Traveling can be stressful, whether traveling alone or in groups, transportation businesses are a very popular and great solution for traveling. Transportation businesses are great for day trips, overnight trips, or just a ride back from the airport, and rides can be in anything from a towne car, to a limo to a bus. And after your last client is dropped off safely at their destination, you often find yourself wondering, “What is my Transportation business worth?”.
A broker can help you find the answer to that question, but understanding the process is always beneficial to you as an owner. After all, your objective is to receive the maximum value for it, and in order to do that, you must first look at the many variables that come into consideration when looking at the possibility of selling your Transportation business.
In order to show you the different variables, we have taken data from the last decade of all the Transportation businesses sold in the United States that met our criteria, and broken it down for your further review in order for you to make a solid decision on the sale of your business.
What is your Transportation business worth?
The value of your transportation business is correlative to your individual business, the market and what potential buyers are willing to pay. Transportation businesses offer a specific service, so being on top of your game is essential. But while you are trying to figure out how much your business is worth, here are some questions that should be answered before trying to value the price of your business.
- 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 transportation business worth more?
When a buyer looks at purchasing your business, they are basically looking at their rate of return on their investment. So when will they recover what they have spent on the business? In order to show the prospective buyer that their ROI will be high and their relative risk will be low, you should have the a few key characteristics associated with your transportation business.
And while it is true that the profit and sales are considered very important aspects when considering to purchase a business, they are not the only factors that can add or decrease the value of your business. The following characteristics will give your business better 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
- Growth potential
What does the average Transportation business sell for?
Looking at the graph below, the broken down data that we analyzed consisted of businesses that range from $50 thousand to $10 million. And these businesses can sell for as much as billions of dollars or as little as a few thousand. You can clearly see that in the last year, the average transportation business sold in United States for 2.4 times earnings, with the average sale price coming in at $755,378.70. However, to have a clear understanding you also have to look at the median sale at $222,500.00 and the most frequent sale was at $100,000.00, which also plays a factor in your valuation. All this information is a bit overwhelming without being broken down further, so later in this article, we will break down these numbers and give you the information needed to be able to start the selling process.
What is the most frequent deal size?
Since we live in an economy that has a market that fluctuates on a daily basis, pinpointing the exact answer to this question, is not as easy as it seems. However, if you look at the data collected, the most frequently sized deal is tied between the $0-250k and $250-$500k ranges, although as you can see there are plenty of businesses sold at prices outside of these ranges.
For example in 2015 there were 10 Transportation business sold that were in the 0-$250k range, but when you look at the $250-$500k range, there were 4 transportation business sold. But no need to worry if your business does not fall into either of those valuation ranges, there is a buyer for every business size, finding that buyer is the key. And in order to find that buyer, we suggest finding the right broker to help..
Is the Transportation business market getting bigger?
There will always be fluctuations in the market and trends. Transportation businesses are essential in the travel world. We as a country, enjoy traveling and our business men and women are constantly traveling, which in turn will mean they will need transportation. But regardless of the fluctuations, being able to keep your business stable during those times will give future buyers the assurance that your Transportation business is a good investment and buy.
Are bigger businesses worth more?
Generally speaking, yes, the bigger your business, the more that it is worth. Take a look at the image below, as there is an increase in revenue, your multiple becomes higher, which helps generate a better return on your personal investment.
To help you understand the graph a little better, look at the multiple from 2015 for the valuation price range of $0-250k range, here the average multiple lands right at 1.71, with a total of 10 transportation businesses sold, however when you look at the $1-2 Million range in 2015 your multiple jumps to 2.46, with 1 transportation business sold. Clearly stating that the larger business with a larger multiple and less businesses sold is worth more than a multitude of smaller businesses.
What states have the most Transportation business business deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? Florida and California tie for the most amount of Transportation businesses sold. Florida and California are two large states which will give you an easier search for a buyer. But having a business in a smaller state with less sales does not mean that someone isn’t looking to start a business venture in your neck of the woods. Having a broker to help you find a buyer for your transportation business no matter what state you are in, can help you successfully sell your business.
Why would you sell in the first place?
When deciding to sell your business, it can become an overwhelming and difficult decision. Your reasons will always be different from the business owner next door. Maybe you are ready to retire, or you are ready to move on to a mew venture. Whatever your reason is, be sure that you have the necessary knowledge and tools to get the value out of your business that you are looking for.
How long will it take to sell your Transportation business?
There is not one set timeline for the sale of any business. The variables of the individual business and terms of the sale will define how long it will take to sell. Do keep in mind that generally speaking, the larger the deal (over $1 million) take longer to sell, over the smaller deal (under $200k) because of the complexity of the business, in addition to the risk of purchasing a company that large for the buyer. And try to remember, that your individual business will always sell at a different pace than other transportation businesses, and being patient is an essential part in selling.
What is the process of selling your transportation business?
Our step by step process will help you become more confident, when you decide to sell your Transportation business. Many business owners forget or overlook essential steps in the selling process and sometimes become confused and lost throughout the process. Doing each and everyone one of these steps will help guide you to the maximum profit of the sale of your business. If you have questions or concerns about your business’ value or the process in itself please contact us and we will be happy to help.
Who will buy your business?
Finding a buyer can be frustrating and feel like a never ending search, but finding one is essential for the sale of your business. Tuck that frustration and fear aside because there are many options and possibilities. Buyers can range from first time buyers, experienced entrepreneurs, or private equity companies. No matter what the size or maturity of your business there is a buyer for your business, and we can help you find them.
How should I sell my Transportation business?
Marketplaces – (under $500k yearly profit)
Smaller business and micro-businesses are usually best sold privately by the owner through forums or classified websites.
To sell your Transportation business, check out:
Broker/M&A Advisor – ($500k – $10m yearly profit)
Medium sized businesses in the $100k-$20m are best sold through brokers who help with finding buyers, negotiating and structuring the deal. To sell your Transportation business, check out:
Investment Banks – (Over $10m yearly profit)
Larger businesses are best sold through investment banks or merger and acquisition companies. To sell your Transportation business, check out:
How much will it cost to sell my Transportation business?
Generally a business broker will charge 8-12% of the sales price of an Transportation business including inventory depending on the deal size. Larger deals attract a smaller fee. Below is a range of fees at each deal value level.
- Under $1m – 12%
- $1m -$4m – 10%
- $4m -$10m – 8%
- $10m -$25m – 6%
- $25m + – 4%
After reading this article and understanding the necessary steps and processes that come along with the sale of your transportation business, and you’ve decided that selling your business is the right decision, we encourage you to have your transportation business valuated by a professional broker, this will ensure that you are receiving maximum value for your business. We understand that your transportation business is your everything, and we always keep that in mind, when valuing your business. So when trying to answer that question of what is your business worth, comparing it to the business in the next town over, will not get you the exact answers you seek. When you are ready to take the first step, we will be more than happy to help you find the true value of your business, and can help accelerate the sale, by helping you find the right buyer as well. Feel free to fill out our valuation form and get started right away.