Digital Dealer - December 2019 - 6

D E A L E R OP S & M ANAGEM ENT: Su cce s si on Pl anni ng

By Kendall Rawls
Director of Development,
The Rawls Group

9 Areas That
Build Value in
Your Dealership
The new year brings
change, and with
change comes uncertainties
- often leading to fear,
anxiety, and worry of the
unknown.
As we enter this new
year, we face an upcoming
presidential election, which
in of itself creates additional
unknowns for the future. Will
the economy stay strong?
Will unemployment stay
low? What will interest rates
look like? How will technology continue to advance
and create change? Do you
have a recession-protection
plan in place? In short, have
you built a foundation for
your business to stay agile
and flexible in the face of
change?
If there is one thing that is
for sure, change is imminent. It is the one constant
on which we can count.
However, just because we're
not sure of what the exact
change will be does not
mean we should not have
plans in place to handle
them. With that, there is a
lot that goes into this type
of planning. It can get so
complex that dealers either
don't engage in it - or tell
themselves they are not
there yet.
We take the complexities
6

DECEMEBER 2019

of the planning and break
it down into consumable
intense focus areas. We call
this the Succession Matrix®,
and these 10 key areas build
business value today and
into the future, while achieving your succession goals:
1. OWNER MOTIVATION & PERSPECTIVE.

As business owners, your
dealership(s) ultimately

chisors are all significantly
affected by your attitude
towards the business. Communication of your goals
and priorities to all those
involved in the business is
critical to achieving buy-in
to your vision of success.
As the business owner, you
establish both the limitations
and possibilities of business
growth on longevity through

YOUR VIEW AS THE
OWNER FRAMES THE
VALUES AND PRACTICES
OF YOUR BUSINESS."
take on your values and
priorities - good or bad. Just
as your outlook on life sets
the tone for how happy and
successful you can be, your
motivation and perspective
with respect to the business
establishes the operating
direction and performance
expectations. Your view
as the owner frames the
values and practices of
your business, which in turn
impacts profitability, efficiency, enthusiasm, innovation,
customer satisfaction, and
the sustainability of success.
Your relationships with
family members, key managers, employees, strategic
vendors, creditors, and fran-

D I G I TA L D E A L E R . C O M

multiple generations.
2. PERSONAL FINANCIAL PLANNING. This

initiative involves using the
fruits of your labor to build
personal financial security
independent of the business.
Having a personal financial
wealth development and
management strategy will
provide you with the freedom to consider all viable
business exit strategies
without being forced into
one solely based on your
personal financial needs.
The development of an
efficient estate plan will
protect your accumulated
wealth critical to you and
your family security. A proper

estate plan can maintain
your privacy as you equitably
transfer your wealth, including the delicate business
enterprise to appropriate family members and charities.
Personal financial planning
also provides the foundation
for developing credit worthiness and transferring credit
guarantees to family or key
manager successors.
3. BUSINESS
STRUCTURING. The

structure of your business
has a direct impact upon
items such as business
taxation, control of business
ownership, gift and estate
tax on business transfers,
and shareholder access to
cash flow. As a business
owner it is critical that
you or an experienced
advisor understand the
details relating to corporate
structures and agreements
between directors, owners,
and key managers as they
have a significant influence
upon your businesses'
success and longevity.
Appropriately designed,
communicated, and coordinated stockholder, operating
and partnership agreements
provide confidence in anticipated business value and
ownership rights. The primary
purpose of these agreements is to preclude featured
disagreements that may
handicap the attitudes and
enthusiasm of shareholders.
Well-thought out and documented business agreements
provide greater certainty that
your expectations as a business owner will be fulfilled.
Another benefit to using
effective business structuring
techniques is their ability to
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