While goodwill isn’t something tangible that directly translates into a monetary amount, it’s truly priceless to a business owner. Whether you’re looking for a transportation business for sale or wanting to make sure your business is poised to get top dollar when it’s time for you to sell it, understanding the impact of goodwill is important. What fits into the category of goodwill? It can encompass all kinds of things that can’t be purchased but result from a business owner’s hard work over time: Prime location, cutting-edge equipment, and a strong safety record are big parts of a transportation business owner’s legacy of goodwill.
Prime Location
You know it’s true about real estate, but it can also be significant in the value of a business. If you have a convenient location, your transportation business is much more valuable to potential buyers than a nearly identical company in an out-of-the-way locale. When a centrally located business comes with an established customer base, the price it can achieve is even higher. If, however, the same immaculate fleet, well-trained employees, and pristine operating procedures belong to a company that’s trying to move in on a competitor that could adequately handle the transportation needs of the entire region, then the marketability is not nearly as strong.
Customer Loyalty
In the volatile transition period during which a business changes hands, customers may flee to another already established competitor instead of sticking it out.
However, they may retain their loyalty to the transportation business that has served them well in the past.
Whether goodwill enhances customer loyalty during the changeover process relies on the previous owner’s propensity to micromanage every detail as opposed to delegating. Of course, buyers can try to compensate for inevitable losses by slowly making changes over time and offering well-timed promotional pricing.
Employee Retention
Employees who are treated with respect and kindness enjoy their jobs and feel like they’re part of a team; those kinds of employees provide the kind of customer service that keeps customers coming back.
Like customer loyalty, goodwill here can go one of two ways: It can promote continued feelings of ownership in the company, leading to employee retention, or it can lead to employees leaving along with their stellar boss.
When transportation business owners fill in employees about the new ownership and their confidence in how business will continue to thrive, they’ll be more likely to stay at the job that’s already satisfying to them, even during a change of hands. The result of holding on to an already established team of employees means less time and effort for the new owner, as well as valuable customer retention, as well.
Factors like goodwill are difficult to figure into a business valuation; however, transportation industry specialists at the Tenney Group can help you find a prospective buyer that will recognize the value of the hard work you’ve put into building your transportation business.
Photo credits: Top © virtabo / Fotolia. Middle © mangostock / Fotolia. Bottom © Corepics / Fotolia.
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