The right industry, good revenue, a realistic asking price—one particular auto repair shop stood out as a good opportunity when Dwayne Dudiak found the business-for-sale listing on the Sunbelt of Edmonton website.
At the time, Dwayne and his soon-to-be business partner, Dave Tomlinson, were co-workers at a fleet-based company: Dwayne on repair, Dave on automotive IT like mobile computer systems. They often talked about going out on their own to enjoy the rewards of self-employment. While Dwayne had previous experience as the owner of an auto repair shop, entrepreneurship was new to Dave.
Dave and Dwayne started to research more on how they could realize their dream. This listing could be just the possibility that could do it. “How do we make it happen?” was the question. That’s when they followed up with Sunbelt.
In the summer of 2012, the two met with Michael McCulloch, owner of the local Sunbelt office in Edmonton, to get more of an idea of what was involved in purchasing this business-of-interest from the long-time owner. Prior to the meeting, neither partner had ever heard of Sunbelt or knew of its valuable role as a business broker.
The partners began to gather what they needed to be considered serious buyers and to receive additional information on the business for sale. Confidentiality is a critical factor for most sellers, notes Michael. "A more detailed business prospectus is only provided to qualified prospective buyers after they have signed a legally enforceable non-disclosure agreement (NDA)."
For Dave and Dwayne, part of that information gathering process included getting financing. In the end, banks were reluctant to give them a start-up loan; however, Dave was able to obtain some financing from his own resources.
As it turned out, the listing was for Auto Imports. Since 1997, it has been repairing imported cars. Under a well-respected long-time owner, the business had an established base of loyal customers. As a bonus, Auto Imports came with two excellent, long-time mechanics.
Dave and Dwayne were also pleased to learn of its ideal location on 99th Street at 75th Avenue. From experience, Dwayne knew that traffic is critical to an auto repair shop, and this location boasts 10 to 30 thousand cars a day. Situated on the south side of Edmonton, Auto Imports is on the route of many commuters heading into downtown Edmonton, making it easy for people to drop off their cars in the morning and be on their way.
Under the hood
Early in 2013, they returned to Michael at Sunbelt. Two issues loomed: Number one was the completion of the necessary financing; number two was the lease held on the land and building. Michael connected Dave and Dwayne to a financing broker. From that source and with Michael’s help, Dave and Dwayne obtained the full amount of money they needed for the purchase.
"We regularly provide assistance and financing recommendations to clients who require additional capital," says Michael.
In Dave’s words, that left the “sticky” lease. The original owner had let the lease lapse, making it a big surprise that needed to be dealt with. Once again, Michael contacted the landlord in California and helped work out some issues with the lease. He worked with the lawyers and helped to negotiate the best possible deal for the partners.
“The transition was not easy,” confesses Dwayne. But Dave added, “Michael did an excellent job of smoothing it all out and putting it all together. Sunbelt saved the deal.”
“Everything with Sunbelt is up front,” says Dave. “Michael was more than helpful. Even though the transaction is complete, he still keeps in touch and drops by. He’s helped us with a number of things, like hooking us up with a good bookkeeper.”
So far, the business is doing very well. As the new owners, Dave and Dwayne have retained all of the shop’s loyal customers. They have also benefited by receiving help from the former owner. In addition, the partners have brought in new business from previous contacts: lucrative fleet and body shop accounts.
The new owners have not only kept the two original mechanics, but they’re also considering adding another. That would bring the total number of mechanics to four including Dwayne.
The best part, says Dave, is having your own business. “You do ten times the work, but you’re working for yourself.”
The partners credit Sunbelt with making this all happen. “Without Sunbelt,” Dave says, “it wouldn’t have worked out.”