Car dealer Jim Estabrook has no immediate plans to retire. But 25 years ago, he started his plan to ensure his family would be financially secure after he passed away. About 10 years ago, the 69 year-old president of Estabrook Motors Co. began preparing his sons to take over the company and most recently, he hired succession planners to arrange a legal and orderly management transition for when he leaves the business.
“One of the problems a lot of people have with transition planning, both financially and personally, is you have to be able to contemplate your own death, or at least giving up the reins,” Estabrook says. “Realistically, both things have to happen, so you might as well suck it up and do it.”
Without proper succession planning, an auto dealer could leave behind a legacy of litigation and failed business and family relationships. Recent polls show that the average age of auto dealers is above the age of 60. Despite this fact, according to some sources, only about a quarter of all U.S. dealers have a succession plan.
In an e-mailed statement, Ernest Bastien, vice president of Toyota Motor Sales U.S.A.’s retail market development, says, “While TMS does not require a succession plan, we continuously encourage dealers to engage in such planning.”
Bastien says the average age of the company’s dealers is 61 at the Toyota brand and 64 at Lexus. Roughly 10 percent of Toyota dealers have nominated successors on record, while Lexus is only slightly higher. General Motors, Ford, Nissan and Mercedes declined to give their dealer’s average age, but all examine proposed successors — and can veto a proposed successor.
Jim Estabrook knows he can’t oversee his sons forever, but he feels confident he has prepared them well and laid the groundwork, with a good succession plan, to preserve both the family business and their brotherly bond.
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Source: Automotive News