The 6 key steps to a successful garage transfer

If « retirement » is the first word that comes to mind when you are asked about your plans in five years' time, then it may be time to think about selling your business ! This is a difficult task, because the hectic but exciting day-to-day running of your car repair shop is taking up all your attention. But the mark of great entrepreneurs is precisely that they are always one or more steps ahead. It is not a question of looking for your successor at the moment, although this question will also arise very quickly, but of listing all the key steps for a successful garage handover.. Between valuing your business, managing the change internally and defining your role in the future scheme, there is no shortage of formalities to complete. Find out all our advice on how to approach your future new life with peace of mind.

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#1 Anticipate: the change is now

The transfer of a business such as a car garage requires above all anticipation, as it is prepared years before the fateful date. Any good leader knows how to make the right decisions at the right time. But even the best leaders put off certain steps until tomorrow, which means leaving the workshop. Even if you are looking forward to a more relaxed life and perhaps more attention to your family and friends, you can't imagine not coming to the garage any more. That's why change is coming, not only for your employees, but also for you.

Specialists estimate that it takes about 5 years for a well-orchestrated and successful handover. Organising the handover is a complex operation that can cause stress within your teams of mechanics, but also cause you a few sleepless nights. It is essential not to neglect any aspect of the subject.

Finally, ask yourself the right questions and put your cards on the table with yourself. When and why do you want to sell your car garage ? How do you imagine this transfer and who would be the ideal candidate ?

Your garage is the fruit of a lot of hard work and sacrifice, so don't leave with the regret of being robbed of this step. Remember that a successful transfer almost certainly guarantees you a peaceful retirement.

#2 Choose the accompaniment that suits you

Don't consider coaching as an option, but rather as an asset. The process is long and sometimes requires specialised skills in many areas, particularly in the financial and legal areas. Bankers, lawyers or accountants can help you with the more technical aspects.

If not, why not benefit from the assistance of experts experienced in this exercise ? Many networks can help you and remove your doubts.

The website of the Ministry of the Economy, Finance and Recovery is a mine of information to be consulted before anything else. Their many explanatory articles are an excellent basis for discovering the subject. Institutional players also include the CCI and CMA, which offer very comprehensive guides. The Bpifrance website also deals with the subject of divestment in a comprehensive manner.

A number of support networks finally exist to help you in this important stage of your professional life, such as the Initiative France network or The Entrepreneurship network.

In 2008, the Conseil National des Professions de l'Automobile (CNPA) launched a vast programme of support for garage owners wishing to prepare the takeover of their repair business. This led to the creation of the website My Company Auto on which it is possible to get in touch with numerous experts specialising in law, taxation or accounting.

#3 Set the transmission mode for your garage

The question is delicate and each solution will have to be studied taking into account the advantages and disadvantages, particularly from a fiscal point of view.

Transfer to a family member

This method of transfer is perfectly possible. It is reassuring, because it allows the company to be kept under control, but it also has its limits. It is difficult for the new owner of the garage to feel free if the patriarch is constantly keeping an eye, albeit a benevolent one, on the business ! Moreover, if you were planning to close this chapter of your life once and for all, you'll have to ignore a number of elements at family dinners !

More seriously, taxes and costs related to the estate should be studied carefully. You can opt for :

• the gift, which however deprives you of the income you could have earned from the sale ;
• the shared donation between all the heirs ;
• The sale.

There are many schemes to support these operations, such as the TEPA law, to gradually bequeath shares in the company to your descendants, but also the DUTREIL pact, which allows a tax deduction, subject to compliance with a certain number of conditions.

Finally, depending on the case, the gift tax is reduced by half if the gift is made before the entrepreneur's 70th birthday. Also bear in mind that any actions you take must preserve equality between heirs. 

Assignment to an employee

According to the website Les Echos Entrepreneurs, around 6% of the managers of small and medium-sized companies sell their company to one or more employees. The Hamon law has moreover introduced since 2014 the obligation to inform employees in the event of the sale of the company. A comprehensive guide explains all the arrangements to be put in place.

We talked about anticipation above and this case is a perfect example. Your workshop manager has recently told you that he intends to succeed you ? You need to give him time to put together his file and gather all the funds.

Transferring to an employee often means selling for less than to an outside buyer. But garage owners who have passed on their company in this way are unanimous: what is most important in this case is the seriousness of the candidate, the vitality of the project and the well-being of the company and its staff. Because yes, after you, not the deluge, but a new adventure.

#4 Determine the value of your property

Another essential step is to define the value of your business. To do this, you need to have your garage valued to then determine its selling price. The elements taken into account for this calculation are :

• real estate ;
• machinery and equipment (lifts, diagnostic benches, fault detection software, etc.) ;
• your customer file ;
• your employees and their skills,
• Your prospects for development.

The diagnosis of a company cannot be established alone, rely on the expertise of the professionals who accompany you. Several approaches are possible, the so-called patrimonial approach (valuation of the company's assets) or the profitability approach. Neutrality is essential, otherwise you run the risk of overvaluing your property and repelling potential buyers.

The CNPA, which we mentioned earlier, can also provide you with experts who are perfectly familiar with the car repair sector and all its specificities.

The setting of the selling price takes into account the value of your business, but also the reality of the market. In the end, the law of supply and demand will have the last word.

#5 Lead the change

Driving within the company

Leading change is essential in the case of the transfer of an automotive repair business. More than ever, you need to be a driving force, a locomotive. Why not take advantage of this to upgrade the skills of some of your mechanics and employees ? Whether through in-house training or via specialised organisations, you involve your employees in a rewarding and positive way in the process. In addition, you increase the value of your property through the acquisition of new know-how

Don't be stingy with your communication and explain your choices well. A car garage is a family business, and emotional ties are very much present. Your personality influences the general atmosphere of the workshop, so it is normal that the prospect of a new boss will worry your teams.

The preparation of the buyer

Whether a family member or a close associate, the buyer will need time to prepare to take over your car repair business. Time to raise the necessary funds, but also time to learn how to run a garage. Your involvement and goodwill will be invaluable to the candidate for your succession.

Leading change requires you to involve them in the decisions made for the smooth running of the business and gradually give way. Employees and mechanics need to get used to seeing a new person at the helm, appreciate a new style of management while remembering that you are still the boss !

This transfer of business must above all be placed under the sign of dialogue and exchange; its success depends on it.

#6 Plan for the future

Retirement may be an undeniable social victory, but it is one of the most stressful events in a senior's life.

Socially, you become a pensioner and are no longer the head of an independent or manufacturer-approved garage. Beyond the blow of old age this inflicts, some people feel like they are nothing and struggle to find their bearings. You can, however, devote yourself to new activities, practise an artistic or physical activity, do voluntary work... On paper it is exhilarating, but building a new social life does not come naturally.

Financially, you should normally benefit from the gains from the transfer. However, don't wait until the few years left before you leave to invest your savings and think about your old age. The income of a self-employed business owner drops by around 60 to 70%. A supplementary pension should be prepared from the start of your working life.

Secondary education

Psychologically finally, you will have to relearn how to live with your loved ones and in particular with your spouse, in addition to « mourning » your business.

Image sources:
Marie CHASLES / Author: Lasantili / License ID: #51940575 - stock.adobe.com