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Old 09-07-2011, 12:24 AM   #1
XDCX
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Default Welcome Performance Brokerage Services



I'd like to welcome Performance Brokerage Services to the forum.

Performance Brokerage Services is a full-line dealership broker that provides services to both buyers and sellers. Most important, they have the experience and skill-set to construct deals in today's complex and challenging marketplace. Their website can be found here: Performance Brokerage Services

I've asked the firm's President, Mr. Moshe Stopnitzky, to join this thread and provide us with more information about the services his firm provides.
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Old 09-07-2011, 11:30 PM   #2
Moshe @ Performance Brokerage Services
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Performance Brokerage Services is pleased to be invited to this forum to answer any questions that you may have, as well as share with you our vast experience in all aspects of buying and selling new car dealerships, including opinions from our national network of automotive accountants and attorneys.

With offices in Utah, New Jersey and our Corporate office in Irvine, California, we have consummated well over 300 transactions in the past 20 years. So far, 2011 has been a great year for us, as we are on pace to close on well over a dozen transactions.

Performance Brokerage Services offers intermediary services for car dealers, buyers and sellers, based on a success fee only. No upfront fees and no reimbursement of cost.

We all experienced the earthquake that took place over the last three years in our industry, as the mergers and acquisitions came to a screeching halt. The credit market was frozen. General Motors and Chrysler went into bankruptcy. Many floor-plan lenders ran for the hills, despite flooring the same dealers for prior years. Additionally, coming off a banner year of retail sales totaling almost 18M units, manufacturers went on to hard-press the dealers to retrofit their facilities.

Like many of you fellow dealers, we had to find a way to make it through the difficult times. Performance Brokerage Services adapted its business model to desperately needed changes in the brokerage and intermediary services: unstable business valuations, larger gaps between sellers’ expectations and buyers’ willingness to pay the price, a substantial decline in dealership real estate values, realignment of franchises, manufacturers’ facility requirements, and lack of business financing including new and used vehicle flooring. And to top it all off, the brokerage fees became unrealistically high and often got in the way of the deal!

Bottom line, the automotive industry was in shambles, as well as the buy/sell environment.

Moving forward in today’s environment - the national dealership roof-top count as well as the dealer head-count, decreased by as much as 30%. That left the remaining dealers with an increased trade area. Frankly, nothing in our business remained the same, and with the realignment and termination of franchises, there is a tremendous opportunity for other brands to fill the vacuum. Who would have guessed that the three brands that are experiencing the biggest growth in market share from 2010 to 2011 would be Kia (36%), Hyundai (33%) and Chrysler (27%)? Hyundai and Kia (and Subaru) are commanding premiums never seen before. Three of our last closings were Subaru dealerships, and you would be surprised to know the premiums that the Subaru franchise was able to bring. Overall we are experiencing a dramatic uptick in buy/sell activity, valuations have stabilized and goodwill has returned.

We can go on and on discussing our experience in the trenches. So, we invite you to contact us to get acquainted, for an assessment of the current market conditions in general, or for a private discussion regarding a specific situation you may be currently experiencing or contemplating. You can always drop us a note in this forum or send us a private message, and we will respond promptly.

Confidentiality is the cornerstone of our business. All discussions and communications with our company will be held in the strictest confidence. No exceptions!

We know you have a choice. We want to earn your business. We pledge to do it right. Every time. One client at a time.

Have a great and successful 2011.

Talk to you soon.

Last edited by Moshe @ Performance Brokerage Services; 09-07-2011 at 11:35 PM.
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Old 09-08-2011, 12:29 PM   #3
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Mr. Stopnitzky, thanks for providing us with an overview of the services your firm provides and your perspective on the current market. It's great to have you on the forum.

I reviewed your website last night and was very impressed by the following excerpt:
You would think that the brokerage community would have been forced to change with the times as well.

