The stretch of Woodward from Eight Mile Rd. to Huron St. in Pontiac has more automotive repair businesses per mile than any other place in the world.
When I was up there to visit recently, I noticed some of the iconic shops were no longer open for business, and many of the shops were just empty shells with a real estate agency’s sign in the window.
Many of these shops had weathered some of the worst economic storm in our nations history, including a shop that had survived the Great Depression. This “Great Recession” that is now starting to end was different, not in its severity, but in the demographics.
Many of these shop owners were “baby boomers” and more than anything, they wanted to retire.
A lot of these shop owners were second or third generation owners. A lot of them came back from Vietnam in the 1970s and took over from their fathers. These Woodward shop owners saw the peak of the muscle car era and the invasion of the imports and had survived.
These shop owners have been building their businesses and reputations over the past 40 years. To their credit, they have built the aftermarket into a $261-billion-a-year powerhouse.
Retire? Not Me!
As an independent business owner, your retirement plan is up to you. There are no pensions or 401Ks, and you have to buy your own gold watch. So, planning a smooth transition from shop owner to retiree is essential for you, and the economy of your community.
For every shop owner, the sale of their business should be a substantial chunk of their retirement. If the shop owner is not able to sell the business at a fair price, it may force them to stay behind the counter longer than they would like. Instead of planning to sell the business and retire, they are now planning to die.
Investing in new technology, building a customer list and marketing becomes secondary to just surviving. Chances are that the business will die with the owner. The relatives will be stuck with selling it cheap or liquidating the assets. Hey, your dead, what do you care? Think again.
What if the owner was able to make a smooth sale over several years instead of forcing the family to have a fire sale to pay the estate tax after his death or tragic accident? Chances are it would still be a part of the economy instead of an eyesore on Woodward.
With so many shop owners planning to get out in, the future of the independent or franchise shop is bound to change. Only so many shops will be passed on to sons and daughters. Also, there are only so many people willing to buy and manage an automotive business. This has spawned some speculation within the business community.
One prediction has been that there will be fewer shops, but the number of service bays per shop will increase. In other words, surviving shops will pick up the market share.
Another prediction has been that in the future, the multi-location owner will become the norm for independent and franchises. And, as these owners retire, they will sell their shops to the new “big dogs” on the block looking for more territory. Some even predict that this trend will snowball and all the repair shops in the country will be owned by just a few people or corporations. While this theory is far fetched, it is a possible trend that the industry should not ignore.
How can boarded-up shops on Woodward be prevented? The plain and simple truth is that every shop owner should have a plan to get out when they reach retirement age. Even if you plan to work till your last dying day, still have a plan of succession so your shop will not become a eyesore on main street. Remember that your employees are your best chance at keeping the business going after you are gone. Train them, teach them and make them part of the business and not just clock punchers.