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3 Places to Find Hidden Value in a Limousine Business

Last updated on July 8, 2011 by Sozo Staff

When it comes to buying a business, what you see is not always what you get – and that may be a good thing. Assets like property and vehicles are the best known sources of limo business value, but they’re only part of the picture. From a covetable location to a long customer list, some types of worth aren’t so easy to quantify.

For savvy buyers, this hidden value can mean cashing in on an opportunity overlooked by other investors. For sellers, highlighting hidden value can mean a shot at making the deal of a lifetime.

Location

Just like real estate, a limo business is about location, location, location. Territory affects nearly every aspect of business, from type of customers to cost of operations to amount of competition. Purchasing a nearby competitor, for instance, can provide significant and immediate cash flow for an existing limo business owner. When assessing a specific location, ask yourself: Is the business located in a region poised for future growth? Is it situated near a source of steady clients, such as a university or hotel district? Does it have a regional foothold that provides an advantage over competitors?

Resources

A business is only as good as the resources being invested by its owner. Growing and improving a company can require marketing, purchasing, hiring, maintenance, and more. Let’s say that a limo service for sale is suffering from an aging fleet, but has the advantage of a prime location, experienced employees, and an excellent safety reputation. A buyer with a good deal of capital may be able to justify replacing those older vehicles with popular new models. Perhaps a business relies on the closest international airport for much of its business. An international buyer may be able to leverage his resources to attract a demographic of international travelers in addition to U.S. customers.

Customers

Without customers, you don’t have a business. Yet, as any new business owner quickly learns, building a client base takes time and money. You can’t exactly gain trust and brand recognition overnight. However, it is possible to use the respected reputation and brand of an already established limo business to your advantage. In some cases, a buyer may find hidden value in the potential for clients. For a business that happens to be located in a quickly expanding suburban region, for instance, gaining customers may require very little marketing or effort.

Even a struggling business can become a diamond in the rough for a buyer who understands how to tap its unseen value. Ultimately, a company is worth what it has to offer a new owner. An independent business appraisal by an industry professional can illuminate hidden value, paving the way for the right seller to connect with the right buyer.

Filed Under: Transportation

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