Prospective sellers of transportation businesses should be cautious when putting a company on the market. Sellers of limousine, ambulance, trucking, or other transportation businesses must be on their guard when evaluating offers from potential buyers, especially if the seller is inexperienced in the intricacies of business brokering. Usually, the buyer will quickly gain the upper hand in a deal, leaving the seller in the unenviable position of either accepting a bad deal or starting the process from scratch.
There are a few basic ground rules you can follow as a seller to make sure you get the best deal possible when putting your transportation business up for sale. The following are just a few; if you’re serious about selling your company, it’s highly recommended you hire a professional business broker, ideally one with experience in the transportation industry.
- Deal only with people you trust. This may seem obvious, but a seller’s judgment can play tricks on him or her when the buyer’s money is within grasp. Red flags which may normally make sellers wary of going through with a deal take a backseat to finishing the sale. Don’t get caught up in the moment – if you feel uneasy about the person you’re dealing with or have any reason to distrust the other party, don’t be afraid to take a step back and analyze the situation. Doing so can save you a lot of hassle and money in the future, should the buyer not live up to his or her end of the deal. Economics shouldn’t overrule instincts when selling a transportation business.
- Be realistic when determining the asking price for your transportation business. Sellers, through no fault of their own, often overestimate the worth of their trucking, ambulance, or limousine company. Especially in this economic environment, a company’s actual value may disappoint a seller and prevent him or her from putting the business on the market. Don’t judge your business’ value based on competitors’ business sales – this can quickly skew your view of the value of your transportation company. The basics of valuing a business are set in stone; your business is worth what the market will pay today for your assets, cash flow, revenue streams, and company potential. In order to manage expectations and make wise decisions for your future, consult a professional to estimate the value of your company objectively.
- Don’t become too attached to a buyer’s initial price offer. After a buyer has signed a Letter of Intent (LOI), he or she will often be privy to sensitive information about your company, including customer names, management practices, computer systems, accounting practices, and details of legal issues. The period between a buyer’s initial offer and the closing of a deal can significantly alter the buyer’s view of the value of your company. Initial offer prices from buyers are almost always higher than the closing price. For this reason, it’s important for sellers of transportation businesses to keep in mind that initial offers are most likely inflated.
If selling your ambulance, trucking, or limousine company seems overwhelming, there are experienced business brokers who can help guide your through the process to ensure your company sells at the highest price possible.