IMPORTANCE OF DILIGENCE PRELIMINARY DILIGENCE IS IMPERATIVE FOR ACCURATE DEALERSHIP EVALUATION * In order for professional consultants to effectively prepare a full and accurate evaluation of your dealership, they need to complete a full dealership analysis, both financially and operationally * Valuations can fluctuate substantially with only a few abnormalities on the financial statement * Dealership performance influences multiples and multiples cannot be taken at face value and requires additional analysis before determining intrinsic value * Multiples are not solely based on brand and location - performance of a dealership impacts multiples substantially which is why the accuracy and understanding of the dealership's operational performance is essential * Unfortunately, a common tactic in our industry is to provide an unrealistic valuation in order to bind a Seller into a contract for an extended period of time * Sellers often get attached to the number discussed during a preliminary conversation which is detrimental to both Buyers and Sellers To maximize the efficiency of the Buy Sell process, it is crucial to understand what the underlying issues are and the dealership's operational potential. It is important to be fully transparent while disclosing all information during due diligence. Being upfront on all aspects of the dealership will not only save time and money, it will immediately build trust between the Buyer and Seller.