Boating Industry

March 2016

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26 | Boating Industry | March 2016 [ Best Laid Plans ] buy it someday. I didn't want them to feel like they had to be the owners of this dealership 10 or 15 years from now." The Miklos are staying on at Oak Hill in a consulting role for up to 10 years. While Jostand and Sather have, together, 35 years of industry experience, this decision will help the new own- ers with facing challenges they are not familiar with, having never owned the dealership. "It's not that these guys don't know what they have going on, but it's some things that they may not have seen from the ownership side that pop up on a monthly basis," said Miklo. "And when you're buying a business the size that [Oak Hill Marina is], it helps structure the financial side of it a little bit better for both parties involved." Transitioning ownership from a current owner to an employee can be difficult, as current owners may have a hard time letting go, but the more current and new owners communicate, the better. "There has to be a willing buyer, a willing seller and an agreement that makes everybody happy," said Miklo. "A lot of times there's some heartburn from one side or the other when you walk away, and I don't believe we have that." In addition to all of the logistics that come with transitioning a business, Jostand and Sather were required to attend management training before the Miklos would sell the business, which everyone agreed was key to their success. "When the first Leadership Development Program came out, Phil and Teresa sent me to that with the intention of being a prerequisite for me to step into that management role here at the dealership," said Jostand. "I learned so much there as far as managing people and processes, and not necessarily the dollars and cents side of business." This has been especially important for a pur- chase where there are two employee buyers, not one. Because Jostand and Sather attended the same training, when there is a question about how to handle a situation in the business, the two owners come up with the same answer most of the time. "One of the key [elements] of that train- ing that's going to pay dividends for Jake and I for years to come is the fact that we've both been through the same training, so when things do arise within the dealership, anything from strategy to people problems, we've had the same training and can sit down and have discussion with the same background for our thought pro- cesses," added Sather. It is important for owners to be thinking about succession early, especially if they plan to sell to an employee instead of a family member. You never know if that seasonal high school hire will want to be an owner 20 years later, as was the case with Jostand for Oak Hill. "The proper planning has to be there in order for it to work. It starts with management hiring the right people," said Miklo. For employees who think they may want to buy their employer's business someday, it is never too early to start the conversation. In fact, it is better for all parties involved to have it on the table. Just as with a family member, the employee buying the business needs to understand all of its intricacies and have a passion for ownership. "Learn your business. If you do have any aspirations of purchasing your place of employ- ment, you need to wake up every day with the passion and the drive to go to work and operate the business as your own," said Sather. their greatest builder of value is to bring in good people [and] train them very well so that they understand and can run the business, or run their particular departments at a high level, because that makes them more valuable than anything else they can do." Singleton added that the value of the existing owner is also key to a buyer. In the OneWater model, purchased dealerships keep their existing branding, due to their value in their communities, and owners are offered the opportunity to stay on and work in the business, eventually exiting on their own time. "We are more than interested and really like to unload the day-to- day burden or minutia of the business off of the owner and let them get back to the reason they originally got in the business, which was selling boats and taking care of customers," said Singleton. "They might want to work a couple more years, and really what we've found is a lot of them want to work longer than they thought they did because they don't have to deal with the stuff they didn't like – they only have to deal with the stuff they like." In any third-party sale, constant communication about all aspects of the business will make the transition simpler for both seller and buyer. "Be transparent. If there's not transparency, the opportunity to sell your business gets very small. If there's a wart in your business, you might as well tell the person looking to purchase your business that there's a wart, because it's going to come out in due diligence at some point," said Paul Nickel, president of Pride Marine Group, which owns 11 Canadian dealerships. Selling a business, in many cases, is not as drawn-out of a process as transitioning ownership to a family member or key employee. For a dealership, Singleton said the OneWater model can close deals in 90 to 120 days. However, timing is still important, based on when buyers are looking to purchase. "It's always easier as a buyer to purchase a dealership at the end of a quarter or the end of a calendar year," said Singleton. "At the end of the season, spend the slower months of fall cleaning up everything and get- ting the books scrubbed, get everything set up and start looking for that potential buyer at the end of the season so that they can get a close at the beginning of the year." That being said, owners who know they will eventually want to sell their business should not wait until the last minute to make the decision. Executing the deal does not take time but the more you plan, the more value your business will have and be able to realize. "If you're thinking of selling, don't wait until you don't have options," said Nickel. "When your back is up against the wall isn't the best time to maximize value." SELLING TO A KEY EMPLOYEE continued from page 25 SELLING TO A THIRD PARTY continued from page 25

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