Everyone knows investors don’t like to put all their eggs in one basket. But if you’re selling a trucking business that is dependent on just one or two supplier relationships, that’s essentially what you’re asking buyers to do. Branching out to build relationships with several suppliers reduces risk, both for you and for interested buyers.
Risks and Rewards
Most business owners wouldn’t dream of relying heavily on a single client; if that client were to take their business elsewhere or close up shop, it would be financially devastating. However, relying on a single supplier is not much different. If your sole parts supplier suddenly goes out of business, operations could be all but shut down while you scramble to locate a replacement. If you are planning to put your trucking business for sale, any weaknesses that threaten to cost you time or money are going to be closely scrutinized by buyers and may affect your trucking business valuation.
On the other hand, if a strategic buyer shares the same supplier relationships, your concentrated vendor list may work to your advantage. In this case, acquiring your business may allow a fellow trucking business owner to leverage more volume into a more favorable relationship.
Though there can be risks and rewards associated with having a small pool of loyal trucking suppliers, it is always wise to err on the side of caution and seek stability by cultivating relationships with a list of backup suppliers (not to mention clients). You never know when a product is going to be out of stock or when an unfair price hike might make the cost of staying in a contract unmanageable. Additionally, having more suppliers gives you the upper hand when it comes to market intelligence, from finding out about the latest products to keeping tabs on the competition.
Of course, there’s something to be said for rewarding a consistently competent supplier. If you have a positive partnership with a business, it’s important to maintain this relationship even as you’re adding to your supplier database. A long-term partner may give you a discounted rate or offer to track down a part for you in a pinch.
Ultimately it’s about balance. The most successful businesses insulate themselves with multiple suppliers and customers, yet take the time and energy to make sure each relationship is on good terms. It’s a smart strategy for running your business – and for selling it.