Many transportation business owners make the mistake of assuming their business’ value. They may be determining the value based on what they purchased the company for years ago, the price of their inventory new, and what similar businesses sell for. However, they may be surprised to learn that the actual value is significantly different. Getting your transportation business appraised is important for a number of reasons including:
1) Unexpected Events
Because you can never be absolutely sure what tomorrow may bring, having an accurate, up to date sense of the value of your transportation business can ensure your future business intentions are fulfilled. If an untimely death occurs, would your family or business partners know how to handle your business? Would they be aware of your intentions? Having your business valued is the first step in preparing a written plan or estate settlement that your family can refer to.
2) Plan for an Exit
You may be planning to sell your transportation business in a few years. You think that you can increase profit over the next 2 years and in turn receive high purchase offers. However, you may be surprised to find that waiting to sell may not be your best option. During the valuation, you may find that your business is not worth what you assumed it was. It may be better to sell now rather than incur further loses.
3) Divorce or Partner Buy Out
You may be in the midst of a messy divorce or partner buy out. Negotiations may be at a standstill because one party is unrealistic about the value of the business. Perhaps your spouse feels her share of the business is worth a lot more than it really is. She may be asking an unrealistic buy out price from you. Emotions may run high and the sale may end up in conflict for several months. A business valuation will determine exactly what your transportation company is worth, allowing for a quicker resolve.
4) Selling Plateau
You may have your transportation company listed for sale for several months without receiving any offers. Many business owners assume the value of their company and can overestimate by as much as 50-200%. If you are asking an unrealistic price, you may remain on the market for months or longer. You will lose money and get frustrated after several months without offers. Getting a valuation will ensure that your asking price is fair, reasonable, and current with the economy. It will significantly increase your chances of selling your business for a fair price in a shorter amount of time.
It may seem like an obvious reason for a business valuation, but many sellers make the mistake of listing their business at an assumed price. They may be devastated when their business doesn’t sell or when it sells for a significantly lower price. If you are selling your transportation business, an accurate valuation will ensure that you are realistic in your asking price.
Getting a business valuation is beneficial to a transportation company in many ways. It doesn’t necessarily have to be just for owners interested in selling. It can be for owners who are active in planning for future opportunities or unexpected events. Choose an industry specialized business broker that can apply formulas and experience to arrive at the most accurate, current valuation.