Across industries, business owners often face the same categories of struggles and reasons for passing the torch to a new owner. Entrepreneurs come in many shapes and sizes and come into business ownership on different paths and with various goals and aims in view. If you’re a transportation business owner yourself, understanding the reasons most transportation business owners sell can help you create a reasonable exit strategy, and if you’re considering buying a transportation business, doing so can help you make sound decisions regarding when and from whom you purchase your investment.
Reason #1: Planned Retirement
Especially as the Baby Boomer generation nears retirement age, this motivating promises to increase in the next decade. The incentive is fairly obvious: cashing out gives the business owner more free time and financial backing they need to pursue hobbies, travel, or whatever they please.
Transportation business owners who hope to retire comfortably after selling their business may be disappointed, though. As part of the largest generation in American history, the classic law of supply and demand may make achieving expected sale prices difficult. On the flip side, buyers in the market to purchase a transportation business will benefit by a larger pool of businesses for sale as well as more affordable prices.
Reason #2: Personal Circumstances
Even when business owners intend to retain ownership until retirement age, unplanned circumstances can alter their plans. From divorce to illnesses and partner disputes, unexpected issues can come up in either the owner’s personal life or his or her business relationships. Because of the nature of these situations, they often lead to selling without an ideal preparation period or an effective exit strategy in place, so lower-than-usual prices often result.
Because these types of situations are typically unexpected, business owners can plan for the worst by routinely updating their exit strategies and keeping their paperwork organized and accessible so that, in some ways, they’re always ready to sell.
Reason #3: Performance Changes
Sometimes business owners choose their own timeline for selling, while other times personal circumstances, economic downturns, or market changes can determine it for them. While the economy can be a downer for many, prompting them to sell out when they know they won’t enjoy the cash out they had hoped to receive, success can also determine the timeframe for selling.
An entrepreneur may enjoy great success with a small business and yet lack the experience and financial backing to take the business to the next level. Of course, the promise of additional profit may attract the right buyer, often a larger company that can afford to make the needed changes. The good news for sellers of thriving start-ups is that they’re often compensated well for their sale.
If you’re considering selling due to any of the above reasons, transportation business brokers like The Tenney Group can help you enhance value and increase purchase price.