As long-time players in transportation business sales, the Tenney Group has seen many business owners make a pivotal mistake: waiting out the competition instead of making an offer early on. While waiting for a struggling competitor to completely bottom out may well allow you to purchase the company for less, it may not be the most financially savvy strategy, overall. By waiting, you risk several potential pitfalls.
First, while you’re waiting for an ailing company to completely die out, you risk having another investor beat you to the deal. Not only does this eliminate the potential for your business to grow by leaps and bounds, but it also adds considerable new local competition into the mix. After all, someone willing to make such an investment likely intends to put in the effort to see it grow. That possibility could mean less business for your own company over the next decade, making the difference in what you would have paid and what you were hoping to pay an insignificant amount.
Second, you may well regret it if you pass up a rare opportunity to merge with or buy out another transportation business. By buying up a competitor, you stand to gain more than added assets and revenue: You eliminate some competition. The synergy that comes with a competing business can be invaluable to your original company. Before you bypass such an opportunity, you’ll want to consult with some professionals and carefully weigh the pros and cons.
Third, you need to be cautious and well-informed when it comes to the risks involved. Liabilities like financing, transaction fees, and risk of failure. However, these kinds of vulnerabilities may be nothing in comparison to the risk of passing up a unique opportunity for expansion. By researching current rates and market trends, you can reduce the amount of risk that you’re assuming; ultimately, though, all progress requires a certain degree of insecurity, at first. But often, when you take the leap after careful consideration, success is waiting for you, just around the corner.
If you decide not to even consider buying up the company in question or wait too long, you’ll never know what could have been. However, if you at least do your homework and secure valuation and other industry-respected expert services by the Tenney Group, you can at least make an informed, responsible decision you won’t look back at and regret.
Buying an additional business is a big step, and it shouldn’t be taken prematurely or unadvisedly; but that doesn’t mean that it should not be taken. Sometimes people say that you most often regret things you didn’t do, instead of risks you take. Especially if you tend to “err on the side of caution,” getting the opinion of a third party can really help you see whether you should consider making a business deal.