Selling an Automotive Business in Florida: All You Need to Know
Automotive businesses thrive in Florida
Are you looking to sell your automotive business? As one of the leading business and real estate brokerage firms in Florida, we specialize in small to multi-million-dollar businesses and commercial real estate investments. By offering over 3,000 businesses for sale covering 86 business categories in 67 counties in Florida, we’ve helped countless buyers and sellers successfully actualize their goals.
Florida, also known as the Sunshine State, is home to some of the most scenic drivers in the United States. Whether you decide to drive through the Florida Keys highway or take a trip through the Tamiami trail, you’re in for a treat. The state is known as a tourist’s paradise. Statistics show that Florida welcomed over 31.4 million travelers in the second quarter of 2021 alone. It’s no secret that Florida is one of the most sought out destinations nationwide.
If you’ve lived in Florida long enough, you’ll know the importance of owning a car to traverse through the state. According to the US Census Bureau, Florida has a population of over 21.48 million. Statistics show there are approximately 7.9 million registered vehicles in the Sunshine state. As a result, it’s safe to say Floridians agree the best way to get around is by possessing a vehicle.
Hence, demand for vehicles has always been high in the Sunshine state. According to IBIS World, Florida is home to nearly 13,500 used car dealerships statewide. Not only is the automotive business in high demand but also highly profitable. Therefore, you’ll likely see people clamoring to get into the automotive business themselves.
If you own an automobile dealership or a used car lot and you wish to sell it, you’ll likely have no shortage of willing buyers. After contemplating your decision, you might have decided that perhaps you wish to pursue a different career path, or maybe you want to retire. Regardless of your reasons for selling, you’re going to have no shortage of buyers ready to take your business off of your hands.
TBX Florida Can Help You Sell Your Automotive Business
Whether you’re selling a dealership or a used car lot, you’ll likely require assistance throughout the process. TBX Florida is a renowned business brokerage that can help you sell your business for the right price. Our qualified, licensed brokers will help you get a better idea of your business’s current value. They’ll also assess your venture’s financials and give you a realistic valuation about the most likely selling price you’ll receive for your business. Moreover, our business brokers can also help you get a reasonable price based on how the buyer chooses to purchase your business. Most buyers will often use some combination of cash and financing to acquire your business. They’ll either get an SBA 7(a) loan, seller financing, or a conventional bank loan. Our brokers can help you navigate through this part of the process. In addition, our brokers will also help you with the necessary documentation for the sale of your business. For starters, you’ll need a teaser, which is arguably the most important document for selling a business in Florida. The teaser outlines the potential investment to prospective buyers. You’ll want to ensure that a professional drafts your teaser, and that’s where we come into the mix.
Furthermore, you’ll likely need to show several important documents for the sale to complete. For instance, you’ll likely have to show your tax returns from the past three years. In addition, you’ll have to share the business’s profit and loss statements, cash flow statements, and balance sheets.
Things to Consider When Selling Your Automotive Business in Florida
The Median Asking Price
Our business brokers will thoroughly examine your automotive business’s financials before providing you with a valuation. Then, we’ll suggest the appropriate asking price you should set for buyers. Typically, the median asking price for car dealerships in Florida is approximately $340,000. However, this asking price only applies to businesses that generate over $250,000 in revenue and $100,000 in annual cash flow. If your business doesn’t clear these numbers, the asking price will be lower. On the low end, asking prices for automotive businesses can drop as low as $125,000 to $150,000. Likewise, if your business generates substantially over $250,000 in revenue and $100,000 in annual cash flow, the asking price could skyrocket closer to a million.
Your Business’s Revenue
Depending on your business’s location, your annual revenue will vary. Florida’s Golden Horseshoe region is the most prosperous region within the state for automotive businesses. It’s also home to some of the largest Floridian automotive companies. If your business operates in this region, you’re likely generating revenue far higher than the median average. Considering the demand for automobiles in Florida, this shouldn’t come as a surprise. Regardless, you should still be privy to the annual revenue of automotive businesses for sale in the state. Typically, the median annual revenue for Florida’s automotive business is around $540,000.
Understanding the median annual revenue and comparing it with your business’s revenue is crucial. That’s because the higher your annual revenue, the higher the asking price you can demand from prospective buyers.
Organizational Cash Flow
You’ll also want to assess how your automotive business’s cash flow stacks up against the median. Typically, automotive businesses for sale in Florida have a median cash flow of approximately $150,000. When you calculate the cash flow as a percentage of revenue, it totals about 28 percent.
Depending on your organization’s revenue and cash flow, you could either exceed this percentage figure or fall below it. Our business brokerage will help you evaluate where your business stands and how it impacts the selling potential of your automotive business.