Companies and businesses are always seeking ways to increase their value, even if the owner doesn’t plan on selling the business any time soon. For those looking to sell a transportation business, the following tips can go a long way toward making your business more attractive to buyers. For those planning on owning the company for the foreseeable future, it never hurts to increase the value of your business and prepare for unexpected circumstances.
Procedural Manuals, Systems, and Processes
Having the operational protocols of your business in writing and up-to-date is a great chance to increase the value of your transportation company. Buyers look for manuals and processes for several reasons. The first is the ability to measure how effective of the documented process or procedure is in practice in order to refine and improve the process. Buyers appreciate attention to the small details of everyday operations; it shows that the company is running as smoothly as possible. Plus, it improves your bottom line of your company while you’re still running it.
Getting the Most From Current Clients
A recent article in Inc. Magazine featured the story of a business owner who was losing a substantial amount of money each year on a major account. The revenue from this client was substantial, and the owner had two options: free up some monthly cash flow immediately by dropping the account or try to work out a new agreement with the longtime customer. The business owner chose the latter and worked out an agreement that adjusted pricing to the current market standards. While the customer was sad to see the discounts end, he was happy to pay a little more for service he couldn’t find elsewhere. When selling a business, potential buyers will take note of the profits derived from your key customer relationships. Maximizing the profitability of your current customers will increase the value of your business, as will eliminating customers who cost you money.
Accustoming Clients to Multiple Points of Contact and Employee Non-competes
Having your customers develop relationships with multiple points of contact from your business will ensure the stability of those relationships should you decide to sell the business. Buyers assess your company’s existing clients to determine the viability of your business and are reassured in knowing these clients will likely stay with the business through a change in ownership. Also in this vein are non-compete agreements with your employees; potential buyers value companies who are protected against employees leaving and taking clients with them. Both of these steps increase the value of the business.
Keeping Financial Information Up-to-date and Organized
Providing easy access to financial records and statistics allows business owners to quickly make adjustments and improvements to the company’s operations – a valuable ability for interested buyers of your transportation business. This is a relatively simple way of increasing the market value of your company and signals to the buyer that you are serious about the financial health and well being of the company. A buyer won’t expect your company to be perfect and you shouldn’t try to pass it off as such; presenting an accurate portrayal of your finances is enough to increase your company’s value.
Planning for Your Company’s Future
Don’t be intimidated into neglecting your business plan by uncertainty in the economy. Uncertainty in business will always exist, and valuable companies are ones which have developed thorough contingency plans for multiple possible scenarios. A lot of businesses had flaws in their operations that didn’t become evident until the recession hit. Even now, many haven’t taken the steps to determine these underlying problems which are hindering the growth of the company. Planning for the future can help uncover areas of weakness that exist now. Contingency planning is valuable when selling a transportation business and makes your company more appealing than others who claim to be “riding out the storm.”
The Tenney Group has been facilitating transactions of transportation businesses for over thirty-five years, specializing in business sales, mergers, acquisitions, and post-transaction services. We have experience dealing with a wide variety of companies in the ground transportation industry, including trucking, freight hauling, ambulance, school bus, and limousine businesses. Contact Spencer Tenney at the Tenney Group for expert assistance when buying or selling a transportation company.