As many sellers begin the process of selling their transportation company, they often have a few important questions on their mind. They may be wondering who exactly is looking to purchase a limousine, bus, or trucking company. They may also be questioning how exactly to market their sale to the broadest audience but still keep the sale confidential from competitors. They may also question if they should seek professional guidance from a broker or third party intermediary and how exactly they will help the sale along.
Who will know your business is for sale?
You want to be sure that you market your business to a very broad range of prospective buyers. Information such as a general location, key sale points, the annual sales and profit, and some highlights of the business should be used. While you want your business to have wide exposure, it is also important for you to keep the details of the sale confidential. You wouldn’t want your competitor to catch wind of your possible sale. Be sure that the third party intermediary that you choose has set provisions and guidelines in place to protect your confidentiality. Brokers allow the seller to pre-authorize any type of marketing tool that will reach the public.
Going even further to protect the seller’s confidentiality, brokers often will set requirements for prospective buyers. They must provide proof of funds before details that are specific to the business are released to them. They must also sign a confidentiality agreement. If the buyer is really serious about this business, then he/she will wish to view this comprehensive list that may include the company’s assets, equipment, inventory, etc. If the buyer isn’t serious, then they tend to drop out of the acquisition at this time. All of these steps ensure that the seller’s confidentiality is protected.
Beyond the broker’s control, a seller may leak details of the sale to friends or family members. If word of the sale gets out due to statements made by the seller, there is little that a broker can do. Sellers should consider what may happen when rumors begin flying around. The competition, employees, and even prospective buyers should all be considered.
Why hire a broker/intermediary and what are they going to do?
A lot of sellers make the mistake of not hiring a broker or intermediary. This can make the entire sales process more complicated and stressful. The actual value of the company may be completely different in a owner’s viewpoint. By hiring a third party intermediary, a seller can acquire a professional, accurate and up to date value of his/her company. This can save time, money, and a lot of unnecessary stress.
A business broker will use several different marketing tools and channels to give your company exposure. They will use traditional channels such as mailing lists, telemarketing, and even existing buyer databases. They should also take advantage of modern channels, such as e-marketing and social media sites. They will also look to their own website, the IBBA website, and other listing sites.
By using modern and traditional channels, the broker will reach a wide range of prospective buyers. While all of these methods may offer a comprehensive approach, an experienced transportation industry broker will realize that the most prospective buyers are often the ones who aren’t even looking to purchase. Many times, the companies that will benefit the most from a business growth, expansion, or venture are the ones to market to. They may not realize it, but the third party intermediary can emphasis their potential growth and success from a purchase.
A third party intermediary may spend a great deal of time identifying and marketing toward the “best” buyer. These buyers are often inexperienced in the sales process and may even be first time purchasers. Brokers usually will spend time showing this prospective buyer how the acquisition of your business is going to be beneficial and make them money. By marketing to individuals that will gain the most from purchasing your business, brokers can offer guidance, education, and trust and quickly justify them purchasing your business.
Be sure to use a third party intermediary that will market your business in a way that will ensure a fast, pleasant sale. An experienced broker or intermediary will know who your “best” buyer could be. They will develop a marketing strategy and package to educate the prospective buyer on the rewards of expanding or purchasing a transportation business. Every successful sale depends on a similar marketing strategy.
Tackling the marketing strategy, confidentiality issues, and valuation on your own is not the way to handle a possible sale. Rather, seek guidance from a skilled transportation industry broker.
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.