If you want to own your own small truck business you have two options. You can build it from the bottom up or you can purchase an already established small truck company. Both options have their good things as well as challenges or obstacles that needs to be considered. If you are thinking about purchasing a pre-existing company there are some important considerations that you need to evaluate before deciding if this is your best option.
As with most types of major purchases the value is going to be a major aspect in determining if this is the small enterprise for you. The problem is that with a truck company price factors into many different facets of the company. The price will be based on the equipment, land and buildings, vehicles, assets and business equipment as well as the customer or client base.
The more costly the price of the truck company the more assets the purchase should include. However, the person selling the company may blow up the value of the trucks, equipment, building, land or even the customer base in their value determination. It is important to have a good understanding of the prices for comparable companies easily obtainable in the same general geographic area so you can make an accurate offer. trucking companies in las vegas
It is a good idea to have small truck company valuated by a professional if you are seriously considering a purchase. Business valuators or business appraisers typically charge an appartment fee to give you an accurate assessment of the dollar value of the business in its current state. This includes reviewing the books and inventory on hand plus looking closely at the healthiness of the assets that are going along with the company. This valuation can also be helpful in talking a buying price that may be below the price based on an neutral third party’s report.
Assets and Equipment
It is critical to closely check out all the equipment, especially the big ticket items in the sale. This includes all your capital equipment such as trucks, loaders, trailers, buildings, computers and office equipment. The more costly the item is to replace the more carefully it ought to be examined to determine the actual current condition.
Small truck companies, just like larger companies, should have some effective, accurate and efficient system for listing assets and inventory on hand. Don’t take the database at face value, spend a few days checking to make sure the inventory and asset listing is accurate. All equipment should be in good running condition and able to pass all safety and licensing assessments. Since many people aren’t movement by trade, paying anyone to give the trucks good check is a good idea.
Customer Base and Reputation
Like the inventory and assets, information on the customer base that goes with the company should be easy to get to and readily available. Smaller companies may keep customers on the books for years even if they are not currently using the truck service. Make sure that you check the customer base information with the financial statement to ensure that the customer list isn’t outdated or simply padding with names that are not active clients.
It is also a good idea to randomly call a few of the active clients as well as the exercise-free clients if available. Find out why they continue to use the truck company or why they stopped. Buying a pre-existing truck company means you are also buying their reputation, which can be good or bad. Even if you re-brand the company a bad reputation is hard to shake and it could seriously impact your capacity to recreate old customers until you have a few years of good business under your belt.
Building up a company with a bad or unreliable reputation isn’t impossible, but it needs to be calculated in when determining the actual value of the company and how much you can anticipate earning for the next few years.
Cost Of Operation
When you reach the purpose of seriously considering the company you’ll want full access to their financial statements or profit and loss statements. This should clearly itemize all the costs of accomplishing business including insurance, fuel costs, salaries, mortgage or rent on the building or facility, truck payments, annual repair and service costs and so on.
These statements will be essential in determining if you can make a go of the business given you will probably have to borrow money for the investment. Of course, you may have options to decrease your operating costs by switching from salaried drivers to sub-contracted drivers that may also be owner/operators. It’s its advantages since you pay just the driver after they complete the contract, but it also means you don’t have total control over the driver and the rigs that are which represents your business.
Many small truck businesses are under-insured so it is important to calculate this into your costs of accomplishing business. The good news is that the right insurance can and will protect your business from risk in the event of an accident or injury involving one of your vehicles or drivers.
The loan payment will be an additional cost of operation that the current owner may or may not have. Keep in mind this additional cost should be offset by the existing business since it is impossible to accurately predict how much start up company you will get once you lead.
Buying a pre-existing small truck company is a great option of those trying to join the ranks of business owners. However, just like any investment, it needs to be done using information and help from professionals that understand the truck industry.