Solid Exit Plans Require Advance Planning By All Parties

Solid Exit Plans Require Advance Planning By All Parties

For a retiring owner, the decision about "what's next" needs to be part of the conversation.

Located in Auburn, CA – part of the beautiful ‘gold country’ area of Northern California – Euro Motors opened in 1997. With over 45 years of experience in servicing import cars, owner Urs Schopfer’s goal of having customers for life has not changed. In that time, Euro Motors has grown to be a highly respected business in Placer County.

Euro Motors has always been a family business – both in the shop and the community. They have gotten to know the families who always return to the shop for quality, reliable service for their cars, and the Schopfer family is there. That includes Urs’ son, Christoph.

A few years ago, Urs started to think about his exit plan – what is the future of the business he had built and what’s next for him?

I started thinking about my exit plan a couple of years ago,” recalls Urs. “I did some research on-line on how to go about it and how to get started. I didn’t get my questions answered so I kept looking for more information. That’s when I found out about the Exit Planning Workshop that DRIVE offered. I took the class and it helped me to start planning for my future.”

Son Christoph says he actually first began thinking about owning the business a few years before that. “In 2011, when I came back to work for my dad to manage the shop, I started to really adopt practices and run the business as if I would own it one day. So, for the past decade, I have thought about buying the business.”

DRIVE’s Exit Planning Workshop finally got both Schopfers to have the same conversation, they say.

I asked Christoph after I took the Exit Planning Workshop If he was interested about purchasing the business in the next five years,” says Urs.

“My dad was taking the Exit Planing Workshop at DRIVE and I was taking another class,” says Christoph. “We discussed it on the airplane and in the following weeks. We’ve discussed succession on a monthly basis since then.”

According to Urs, the process of handing over a shop isn’t as simple as just walking away. He suggests these actions to any shop owner who is thinking about selling to a family member:

“First, find out if the family member is interested in purchasing the business and ask him or her how they would like to take it over and run it. It may not be the same way you ran it but if it makes sense to you and it works with your exit plan you need to be fine with it. This is an important conversation you need to have with your family member.

“Next, find a new GAME – something else you enjoy doing. You may have a hobby or want to start another business, and it does not have to be automotive. Or take on one job at the business that you enjoy and are really good at, like marketing or training employees. The worst thing is having nothing to do with no new goals, you will get bored and will hold back the sale of the business,” Urs says.

“Finally, find how much money you will need to support your lifestyle after the sale of the business. Will you have enough with whatever else you will get from retirement and possible new Income from another business you may start? This will help you figure out a plan for when you are ready to get out to determine how much you will have to sell it for. We are currently working on a 5-year plan, where I will keep the building and still receive the rent payment,” Urs says.

Likewise, Christoph has three recommendations for anyone preparing to take over a shop.

“You have to really want it – this is number one. You shouldn’t want to take over the family business because it is the easiest route with a path of least resistance. At one point in my life, I went back to college, graduated and started a career in a completely different field. I came back because I love this industry. If you don’t love it, then it’s not for you,” he says.

“Run the business like you will be the final boss one day,” Christoph recommends. “When a difficult decision or task comes up, act as if there is no one above you. Decide how you would handle it and then take that action. Of course, this may be difficult because your ideal scenario may be a bit different from the current owner’s, but you get the general idea.”

Christoph explains that this may also mean adopting the stresses and headaches that come with being the owner one day. “I catch myself worrying about decisions and finances all the time as if it was my business and my family depends on it. I do depend on the business to be profitable but at the end of the day, as someone who has no stake in the business, I can walk away. This is not the attitude to have, nor will it be beneficial. Take pride and ownership in every decision you make.”

Finally, Christoph recommends treating the business as a business, not as a family venture. “All contracts must be solid, all transactions must be communicated properly. Too many businesses fall apart due to miscommunication during the buying process. Be honest with yourself and really decide if buying a shop is what you want,” he says. “Still to this day, I’m constantly on the fence on whether I would like to start from scratch and build a shop or purchase a thriving shop. At the end of the day, the experiences from other people who have done both, point me toward purchasing my dad’s shop.”

However, Christoph points out, “If you want something to be yours – and REALLY yours, not someone else’s creation – you have to make it your own. You also must be patient. My dad and I have different things we want from the business. You must decide what you will get from being the owner and if that’s what you really want.”

Christoph says he’s been surprised by how challenging it has been to find a decent business appraiser and determine the value of the business; he recognizes that more surprises will occur as succession actually begins.

Both Schopfers have been facing their unique responsibilities as they head toward the eventual handoff of ownership.

My hats today are hiring, firing and training employees,” says Christoph. “We both think it’s important that I build my own team. In addition, I’ve been focusing on weekly planning, shop meetings and finances. I’m helping in the front as needed as well – all manager’s duties.”

Urs says he focuses on monthly and long-term planning. “In addition, I handle marketing, spot check that policies are followed, make sure we are financially fluent with growing reserves and and handling manager duties in Christoph’s absence,” he says.

Urs explains, “Today, Christoph is running the day-to-day operation as a manager; he is in the process of taking over the owner responsibilities and turning over the manager hat. I’m working on a new photography business and finalizing the Exit Plan. The plan is for me to be out of the business by April 1, 2027. This will be the 30th anniversary of the business.”

Both Schopfers explained what they love about their business.

“I love to help and educate our customers about proper car care and maintenance,” says Urs. “I may not do this personally anymore but, together with Christoph, we’ve built a team that’s on the same page of helping our customers drive safe and reliable vehicles that last a long time.”

Echoing his father’s commitment to the customer, Christoph says “I love running a small business in our local small community. I would like the business to become more community oriented once I own the business. I do not enjoy working for someone and, though in a way, I work for my dad currently, I do enjoy the freedom that comes with being the manager or owner to be. I really love the industry and it is built on a good platform that will allow me to pursue the things I wish to pursue once I am the owner.”

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