the market confidentialy to minimise any damage to the business. They wanted a quick transaction and early completion and did not want to continue in the business after a sale.
Client's decision to work with us
Mr Andrew Gunton first approached Zach in October 2015, looking to sell his garage. He had spoken to a few agents, and felt comfortable with Zach’s approach and strategy to sell the business as well as the fees. Having never sold a business before, he was looking for a personal service, which he was getting from Zach.
Solution
Zach firstly spent a couple of hours on site to understand the business. A full market appraisal was done to understand the opportunity fully and to decide a marketing strategy. Our business questionnaire is designed to extract important and comprehensive details of the business including a SWOT analysis to help formulate an effective marketing strategy to maximise the sale price.
We ensured we had all documents available before we went to market, and had undertaken much of the due diligence on the business early on.
We also agreed a marketing memorandum to place on websites and to send to competitors which maintained confidentiality but at the same time was able to attract Buyers. We understood that this opportunity would probably attract a private investor interested in investing in the motor car industry or an acquisition by a competitor. The business was discretely exposed via the Internet using our website www.ets-corporate.com, www.businessesforsale.com and www.daltonsbusiness.com.
The eventual purchaser Mr David Bateson is an accountant and he was looking to purchase a garage with his business partner who had over 5 years experience in managing a garage. He first contacted us in early December 2015 and wanted as much due diligence done as possible before he decided to place an offer. As we charge the purchaser a lock-out fee, which is in effect a non–refundable deposit, we provided him all the necessary information before he committed to an offer. On the 10th March 2016, a deal was struck and David paid the deposit, and the busness was taken off the market. Completion swiftly followed on the 6th May 2016 with our team continuously keeping on top of progress and guiding the matter to conclusion.
Result
Andrew and his partner Raymond Kelly were happy with the time frame to completion and that confidentiality had been maintained. They were happy with the sale price and are now both enjoying a well earned retirement.
Would you like to discuss the sale of your business?
Book your free consultation with the author of this post Zach Dogar.
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