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Welcome to The Main Street Minute, your shortcut to small business ownership.
👋 Shout-out to the new readers who joined the newsletter last week.
Today’s story: A first-time business buyer sets his sights on a $1 million auto shop with steady cash flow, loyal staff, and the challenge of stepping into 2 owners’ shoes.
Now onto today’s deal…
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NUMBERS
Every week, we pull a live deal straight from inside the Contrarian Community so you can see what it’s really like to hunt, vet, and negotiate Main Street acquisitions.
This week’s target: a 30-year-old auto shop that specializes in foreign cars. It’s second-generation owned, with a loyal customer base, a two-week service backlog, and a set of owners ready to retire.
The shop brings in about $1.5 million in annual revenue and $365k in SDE. The asking price is just under $1 million, with an offer on the table for $900k using SBA financing.
The business has steady demand, reliable long-term staff, and all lifts and equipment included in the sale. But here’s the challenge: it’s currently run by two full-time owners, and the buyer would need to replace both.
The prospective buyer isn’t a mechanic, but he once was. He spent his early years turning wrenches before pivoting into a more corporate life. Now he’s ready to come full circle.
For him, this deal was more than a financial model. It was a shot at taking control, a way to get back to his roots and finally own something tangible.
His plan is to take over operations, retain one owner part-time during the transition, and use SBA financing to close the deal.
Let’s dive in…
KEY IDEAS
When this auto repair shop came up for review, the community didn’t just analyze numbers. They talked through the messy parts of buying a hands-on business: labor shortages, environmental risk, and what it really takes to step into an owner-operator role.
Here are 5 lessons that came out of that conversation.
This business isn’t run by an “absentee” owner. It’s run by two owners who both work there full-time. One runs the office, handles customers, and manages the books, while the other is a technician in the shop.
“Both of them are there every day. However, I did negotiate with one of the owners… he wanted to stay and stay part time and just do tech work.”
One deal advisor flagged that the SDE doesn’t always reflect the cost of replacement labor. If you need to hire two people to cover what the owners do, or personally work full-time to replace them, your cash flow can shrink fast.
Labor risk came up over and over. Even strong auto shops struggle to find and keep technicians. It’s not a problem you can fix overnight, either. The shortage is national. One veteran in the group, who’d spent 3 decades in the automotive world, jumped in to explain why.
He added that today’s technicians aren’t just mechanics, they’re part electrician, part coder. Modern vehicles require calibration tools, software updates, and diagnostic systems that can cost tens of thousands of dollars to operate.
“Cars are getting more complex now. Everything’s electronic. All the calibration and diagnostic equipment for electronics is expensive. If the shop’s outfitted right, though, you can attract the work and the talent.”
That evolution means a shop’s moat isn’t just its customer base, but whether its staff and equipment can keep up with the pace of technology.
One member — also in the industry — asked a simple but sharp question:
“Do you have a service manager in the shop? Because these shops live and die by how good the service manager is.”
The buyer answered:
“There is a full-time service manager, and he’s been with the company for over 20 years.”
That one line told the room a lot. That kind of tenure is gold in small business. It means loyalty, relationships, and deep operational knowledge. But it also means key-person risk. If that person leaves after the sale, so might decades of trust from customers.
The business sits in a property owned by the seller, and the buyer could either lease or buy it. Because the shop has been there for decades, a few deal advisors flagged potential environmental issues:
Translation: before you sign anything, make sure the land isn’t hiding old oil or chemical leaks. Lenders often require an environmental inspection before they’ll approve a loan.
At first glance, on virtually every financial metric, this was a textbook eligible business. As the buyer put it:
“It seems like a pretty straightforward deal. The debt service coverage ratio is around 2, and the deal cash flow is pretty much right where I want it to be.”
But clean spreadsheets don’t capture what it’s like to run a busy shop with 2 owners leaving and 6 employees depending on you. The reality could mean long days, steep learning curves, and management challenges that don’t show up in the calculators.
“My main concerns are around the staff I will need to add to maintain any semblance of quality of life.”
That comment hit home for many in the group. A “profitable” business can still mean 60-hour weeks, constant problem-solving, and pressure that never really turns off.
In case it wasn’t clear to you, buying a business isn’t just an investment decision; it’s very much a lifestyle one.
INDUSTRY
The auto repair and body shop industry is one of the largest and most local business sectors in America. It’s a cornerstone of Main Street that most people drive past every day without ever really considering its scale.
Together, auto repair and body shops generate nearly $120 billion in annual revenue, employ more than 600,000 workers, and remain among the most fragmented industries in the country.
One major tailwind: Americans are keeping their cars longer. The average vehicle age is now 12.5 years, a record high. Every extra year on the road means more oil changes, diagnostics, and more work for independent mechanics.
That complexity is reshaping what “auto repair” means. Modern technicians need to handle not just engines, but software updates, sensors, and onboard computers.
This deal sits right at that crossroads: steady demand, proven history, and a loyal staff, but all inside an industry where technical skill, labor shortages, and leadership transitions are becoming just as important as oil changes and brake jobs.
THE BOTTOM LINE
After meeting with the sellers, he was ready to move. The numbers made sense, financing was lining up, and the fit felt right.
Then the call came: another buyer had submitted an LOI, and the sellers accepted it. It stung, but he didn’t let the process stop there. He kept in contact with the broker.
One deal advisor urged him not to wait nearly that long.
It was a simple lesson, but it summed up a key idea the group repeats often: in small business deals, timing and persistence matter as much as anything.
He didn’t get this one yet. But he’s staying close, staying ready, and walking away sharper for the next opportunity.
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The information contained here is educational, may not be typical, and does not guarantee returns. Background, education, effort, and application will affect your experience and the profitability of any business. Individual results may vary.
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