October 31, 2020  
 
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Selling a Wrecker Dealers Business

Forget about what you read in the paper -- wrecker dealers businesses are being sold everyday and the business-for-sale market is poised for even greater growth in the months ahead.

Business-for-sale markets are less dependent on economic conditions than most sellers think they are.
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A business sale is always a sophisticated transaction and if you aren't prepared for it, your wrecker dealers business sale could have an unexpected outcome. To stay on course, you'll need sound strategy and meticulous execution on your side.

Sale Documents

In a wrecker dealers business sale, the Letter of Intent contains the vital elements of the deal between the buyer and the seller . If you are seeking buyer concessions, the time to address them is before the Letter of Intent is drafted. For sellers, that makes a close review of the Letter of Intent more than a formality - it's a critical juncture on the path to closing.

Valuation Methods

The methods for valuing a wrecker dealers business vary according to your business model and circumstances. However, there are generally three valuation methods appraisers use to determine your company's worth. The income method determines value based on the amount of income the business is expected to generate. The asset method, on the other hand, is based on the value of tangible and non-tangible assets (e.g. brands and trademarks). Finally, the market method determines the worth of your wrecker dealers business based on the sales of similar businesses in your geographic area. A good appraiser will often use multiple valuation methods to arrive at a reasonable estimate. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.

Timing the Market

Now may be the best time to sell a wrecker dealers business. Although the economy is generally struggling, low interest rates make wrecker dealers businesses more attractive to entrepreneurs who want to get in the game. As the interest rates rise, it will be more difficult for buyers to make the numbers work in their favor. So we see market timing as a concern that can be easily mitigated by applying fundamental sales strategies and adequately preparing your company for buyers.

More Exit Planning Articles

Ready to learn more? You may find these additional resources to be of interest.

Marketing a Wrecker Dealers Business

How to Sell a Business

Role of Location In Selling a Business

Selling to Competitors


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