RENO, Nevada—You’ve spent your life building a successful trailer dealership, but you’re ready to retire—or at least to slow down and relax a little—so you need a succession plan.
If you have a next generation of family waiting in the wings, that’s good. Or maybe not. If you just want to cash out, that’s good. Or maybe not.
The main thing is to have a plan—and to understand that it takes about three years to put a solid succession plan together and position the business accordingly, explained Sara Hey, president of business development at Bob Clements International, a consultancy that specializes in dealership management.
An accomplished author and public speaker, Hey entertained the packed conference room at NATDA's Trailer Tech Expo with stories about a range of clients, any one of which could’ve been about the dealers in the room and their main concern: What happens to my life's work when I'm gone?
Hey understands the anxiety. As a second-generation business owner herself (Hey is the daughter of the founder) she knew the sometimes delicate dance of family legacy and business survival.
Her presentation wasn't just a lively lecture; it was a roadmap through the treacherous terrain of business transition.
"How many of you see your dealership as your retirement plan?" she asked. Hands came up, and each represented years of sweat, sacrifice, and dreams built one trailer, one customer at a time.
Hey’s cautionary tales captured the pusle family business challenges. She spoke of a New York dealership where a daughter spent years preparing to take over, only to realize her heart wasn't in the business. Years of dinner table conversations, often bemoaning the weighty responsibility that running a dealership demands, had subtly painted the enterprise as a burden rather than an opportunity.
"The first critical question," Sarah emphasized, "is whether the next generation actually wants to run the business?”
Key questions for family
To get started, Hey offered the basics.
- Do they actually want to run the business, or are they just being too nice to say no?
- Are they ready to handle the late-night calls, inventory headaches, and customer emergencies?
- Are they equipped to handle the responsibilities, or do they need further training?
- Is the transition a gift, a buyout, or an unpaid internship?
- Are there clear expectations and plans for the transition, including the buyout amount?
Her presentation featured real-world examples from clients that illustrated how critical each these issues can be.
In one instance, the owners of Texas dealership and the next generation were all set with the succession, until they finally got to the value of the business. Mom and dad priced the business at twice what the kids thought was fair, leading to “a massive breakdown”—of the deal, and of the family relationship.
“You have spent so much time building this business, and you've built it to provide for your family,” Hey said. “So to have this cut off, this break, that's the opposite of where we want to go. So let's be clear on how we are going to transition. Have the conversation early and have it often.”
She also posed the matter of “the 4 Ds,” or what happens in worst-case scenarios like death, divorce, debt, or drug issues?
Hey suggested having such unpleasant but necessary conversations at a “neutral place,” not around the dinner table at home, or even at the dealership, which is “Mom and Dad’s turf.” Instead, think pizza parlor. The main thing is to “keep emotions low.”
And while the 4 Ds are obviously hard to talk about, there are even more subtle areas to consider: Suppose Mom and Dad happen to really like the spouse of one of their children, but can barely trust the spouse of the other with their grandkids. How do you talk about that?
And critically, will employees, customers, and vendors take the next generation seriously?
“Just because you as Mom and Dad have set up the business and you've created this great relationship, it does not necessarily transfer to the next generation,” Hey said, pointing to things transferring more tangible items such as credit and contracts. “All of these different pieces have to be addressed before we transition the business.”
Hey told of a Florida dealership where the owner died suddenly and his 22-year-old daughter suddenly inherited the business—and she was not prepared. But a lot of hard-working, loyal people depended on the business of their livelihoods.
“Lucky for her, there was a general manager who had been at the dealership for over 20 years,” Hey continued. “He had seen this girl grow up to be who she was. He walked alongside her to give her direction, and helped her build up this business.
“But if we transition the business and we lose all of our employees in the midst of it, does that do anything positive for our business at all? Absolutely not.”
Finding outside buyers
For those considering selling outside the family, Hey offered another set of crucial considerations. What is the business truly worth? Are you willing to sell to just anyone? How do you communicate the transition without causing panic? What's your plan after selling?
She shared a painful story of a dealership owner who sold without preparing his employees, causing immediate organizational chaos.
“People can handle the ups and downs and the volatility, and honestly, as business owners, some of you probably thrive on the unknown,” Hey said. “But oftentimes your employees are not the same kind of people. Before we get to a place of selling and rolling this out to your employees, we need to be clear on answering the questions that they're getting ready to ask. How does this affect me? What does this mean for my job? What does this mean for my friends’ jobs? What does this mean for my paycheck? What does this mean for my insurance?
“Anything that would directly affect them, we need to have an answer to.”
Another tale highlighted the dangers of an owner staying on as a "consultant"—a situation that invariably led to tension and dysfunction.
“Why in the world would I not want to see you, as an owner, stay in the business as an employee?” Hey supposed. “Number one, you're going to suck at it because you have been in charge up to this point—you have made every single call. And you're going to be like, ‘listen, that's not how we did it when I was running the business.’ How helpful is that to the new ownership?:
The most compelling advice centered on preparation.
"The fastest way to increase your business's value," Hey said, "is to make yourself unnecessary."
This means hiring a GM, developing crystal-clear processes, and creating a business that could run smoothly without the original owner's constant intervention.
Trust, but verify
Hey didn't shy away from the darker realities of business ownership.
She discussed the potential for theft, whether cash or parts, sharing stories of employees who had stolen hundreds of thousands by exploiting trust. Her advice was brutally simple: Trust, but verify.
Use management software, pull exception reports, and always have two people sign checks. Managers and employees might be sensitive to the oversight, but it’s for everyone’s protection.
"One hour of lost productivity per day for a single employee can cost $60,000 annually," she said. "Imagine that across your entire team."
Hey’s final message was one of hope: Transition isn't about ending something, but beginning a new chapter.
Whether passing to family or selling to an external buyer, the goal is to preserve the business's core values and ensure its continued success. Your business is more than its assets; it’s a living legacy, waiting to be thoughtfully transferred to the next generation of entrepreneurs.