Selling an aftermarket hot rod business - looking for advice from those that know

[Hydratech®]

Yes - rub your eyeballs in disbelief if needed:

** Hydratech Braking Systems LLC is up for sale **

I have been working 70-80 hours a week with every ounce of my energy since 2000 to create this (monster), and now it is getting larger and larger - actually becoming more than I can properly handle. We now service customers all over the globe, large dealer accounts, high end builders, direct customer sales, Aeroquip sales - sounds great, right? I have come to the conclusion that I must be a vastly better engineer than business man, as this venture is now more than I can properly handle. I know it may sound like I need to bring in the right people to properly handle this, and you are absolutely correct. Thinking this out endlessly, the conclusion I keep arriving at is that the best answer is to put this company in the hands of a group that can take this company to the next level.

This is the very first that this has been placed publicly anywhere. Knowing there are many successful aftermarket business owners here, I am asking for advice and suggestions on how to proceed from those that have been there / done that. Of course contacting some "pro's" to engage in the marketing and sale of the business seems like the first logical answer, though this isn't a mainstream McDonald's or Autozone. A highly focused automotive aftermarket niche business doesn't seem to be comprehensively understood unless "you're in the business". I am thinking about contacting SEMA to see if they have any specialists well versed in this type of scenario?

The questions that come to mind are:

* Market the whole package? Locally? Nationally? Meaning turn key 7500 sq ft very nice shop that is currently fully operational on 9.5 acres of commercial property in beautiful middle Tennessee? Employees in place, inventory, contacts, design rights, operationally shipping product - literally sign and sit in my office and take over?

* Sell the business to a large group like CPP, Eckler's, or?

* If the business becomes a separate entity of the property, lease the building out to a new tenant once vacated?

* Likely have to provision for 6 months to a year of involvement with the potential new owners to (literally) get all of this information out of my head and into usuable documented form for them to proceed with properly. Factor in being a consultant "on demand" for a timeframe of specified nature?

I have some numbers on my mind, though they are only best guesses. I would hate to sell myself short, but am not looking to ride off into the sunset with pie in the sky ridiculous figures in mind either - I am a realist. I am frazzled, nerved to my wits end, and have determined that somebody out there could really take this company to a whole new level given a superior state of business organization.

Your thoughts and suggestions are highly welcomed.

NOTE: I respectfully ask that you do not call the public numbers listed for Hydratech with any possible inquiries regarding the possible sale / purchase of this company. If you have any thoughts / comments / suggestions, I ask that you either post them here, OR send me a private message within this forum, OR contact me via e-mail (paul at hydratechbraking dot com). I will then provide you with my private contact information to discuss further if needed.

HYDRATECH BRAKING SYSTEMS LLC WILL REMAIN FULLY OPERATIONAL AT ALL TIMES THOUGHOUT ANY POTENTIAL CHANGE OF OWNERSHIP.
I also expressly reserve the right to remove or modify this posting at will.

[glassman]

Good luck to you Paul, i know you have some tough decisions ahead of you and have been thinking long and hard about this. I would say i dont envy you but i'm in the same boat with my biz, only i'm not selling it (yet lol)....

Best regards, Mike

[Sieg]

Condolences Paul, I just stepped aside from a business after 36 years last October. Bottom line - I couldn't put a price on my peace of mind, health, wife, and hardly knowing my 11 and 14 year old kids.

First off I'd say you need to find someone qualified to perform a formal business and market appraisal to give you a price guideline to negotiate from. Their line of questioning will be thought provoking if nothing else and the fee's are not horrific.

You might have a talk with Jim Goodlad at Hurst Drivelines, he sold out (Classic Chevy 5 Speed) to B&M a few years ago and is still acting as technical advisor.

Hopefully a couple of "the right players" will see the opportunity and give you some pricing leverage.

Best wishes going forward!

[Vince@Meanstreets]

Good luck with the sale Paul.

Being a new small business owner myself I feel your pain. 70-80 work weeks are tough.
Would hiring a managment staff and possibly sell the ownership to your employees then stay on as an engineer make it easier on you?

Does Jim come with the business?


Hope you get it figured out.

[214Chevy]

Good luck!! I don't anything about running a business as I have a very small side business. Nothing to the level that you're on. I can only make one comment. When you do sell, I hope the new owner will take as much pride and joy in keeping the name and level of quality as you did. Too often times when a business sells and the new owner takes over, he lets the quality of the product, tech support and the customer service level go down the drain.

[protour73]

I can say first hand, as I have a Hydratech Hydroboost setup on my car, and have received first class tech advice from you - - - GREAT product, and GREAT guy!!

Good luck with your decision, Paul!!

[onevoice]

My business is not in the automotive aftermarket, but the same principles apply. With a small business, the biggest thing is $$$$$. If you don't have REALLY GOOD, REALLY AUDITED numbers, no one will make you decent offers, and the business is almost impossible to value.

A lot of small businesses are run as labors of love, where the owner puts in lots of uncompensated time. The owner IS THE BUSINESS , instead of an employee of the business. What are they worth? Who knows? Will the business fall apart without the driving force of the owner?

You appear to have facilities and inventory and employees, that part is easy. Potential sales and intellectual property are the hard parts.

I have your parts on one of my cars, and the product speaks for itself.
but when I bought(several years ago) I spoke directly to you. A great experience for a buyer, but a real problem for valuing a company. How deep is your employee experience? How long would the place run without you? Note that there is nothing wrong with the answer that you haven't taken a real vacation for 10 years, I haven't either. That means you run a tight ship, but it makes the valuation very difficult.

Good luck.

[Stuart Adams]

After smart guy does his due diligence it will come down to keeping you for salary?, keeping important people that you view essential?, cutting crappy help, making it more efficient to pay you and pay new owner, while keeping product that you've built up equal or better. Get all those facts and it should be a viable package for someone. Shoot Weld or Charley need some stress call them!!!

[Stuart Adams]

Maybe a competitor that want more market share that can merge into one. Don't show your financials without moola non refundable up front to weed out the BS and exposing yourself. Good luck.

[Stuart Adams]

Do your due diligence on the prospective buyer for sure. Make sure it can really happen.