To own a trucking company, you can either build it from scratch or purchase an existing company. Though both have their benefits and obstacles, there are many entrepreneurs who prefer to go with acquisition. Now, while you consider acquiring a trucking company there are certain criteria that you need to evaluate before you go ahead with the deal. Based on the tips from Andy Ahern, here are a few suggestions that you must analyze before settling for the best possible deal.
As in most purchases, you need to find out the cost, find its worth and whether or not it suits your pocket. Similarly, in the case of acquiring a trucking company, you need to figure out if the deal is profitable. While purchasing a trucking company, the price will depend on a number of factors. These include land and building, assets, equipment as well as client base and goodwill.
At times, the owners inflate the price of each of these to get a higher price. Whenever you attempt an acquisition you must do a research and be aware of the prices of similar companies in that particular geographic location. Alternatively, you could also take help from a consultancy and get the company evaluated. This will help you to quote the best price.
Before going ahead with the deal, it is very important that you check the assets closely. You are paying a huge price so you need to make sure that all the equipments and assets are in good order. If you are not competent enough, you must hire a professional to check the building, computers, furniture, equipments and also trucks, trailers, loaders and other vehicles. Instead of just going by the inventory, you must check each of these physically. When you are paying a price, you must get each of them in good running condition. Each of them must also clear the inspections for license and safety.
This is as important as the assets if not more. If the company does not have a good reputation or does not have a list of satisfied customers, it is not worth investing. Nevertheless, it is not impossible to build up on a not-so-well reputed company. If you have the expertise, skills and efficient labor, you can achieve success with such a company too. However, the price of such a company will definitely have to be much less as compared to a company with goodwill.
- Operational cost
After finding all the above details, once you are convinced of the takeover, you must carefully study their profit and loss statement to determine whether you can run the business successfully. Of course, there are certain things you can change like switching from salaried to contractual drivers, but there will be other aspects which you cannot change like loans. The total operational cost will determine whether or not you should acquire the trucking company or not.
You can become an entrepreneur by buying an existing trucking company, provided you take professional help from consultants like Andy Ahern and get the best deal for acquisition.
Eli Goodman – who has written 373 posts on Caban Destination.