Giorgio Andonian is the Managing Director at FOCUS Investment Banking, where he specializes in mergers and acquisitions within the Consumer and Automotive Aftermarket industries. He joined FOCUS in 2019, bringing over 15 years of operational experience, including his role as Vice President of a regional tire chain in Southern California, where he oversaw sales, marketing, finance, and human resources, ultimately preparing the business for a successful exit to a private equity platform. Giorgio holds a MBA with an emphasis in finance from Pepperdine University's Graziadio School of Business and Management and maintains several professional licenses, including Series 79, Series 82, Series 63, and a California Real Estate License.

In this episode…

The tire and auto repair industry is experiencing a wave of consolidation as shop owners consider mergers, acquisitions, and succession planning. What steps should business owners take to maximize the value of their business, whether they plan to sell or grow?

According to Giorgio Andonian, Managing Director at FOCUS Investment Banking, preparation is key to achieving the best outcome. Business owners should start by evaluating their financial structure, understanding fair market rent, and optimizing operations well before considering a sale. Giorgio emphasizes that having a clear succession plan, even if an immediate sale isn't in the works, can significantly impact long-term profitability and stability. Additionally, for those looking to expand rather than exit, securing the right capital and investment partners can help fuel growth while maintaining control over their business.

On this episode of Gain Traction, Mike Edge chats with Giorgio about market trends in the tire industry, how to prepare for an acquisition, and the role of private equity in fueling business growth. They also discuss why many shop owners overlook key financial details, such as fair market rent, and how proper planning can prevent costly mistakes.

Here’s a glimpse of what you’ll learn: 

• [01:52] Giorgio Andonian discusses his background in the tire industry and his role at FOCUS Investment Banking
• [04:13] The value of having a second set of eyes on a business for operational improvements
• [05:52] The importance of exit strategies and succession planning for tire shop owners
• [07:27] How FOCUS helps business owners prepare for a sale years in advance
• [17:00] Key factors buyers evaluate in a tire shop, including cleanliness and efficiency
• [17:41] The most-overlooked factor in selling a business: fair market rent
• [19:20] Buyer preference in purchasing both the business and the real estate or just one
• [20:22] How long-term lease agreements with national tenants can increase property value

Resources mentioned in this episode:

• Giorgio Andonian on LinkedIn 
• FOCUS Investment Banking 
• Les Schwab Tires
• Mike Edge on LinkedIn
• Tread Partners

Quotable Moments: 

• "Preparation is key; start planning your exit strategy years in advance to maximize your business's value."
• "Understanding your corporate structure, like C Corp versus S Corp, can significantly impact the taxes you pay upon selling."
• "Charging yourself fair market rent is crucial; many owners overlook this, affecting their business valuation."
• "It's not just about the sale price; the right buyer ensures your company's legacy and employees are in good hands."
• "Our industry experience allows us to identify operational improvements that can enhance profitability before a sale."

Action Steps: 

1. Assess your financials: Conduct a thorough evaluation of your tire shop's financial performance, including profit margins and detailed financial statements, to present an attractive profile to potential buyers.
2. Enhance curb appeal: Improve your shop's exterior by cleaning surfaces, updating signage and lighting, and organizing display areas to create a positive first impression.
3. Streamline operations: Optimize inventory management and invest in employee training to increase efficiency and customer satisfaction, making your business more appealing to buyers.
4. Gather legal documents: Compile all necessary legal paperwork, such as business licenses, tax filings, employee contracts, and insurance policies, to ensure compliance and facilitate a smooth transaction. 
5. Set a realistic price: Determine a fair market value for your tire shop based on thorough market analysis to attract serious buyers and facilitate a successful sale.

Sponsor for this episode...

This episode is brought to you by Tread Partners. 

At Tread Partners, we provide digital marketing for multi-location tire dealers and auto repair shops. 

By using our strategy, branding, and marketing services, we help shops sell more tires and put more cars in bays.

We’ve helped companies like Action Gator Tire, Colony Tire and Service, and Ulmer’s Auto Care Center bring extreme growth in paid leads, ROI, and searches. 

So, what are you waiting for?

Visit www.treadpartners.com or email [email protected] to learn more.