You wouldn’t make a million dollar purchase without doing some research first. Why should you attempt a life-changing sale without doing the same? When your trucking business is a primary source of income, maximizing your closing price is crucial. Educating yourself far in advance of a sale can lay the groundwork for a smooth transaction and a rewarding price.
1. Minimize Surprises
Many unprepared owners fail to factor in the amount of time it takes to sell a business or the potentially high taxes from a business sale. Knowing what to expect can help you avoid unpleasant transaction surprises. Professionals with trucking industry experience such as intermediaries, transaction attorneys, or accountants can be invaluable sources of information.
2. Enhance Value
Determining the value of your business is essential to making a successful sale. But when you have your business appraised early in the game, you also give yourself time to improve that value. Valuing a trucking business has the power to illuminate strengths and weaknesses. This information can help an owner make decisions about value-enhancing investments months or years before going to market.
3. Get to Know Your Buyers
Speaking of value, knowing your buyers can allow you to focus your value enhancement efforts. Do you have the earnings to appeal to a financial buyer looking for immediate cash flow? You may want to take this time to grow your business. Meanwhile, recasting your financial statements can show true owner benefit by adding back in the seller’s discretionary earnings that your accountant may have removed to minimize tax liability. Is your potential for synergies your strongest selling point? Improving your assets and customer relationships may help attract strategic buyers.
4. Get Your Books in Order
Buyers need to clearly see how a business will boost their bottom line. If you aren’t prepared with organized financial documentation, your best buyer could be making an offer on another company while you’re scrambling to finish paperwork. Having your books in order means you’ll be ready to go if a buyer comes knocking. In the meantime, good organization may improve management and operations, which can enhance value.
5. Protect Confidentiality
A poorly-planned transaction leaves too much room for error. If knowledge of a sale goes public, it can impact relationships with employees, customers, and suppliers and provide an advantage to competitors. Learning tactics for protecting confidentiality can maintain a controlled environment you need to make a fair deal.
6. Maintain Control
You never really know when you’re going to have to put your trucking or tanker business for sale. Many owners sell when they are blindsided by illness, partner disputes, or divorce. If they’re lucky, they might sell when a buyer makes an unsolicited offer. Either way, being uneducated about the sales process leaves an owner vulnerable. Readying your business in advance can lessen the risk that you’ll have to accept a low offer out of desperation.
7. Establish Intermediary Relationship
When you have established relationships with trusted transaction advisors and industry specialists in place, you can rest assured knowing you have the expert counsel to properly prepare your business for a sale – whether that sale happens years down the road or arises unexpectedly tomorrow.