A Trucking and Logistics Company provides a wide array of services including LTL Shipping, moving, junk removal, etc. Trucking and logistics companies work with trucks and a logistics team that coordinates operations.
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 and Logistics Company business worth?
If you have just decided to sell your Trucking and Logistics Company, then before setting your asking price we recommend that you:
- Gather all financial information from three years and compile it into a report. It’s essential that you provide potential buyers with financial data that justifies the asking valuation.
- 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 financials because of them.
Make sure you can answer the following questions:
- 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 and Logistics Company business worth more?
The number of trucks, employees, long distance jobs and growth potential are some aspects that makes your Trucking and Logistics Company business worth more.
Additionally, you will be viewed more positively if you utilize technology to coordinate routes and security. But here are some metrics that generally defined what can further improve 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
- Volume 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 and Logistics Company business sell for?
Since 2005, there has 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 3x, which means the average asking price is almost 3 times higher than average gross income, and the 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 2018 there has been more $250-500k deals than the former.
Anyway, the most frequent deal size, also known as mode, is $500k, one of the highest in the United States.
Is the Trucking and Logistics Company market getting bigger?
Yes! Only 2013 was better than 2018 when it comes to total transaction value. Last year, there was more than $46 million in Trucking and Logistics Company deals.
In 2017, there were $39 million and in 2016, $25 million. So it’s correct to predict that 2019 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 2018 for instance, those which were sold for less than $250k had a 1.97x multiple, while $1-2 million had a multiple higher than 5.5x.
In 2017 the same happened, but the lowest multiple was among $250-500k deals (2.84x) and the highest, in the $2-10 million, with an incredibly high multiple of 16.55x.
What states have the most Trucking and Logistics Company business deals?
California and Florida are large states that have many trucking and Logistics Company sales. 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 your decisions afterwards.
How long will it take to sell your Trucking and Logistics Company 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 9 to 12 months, but you can also see deals getting closed in 3 to 6 months depending on the opportunity.
What is the process of selling your Trucking and Logistics Company business?
This step by step process will provide clarity and give you confidence to list your business. 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.
How should I sell my trucking and Logistics 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 trucking and Logistics 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 trucking and Logistics 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 trucking and Logistics business, check out:
How much will it cost to sell my trucking and Logistics business?
Generally a business broker will charge 8-12% of the sales price of an trucking and Logistics 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%
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?
2018 was also a pretty good year for that kind of business, and 2019 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!