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5 Different Situations in Which Business Valuations Are Required for Trucking Companies

June 11, 2011 By Sozo Staff Leave a Comment

A trucking business valuation will be an important tool in nearly every business decision you will make. But while you can visit Zillow.com for an estimate of your home’s value, obtaining an accurate business value is not quite so straightforward. Whether you are planning to expand your company, put your trucking business for sale, or retain your fair share of your business during a divorce, receiving a professional business valuation from an industry expert can help you reach your goals.

Buying or Selling

Many sellers and buyers make the mistake of estimating their business value based on similar trucking companies. But size and structure are only part of a company’s worth. Market outlook, earnings, management organization, and even business reputation are just a few of the many complex factors that determine ultimate value. Receiving a trucking business valuation from a third party industry expert is the best way to make sure you reach the right decision when it comes time to sell your business or grow your company through acquisition.

Financing

Lenders don’t loan money out of the kindness of their hearts, but because they expect to be paid back – and hopefully earn a return in the process. Increasingly, this means banks and investors want to see an independent business valuation before approving a credit line or business loan. Whether you’re seeking funding to launch a new business or expand your existing transportation logistics company, having a market valuation completed prior to approaching a lender can put you ahead of the game.

Divorce

Planning for a divorce probably doesn’t top your list of favorite pastimes, but the national average divorce rate indicates it will become a necessity for half of married people. A business is most likely your biggest marital asset, and you and your spouse may come up with two radically different numbers when attempting to value it on your own. With most divorcing couples already dealing with attorney’s fees, alimony, and custody agreements (not to mention emotional distress), bickering over your business can turn an already tense situation into a nightmare. Receiving a professional valuation from a broker, particularly one familiar with the intricacies of the trucking industry, can ensure that at least one aspect of the divorce settlement proceeds quickly and smoothly.

Ownership Transfer

It’s inevitable: every business owner must someday hand over the reins. If an owner isn’t planning on selling, the only other option is succession planning. Whether you are buying out a business partner, giving up your share of a business, or making plans to hand your company over to a son or daughter, a successful ownership transfer requires an understanding of value. Disagreements over value can strain relationships and result in expensive court battles. As with a divorce, an impartial valuation can turn an otherwise-contentious transition into a smooth process.

Strategic Planning

From planning your entry into a market to readying for your exit, strategic business decisions require an understanding of value. Maybe you’re not ready to put your freight hauling business for sale today, but know you’d like to retire in another decade. If you don’t know how much your business is worth now, how can expect to reach your retirement goals 10 years from now? Just as a home assessment can help you determine which home improvement projects will add most value, a business assessment will help you weigh risks and rewards as you reinvest in your company.

Filed Under: Transportation

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