The time has come to move on from your RV dealership. Whether you’re looking to retire, embark on a new adventure, or simply change direction, you have two primary options for exiting your business: succession planning or selling the dealership outright. Each approach offers distinct advantages and considerations, making the choice a pivotal decision in your entrepreneurial journey. In this blog, we’ll concisely explore the differences between succession planning and a sale to help you make an informed choice.
Dealership Succession Planning: Perpetuating Your Legacy
Ownership Transfer: Succession planning involves identifying and grooming a successor, often from within your dealership, to take over leadership and ownership.
Continuity: The primary goal is to ensure the continuity and long-term sustainability of the dealership, maintaining its legacy, culture, and values.
Timeline: Succession planning typically spans an extended period, allowing for a gradual transition of responsibilities and knowledge transfer.
Control: The current owners often retain some control or influence during the transition, guiding the successors as they assume leadership roles.
Training and Development: Succession planning includes training and mentoring successors, preparing them for their new roles through skill development and leadership training.
Legacy Preservation: Succession planning can preserve the dealership’s culture, values, and relationships with employees, customers, banks, and suppliers.
Dealership Sale: Maximizing Financial Gain
Ownership Transfer: An RV dealership sale involves selling most, if not all, of the dealership, including its assets, to an external buyer. The new owners have full control and ownership of the dealership.
Exit Strategy: Selling a dealership is often chosen when the current owners want to cash out and move on to other endeavors, such as retirement or new ventures.
Continuity: While the dealership may continue to operate under new ownership, the continuity of the previous owner’s legacy and values may not be a priority for the new owners.
Timeline: The sale of a dealership can occur relatively quickly, depending on market conditions and the negotiation process with potential buyers.
Control: The current owners typically relinquish all control and decision-making authority to the new owners once the sale is completed.
Financial Gain: The primary motivation for a dealership sale is often financial gain. The owners aim to maximize the return on their investment and the value of the dealership, which often includes the property.
Jeff Alpert
Quote from Jeff Alpert, Managing Director with Miracle Mile Advisors:
“The importance of tax and estate planning early in the decision-making process cannot be understated. In our experience, we’ve seen dealers wait too long to make critical decisions, costing themselves time and money and, in some cases, jeopardizing buy-sell or internal sale transactions. There is no worse feeling than being ‘underprepared.’ The time to take action is now, especially before the sunset of the estate tax exemption in 2025.”
Making the Choice – Succession Planning Might Be Right for You If:
- You have a strong desire to maintain the dealership’s legacy and culture.
- You have identified capable successors within your organization.
- A gradual transition that allows you to mentor and guide the next generation of leaders aligns with your goals.
- You’re more concerned about preserving the dealership’s values and relationships than maximizing immediate financial gain.
Selling Your Dealership Might Be Right for You If:
- You’re seeking a quicker exit and want to maximize the financial return on your investment.
- You don’t have suitable internal successors or a desire to groom them.
- Maintaining the dealership’s legacy and values is not your primary concern.
- You’re ready to move on to new personal or professional opportunities.
Conclusion
Choosing between dealership succession planning and an outright sale is a significant decision that should align with your long-term vision and personal goals. While succession planning focuses on preserving your legacy and ensuring continuity, a sale emphasizes realizing the financial value of your dealership. Whichever path you choose, careful planning, professional guidance, and a clear understanding of your priorities will be key to a successful transition and a fulfilling next chapter in your entrepreneurial journey.
To learn more about the value of your dealership or explore what a sale might look like, please reach out to our team at www.RVBS.com.
Roger L. Nuttall served as President of Camping World, Inc. from January 2011. Prior to that, he was the Chief Operating Officer of FreedomRoads, LLC from January 2009 to January 2011, and the Executive Vice President and Chief Financial Officer of FreedomRoads, LLC from November 2003 to December 2015. From 1981 to 1983, Mr. Nuttall was a partner at McKay, Nuttall, and Reid, an accounting and consulting firm. Before that, he held various staff and management positions at Grant Thornton LLP from 1974 to 1981. From 1983 to 2003, Mr. Nuttall served as Chief Financial Officer and board member of Blaine Jensen & Sons, Inc., a multi-dealership RV company. He received a B.A. from Weber State University.
Mike has almost 30 years’ experience in the Recreational Vehicle (RV) Industry and provides advisory and consulting services to clients within that industry.
Scott Degnan is the Partner and Co-founder of RV Business Solutions and President of Degnan Management Group, Inc., a consulting firm.
Dom Bookman is the Chief Operating Officer and Investor Relations lead at RV Business Solutions. With 12 years of experience in the tech industry, Dom is a serial entrepreneur specializing in business development, marketing, and growth strategies for leading brands. He has successfully piloted startups and facilitated multiple exits for early-stage companies.