But it did not. Wedded and stubbornly grounded in old business models, it did not respond quickly enough or not at all, in many cases. Unsurprisingly, it remained rigid and slow to react. The brokerage community is notorious for over promising and under delivering. Brokers were grabbing as many clients as they could, and while trying to serve too many, were unable to give the client/project the attention it deserved. And to top it all off, the fees became unrealistically high and often got in the way of the deal!
One of the smartest dealers I ever knew (Nick Cutter) once commented that he rarely used brokers because in his experience the fees often became a deal-breaker. It's refreshing to see that Performance Brokerage Services sees this issue from the dealer's perspective and has the flexibility required to get deals done.
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Old 09-14-2011, 01:08 AM   #4
Moshe @ Performance Brokerage Services
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You mentioned Nick Cutter in your comments above. Ironically Nick Cutter used the brokerage services of my late partner for over 20 years.

Brokerage fees, if reasonable, should never prevent a deal from happening. This is just an old myth and frankly, an excuse used by a weak and unmotivated buyer, not to proceed with a deal. How many times have you heard of deals that fell apart and brokers were not even involved…? Deals fall apart for dozens of other reasons.

We have been working as an intermediaries/brokers/consultants in the automotive industry for over 20 years. We have consummated nationally well over 300 successful transactions. Naturally, we have also seen hundreds of deals that did not materialized. We have never had a deal fall apart over brokerage fees!

A motivated seller and a motivated buyer come to terms! They push and shove and posture for better position and/or leverage, but ultimately reach an agreement. Quite often they do so with the help of a seasoned broker.

If the brokerage fee is reasonable, it is simply a fee for service. A service, that if done diligently, will more often than not, save a deal from unraveling; service that adds urgency to the process; service that educates the (often) inexperience principals, accountants and attorneys as to what is customary; service that creates a win-win atmosphere to help the negotiations along; service that prevents alienation from creeping into the process because of the principals’ egos and emotions.

At times the legal and accounting fees are higher than brokerage fees – do they stop the deals from closing? Environmental issues and cleanup costs of contaminated soils are enormous at times - they don’t stop deals from happening. Manufacturers’ demands for facilities upgrades are often in excess of millions of dollars - they don’t stop the deals from taking place. How can brokerage fees be the cause of deals fall apart? Once in a while we hear a buyer complaining about the fees. From our experience of working in the trenches, that buyer was not sufficiently qualified or tried to “steal” a dealership or simply was not motivated enough for whatever reason.

At a risk of sounding self-serving – if you are considering buying or selling a dealership, you should surround yourself with a team of three professionals: an automotive attorney, an automotive accountant and a seasoned broker.

Last edited by Moshe @ Performance Brokerage Services; 09-14-2011 at 01:23 AM.
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Old 09-14-2011, 03:56 PM   #5
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Quote:
Originally Posted by Performance Brokerage Services View Post
You mentioned Nick Cutter in your comments above. Ironically Nick Cutter used the brokerage services of my late partner for over 20 years.
Wow, it's a small world.

Nick Cutter is without question one of the smartest, most strategic dealer principals I've ever met in my life and I've had a chance to meet hundreds of dealers. It's great to learn that your late partner did business with Nick for over 20 years.

Quote:
Originally Posted by Performance Brokerage Services View Post
At a risk of sounding self-serving if you are considering buying or selling a dealership, you should surround yourself with a team of three professionals: an automotive attorney, an automotive accountant and a seasoned broker.
I don't think that's self-serving, I think it's sound advice and that's why I'm happy that you and your firm are on the forum.

I can recall a single point Jeep dealer who sold his store to the neighboring Chrysler/Plymouth dealer for $5,000 Blue Sky plus parts and tools. The deal was struck over lunch and the agreement was written on the back of a paper napkin. This was back in the early 1990s and the Jeep dealer clearly left $250K to $500K on the table because he didn't hire a broker.

I can also think of instances where a person who was buying a dealership made costly mistakes because they didn't have the benefit of a broker's guidance.
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