Valuing your dealership and planning ahead

Over the years and likely decades, through boom-and-bust economies and seven-day work weeks, you have worked hard to build incredible marine dealerships that may one day be passed down to family or managers, or sold as you sail off into retirement.

However, according to the Exit Planning Institute, upwards of 95 percent of owners aren’t certain of the value of their business. Similar studies show that, on average, 80 to 90 percent of a small business owner’s net worth is locked in their business and real estate. Most dealers we speak with don’t know the value of their life’s work until just before impending exit.

In a recent webinar featuring Jon Couwenberg and Bruce Marcia, partners in the marine and RV division at Performance Brokerage Services, we answered dealers’ most pressing questions.

So, what’s your business worth?

This is the question we are asked the most. Valuations are driven by past performance, which has been skewed by record Covid-era profits and the more recent slowdown. However, buyers are still valuing dealerships with the same methods. A buyer will typically request three years of financial statements to average your earnings or EBITDA (earnings before interest, taxes, depreciation, and amortization). They will then apply a multiple, typically anywhere from two to four times EBITDA based on a host of tangible and intangible variables. However, given the current dealership market, declining profitability and economic uncertainty, these multiples are hard to support.

“The value of a dealership lies in the buyer’s belief that they can maintain or improve the current performance, and their desired return on investment,” said Couwenberg. “As a firm, we believe that the value cannot be determined solely on track record. Instead, it should be a combination of the historical adjusted earnings, the buyer’s and projected earnings, and the buyer’s desired return on investment. The goal is to identify the unique buyer who has a special motivation to acquire your business, who can find a path to a higher proforma, and offer you a higher price,” he said.

What buyers really evaluate

Buying criteria differ, but some factors come up consistently:

• Ownership history – Time owned and sale motivation.
• Management – GM and department heads in place.
• Reputation – Google reviews/establishment in community.
• Market location – Near highways, metros, or water access.
• Brand mix– Brands match market demand & demographics.
• Real estate– Owned/leased? Expandable/market-aligned?
• Profit trends– Consistent and sustainable, especially pre- and post-Covid-19?
• Capital expenditures – Will the buyer need to invest in renovations or expansion?
• Location – Desirable and accessible? Waterfront? Coastal or lake access?
• Performance – How do your metrics compare to industry benchmarks?
• Price alignment ― Are profits in line with the asking price?
• Turnkey operations – Is the store well-run, established, and ready for handoff?

Building your roadmap

Once you have a clear understanding of your dealership’s value, the next step is to develop a written roadmap to grow or exit your business. That doesn’t necessarily mean a sale. Understanding the value of your dealership allows owners to transfer ownership to their children, hire and groom a general manager, or look to engage a broker and sell outright. There’s no one-size-fits-all solution, but there should be a proactive, customized strategy that matches your goals, timeline, and vision for the business’s future.

The most important numbers

The value of your dealership is just one piece of the puzzle. What really matters is what will land in your pocket after taxes, debts, deal costs, and expenses. That “walkaway number” determines whether the deal will ensure the financial future you envision.

To find your walkaway number, it is critical to work with your financial planner and CPA. Once established, we look for ways to further increase it through business growth or by reducing tax liability. There are often strategies to minimize taxes, especially when you plan in advance. Clients are encouraged to involve their CPA, estate attorney, and financial advisor early as impactful tax strategies must be executed years in advance, and at the very least, before going to market.

Planning for an uncertain future

Whether looking to exit your dealership in the next 12 months or 10 years, proactively establishing a roadmap allows maximum flexibility. Dealers should know their retirement “number,” which is the amount of income needed each year after selling or transferring the business. We can then work backward to determine what the sale or transition must net you. For example, if you need an additional $400,000 per year from the sale and plan to withdraw four percent annually, you’ll need to net $10 million from the sale. On the other hand, if you pass the business to family, can you be certain that rental income, social security, and other income streams will be enough to reach your minimum target?

The time to start is now

Understanding the value of a dealership and building out a plan is not a task for the final years before retirement. It’s a long-term strategy that protects your family’s financial future. With the right approach, dealers can navigate the uncertainties of planning and achieve a favorable outcome that aligns with their personal and financial goals. To help build out this plan, our team offers a complimentary service, the Exit Plan Road Map, a 360-degree review of your dealership and personal financial situation.

Anthony Nasca, CEPA ([email protected]) is a certified exit planning advisor and financial advisor, and Brad Stanek ([email protected]) is an executive director and financial advisor at The Stanek-Haack Group at Morgan Stanley in Chicago.

Source: https://boatingindustry.com/features/2025/07/01/valuing-your-dealership-and-planning-ahead/