Trucking acquisitions might look great on paper, but will they perform? Often times, that depends on the transitional capabilities of the buyer. Remember, making an acquisition is only half the battle. Merging your business practices, processes, and philosophies with those of the seller to ensure the company runs smoothly is the other half. Here are several reasons why your latest trucking acquisition might be a bust.
Too Many Sudden Changes
Businesses thrive on stability. If customers and suppliers notice you enacting changes quickly, they could get scared and jump ship to your competitors. Try to refrain from making too many modifications to fees, management, or location right off the bat. Customers care deeply about continuity of service. Make sure the needs of your clients are met first; then you can start worrying about how to gradually make adjustments necessary to streamline operations or increase profitability.
Not Enough Seller Cooperation
One of the benefits of making an acquisition is that the presence of the seller can serve to reassure customers and employees that, at least to some extent, they are working with the same company. The importance of relationships cannot be overemphasized when acquiring a small trucking business for sale. By taking the seller out of the post-sale equation, buyers fail to maximize this opportunity. If you acquired a flatbed trucking business because it was valuable, remember that it was the seller who created that value.
Failure to Keep Key Members
Trucking is a highly competitive industry. When fees and services are similar to other companies of the same size, it’s often the relationships with members of a management team that differentiate a business from its competitors in the eyes of loyal clients. As a new owner, it’s certainly your right to make hiring decisions. However, it’s helpful to first identify and retain key employees. As they say, if it ain’t broke, don’t fix it.
Poorly Evaluated Processes
Buyers may have researched general operational and business process management systems without closely evaluating the specific systems of the business they acquired. Focusing on financials and management structure is natural when contemplating your purchase of a transport business for sale. However, you also need to know the extent of any inadequacies in your front-end. Problems in day-to-day operations can require an overhaul that ultimately leads to the failure of an acquisition.
Crushed Owner Morale
Workforce morale is critical to your company’s success. Your seller most likely has established close bonds with employees and clients, who will continue to support him or her. Whether or not it is intentional, the way a buyer treats a seller sets the tone for the future of the acquisition. You don’t have to be best of friends, but exhibiting fair-mindedness during negotiations and post-sale can reduce turnover and tension to make for a more pleasant and profitable transition. In any case, a transportation business broker can act as an intermediary to make certain the needs of both parties are comfortably met.