How to Get Top Dollar for Your Business: A Dealer’s Story
Better managing the “killer” of companies – payroll expenses – helped Mike Upton boost his dealership’s bottom line.
Thanks to a stronger balance sheet, he was able to sell his business at the right price when an unexpected offer came along. He credits a Dealer Strategic Planning (DSP) 20 Group for helping him get top dollar for his four Mississippi tire stores.
In the last couple of years, six DSP20 Group dealers have been approached by companies offering top dollar for their businesses. None were interested in selling, but the offers got their attention. The six decided to sell. The common denominator for all was membership in founder and owner Norm Gaither’s 20 Group.
Says Upton, “I was asked by my 20 Group how I managed to get my business in order, and the thought that immediately came to mind was, ‘Do what Norm says!’ It’s that easy.”
DSP 20 Group members meet three times a year to compare financials, share best practices and ideas, and help each other overcome challenges and take advantage of opportunities. They can work “on” their businesses instead of “in” their business.
Upton says the tough piece of the 20 Group concept is applying the principles Gaither advocates. None is more important than the payroll maximum of 45% of gross profit.
“Understand, when I started with the 20 Group, my payroll was at 65% (payroll dollars divided by gross profit dollars). I went to that first meeting and was so embarrassed that I quit.”
But he came back. This time his payroll was at 63%. Upton’s return to the 20 Group was critical to his later success. “While I never got to the 45% that Norm preaches, when the business was sold we were at 50%, and a multitude of problems had disappeared – cash flow, smiling bankers, to name a few.”
For the complete story on Upton’s experience and details on the 20 Group concepts that help tire dealers improve their operations, see “How to Get Top Dollar for Your Business” online or in the print or digital edition (starts on page 56) of the November Modern Tire Dealer.