A Trucking and Logistics Company is nothing more than a moving company or, as it’s also called, a removal firm, which works basically with trucks and a logistics team that coordinates staff.
Assembling and disassembling of furniture, packing and taking special care with fragile objects are among some of Trucking and Logistics Company activities as well.
A Trucking and Logistics Company may function in short or long distances, which depends mostly on the company’s size and its presence in other states.
Therefore, to run a business like this it is not an easy task. Besides, the Trucking and Logistics Company owner must always be in contact with his employees and staff, and can be responsible for high priced goods. So when it comes to selling it, there is plenty to be taken into consideration.
Take a look at the tips below and learn how to sell your business for maximum value.
What is your Trucking Company worth?
If you have just decided to sell your Trucking and Logistics Company, first you need to attempt to at least two aspects before setting your asking price:
- Gather all finance information from the past years and compile it into a report. It’s essential that you provide interested and potential buyers with finance data that justified why you deserve to sell your business for the best value.
- Get to know the competition around you. Explain potential buyers how other Trucking and Logistics Companies work and if there’s been any harm in your finances because of them.
Make sure you have all the information the following metrics require:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Trucking business worth more?
The number of trucks, employees, long distance removings and growth potential are some aspects that makes your Trucking and Logistics Company business worth more.
And if you make use of technology to coordinate routes and security, better. But here are some metrics that generally defined what can improve even more your business value:
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
What does the average Trucking business sell for?
Since 2005, there’ve been at least 357 trucking and logistics companies acquired in the United States. As you can see, deal sizes are usually high. It’s not by chance total transaction value is almost $300 million!
Average multiple is almost 3, which means the average asking price is almost 3 times higher than average gross income, and average sales price is pretty high: $836k.
What is the most frequent deal size?
Despite this huge average sales price, most of deal sizes are less than $250k, even though in 2015 there’ve been more $250-500k deals than the first.
Anyway, the most frequent deal size, also known as mode, is $500k, one of the highest in the United States.
Is the Logistics market getting bigger?
Yes! Only 2008 was better than 2015 when it comes to total transaction value. Last year, there’ve been more than $46 million in Trucking and Logistics Company deals.
In 2014, there were $39 million and in 2013, $25 million. So it’s correct to predict that 2016 is going to be a really good year for businesses like these.
Are bigger businesses worth more?
If you take a look at the chart, you’ll see, despite a few exceptions, that generally bigger businesses are worth more.
In 2015 for instance, those which were sold for less than $250k had a 1.97 multiple, while $1-2 million had a multiple higher than 5.5.
In 2014 the same happened, but the lowest multiple was among $250-500k deals (2.84) and the highest, in the $2-10 million, with an incredible rate of 16.55.
What states have the most Trucking business deals?
California and Florida are definitely the best states to sell your trucking and logistics company. But there are also a few more states which can be great places to close a deal too, such as Texas, Pennsylvania, Illinois, Georgia, Connecticut and Arizona.
Why would you sell in the first place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How long will it take to sell your business?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
What is the process of selling your business?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who will buy your business?
If you are wondering about the buyers that can be interested in your Trucking and Logistics Company, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the trucking & logistics industry it may likely be a person who already had a store in the field.
There has been more than 350 trucking and logistics companies sold since 2005, and in ten years the total transaction value is almost reaching $300 million mark. Incredible, isn’t it?
2015 was also a pretty good year for that kind of business, and 2016 predictions are even better.
So if you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today! Leave your comments on any doubts or feedback, we are glad to hear your thoughts!