The value of the right advisor

The question nobody asks early enough

Most owners think about advice at the moment they decide to sell. By then, much of the value is already fixed.

A dealership’s multiple is set long before a buyer sees the file: by how earnings are normalised, how the real estate is treated, whether fixed operations are presented as a profit centre or a cost, and whether the buyer approaching you is the right one or merely the first one.

The advisor’s job is not to find a buyer. It is to make sure the business is understood correctly before anyone is allowed to price it.

Who is your advisor actually working for?

This is the part of the industry nobody puts on a website.

In most brokered transactions the intermediary is paid out of the closing, whoever closes it. Structurally, that means they are paid by both sides. Their incentive is that a deal happens — not that your deal is the right one.

DSMA acts for sellers and DSMA acts for buyers. We do both — never both in the same transaction. On your deal we represent one party and are paid by that party only. Guaranteed, in writing, before the engagement begins.

01Your information stays yours. When an advisor also represents the other side, everything you disclose becomes negotiating material. Ours does not leave the engagement.

02“No” stays available. An advisor paid only on closing cannot afford to tell you to walk away. We can, and do.

03The fee does not move. Our fees are set at the outset and do not change as the process runs, so nobody is quietly re-pricing the advice halfway through.

Where value is actually created

Before the market ever sees the business.

01Normalising the earnings. Owner compensation, related-party rent, one-off legal costs, family on payroll, personal vehicles. Presenting a clean, defensible earnings figure is often the single largest move in the final number — not because anything is hidden, but because a buyer discounts whatever they cannot verify.

02Separating the real estate. The land is frequently worth more than the operating business standing on it, and it trades to a different buyer on different terms. Sold as one undifferentiated lump, it is almost always underpriced.

03Crediting fixed operations. Service and parts carry the enterprise value in a soft market. A file that leads with new-unit volume in a down year tells the wrong story about a durable business.

04Creating genuine competition. One buyer is a negotiation. Several pre-qualified buyers, approached confidentially and in parallel, is a market. This is why 97% of the transactions we advise close at asking price or greater — not sharp practice, but because the asking price was defensible and more than one party agreed.

05Getting the manufacturer to yes. Every OEM wants the application assembled its own way. A package built to that standard is the difference between an approval that moves and one that sits on a desk for a quarter — and a deal that stalls at approval loses value every week it waits.

What changes for the seller

The transaction is a day. What follows is the rest of your life, and most owners have thought less about it than about the price.

01Your time comes back. Most dealer principals have not taken an uninterrupted fortnight in a decade. This is the change sellers mention first, and almost none of them anticipated how much it would matter.

02The proceeds need a plan before closing, not after. Deal structure — asset versus share sale, earn-outs, the treatment of the real estate, the timing of instalments — determines what you actually keep. That planning has to happen while the structure can still be changed.

03Keeping the land is a real option. Many sellers exit the operating business and retain the property, becoming the landlord to the buyer. It converts an operating headache into an indexed income stream.

04Succession stops being unresolved. Where there is no next generation waiting — or where there is, but not for this store — a transaction settles a question that has often been quietly straining the family for years.

05Some sellers do not stop. A meaningful share redeploy into another rooftop, a different brand, or property. Selling well is not always the end of the story; it is frequently the financing for the next one.

What changes for the buyer

01You see it before it is advertised. Public listings are the tail end of the market. Sell-side mandates are where the actionable opportunities are, and they are shown to pre-qualified buyers first.

02Pre-qualification is leverage, not paperwork. Proof of funds and lender confirmation, handled before you make an offer, is the difference between an offer a seller considers and an offer a seller believes. It is also what lets you move quickly when something scarce appears.

03Banks price certainty. A lender looking at a defensible third-party valuation, clean normalised earnings and a credible OEM approval path is looking at a materially lower-risk file. That shows up in the loan-to-value, the covenants and the rate.

04Scale compounds. The second rooftop is cheaper to run than the first: shared back office, better floorplan terms, more OEM leverage, a deeper management bench. Buyers who acquire with a plan for the group tend to find the third store easier again.

05Approval risk is the real risk. A transaction that dies at the manufacturer costs the buyer months and the seller momentum. This is why the OEM package is built properly at the start rather than assembled under time pressure at the end.

An illustrative walk-through

A single-point franchise doing roughly $30M in annual revenue. The owner is in their mid-sixties with no successor, and has been approached directly by a neighbouring group.

01The direct offer priced the business off reported earnings and folded the property into one number.

02Normalising removed above-market owner compensation, related-party rent and one-off professional fees — materially changing the earnings base.

03The real estate was valued separately, on its own covenant and its own comparables.

04Four pre-qualified buyers were approached confidentially, rather than one.

05The seller retained the property and leased it to the buyer on a long lease.

The outcome, in shape rather than figures: the seller realised a higher enterprise value than the direct offer, kept an indexed income stream from the land, and settled their succession question. The buyer secured a store they had not seen advertised, financed against a valuation their bank accepted without re-underwriting, and added a rooftop adjacent to their existing group.

Neither party paid DSMA. Only one of them did — which is the point.

Beyond the showroom

The same mechanics apply anywhere retail is asset-heavy: franchise agreements, floorplan, fixed operations, and land often worth more than the business on it.

DSMA advises across automotive, trucking, marine, heavy equipment, agriculture, motorcycle and body shops, and is extending into powersports, dealership real estate and technology and mobility firms selling into the dealer channel.

Where to start

You do not have to be selling. Most owners we talk to are years away, and the conversation is more useful the earlier it happens.

A valuation is not a commitment to sell. It is the number you should have had all along.