Auto Body Shop Purchase - Due Diligence

December 31, 2023

by a searcher from University at Buffalo, State University of New York - School of Management in Long Island, New York, USA

Hello everyone!

I'm currently acquiring an Auto Body Shop and would greatly appreciate any insights or expertise from professionals experienced in due diligence within the automotive industry. I'm based in the New York area and am seeking guidance on examining cash-heavy businesses like Auto Body Shops, I'm eager to identify potential issues or challenges before finalizing the purchase.

If you have experience or knowledge in this area, I'd love to hear your advice on evaluating financial records, understanding customer contracts, or any other relevant aspects of the business.

Your insights will be incredibly valuable in shaping this journey. Please feel free to drop any tips or recommendations below. Thank you in advance for your help!

Reply by a lender
from Montclair State University in Odenton, MD, USA

I’ve financed some auto/ repair shops in the past. Are you looking at buying the property or will it be leased? For SBA, auto repair shops, are on the environmentally sensitive list. I’m surprised to see that this auto repair shop is cash-heavy. I have not encountered auto-repair shops to carry a lot of cash. I would want to understand where they get their business from.

Reply by a searcher
from The University of Chicago in Philadelphia, PA, USA

I'd be curious if there is a technology element to your thesis with an opportunity to improve the customer experience. The call-based lack of clarity around drop off and pick up seems like an area where scheduling software could improve matching demand and resource planning.

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