Sell My Trucking Company

Selling a trucking company in California is hard work. If you are thinking to yourself, “I wonder how to sell my transportation company for the best profit,” this article is for you. It takes a lot of time and hard work for these sales to happen where both buyer and seller are pleased. This is by no means a magic solution for selling a transportation company, but we hope these tips will get you started.

If you own a lower to middle market transportation and logistics business in California and are looking to sell your trucking and transportation business for the best price, there are a few things you might want to take into consideration. Below, we have identified five main points to think about.

Step One: Calculate the Value of Your Logistics Business

Potential buyers looking for a logistics company for sale will want an accurate representation of a business’s future earnings. In this section, we will discuss how to value a trucking company.

When thinking about selling your transportation business, there are many factors to incorporate into the valuation of your business. Some factors, like the financial health of your trucking business, are easy to measure, while others, such as managerial experience, are less easily definable. Consider the latter as a qualitative value moving forward.

You can use one of three methods to value your business. The income method looks at your company’s past profits to create a potential earnings forecast. The market method involves using the stock market as a guide. 

This method can be tricky for valuating smaller or privately-owned companies. Lastly, the asset method subtracts the liabilities of your business from the value of your owned assets. This total is referred to as the “adjusted book value.”

You can use online calculators for EBITDA multiples for trucking companies to calculate a helpful valuation for your business. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. EBITDA multiples for logistics companies can be a confusing topic if you are unfamiliar. An M&A advisor or business broker can help with this part (see step five).

Step Two: Increase the Value of Your Trucking Company

Positive cash flow, or high profitability, is key to increasing your business’s value. If your trucking logistics company is making a high profit, it will be much easier to sell.

Set up recurring revenue sources to increase your cash flow.

Of course, having a profitable business is not the only important factor. Ensuring the trucks themselves (tangible assets) are of high quality and running well can significantly increase the value. 

Additionally, you will want to consider things like management strengths and training, your current professional relationships, and repeat customers. Have a good portfolio of intangible positives.

Diversifying your portfolio of clients is a good way to look more attractive to a potential buyer. Having multiple sources of income decreases the risk factor a buyer might feel when thinking about purchasing your trucking business.

Minimize your company’s debt. If your prospective buyer has to pay back loans on the company’s behalf, they will be less likely to want to buy your business. Also, make sure your books are tidy and easy for a new owner to jump right into.

Lastly, be different! Try to find a way to stand out from your competitors. We will discuss more on this below.

Step Three: Build a Sellable Transportation Business

Whether you are starting from the ground up or already have a trucking company started, building a business with selling in mind is always beneficial. If you build a business that someone else wants to buy, you will be successful whether you decide to sell it or not!

Create Structure

Ask yourself the hard questions. Am I relying on one or two big clients to succeed? Is my supply chain sustainable?

Making sure you have a strong base structure for your business will allow it to grow.

Be Memorable

Transportation logistics companies are a dime-a-dozen, and the transportation industry is flooded with small businesses. What makes your services more than just a logistics company? Be a brand, not just a name. Be memorable.

Be Niche

Do you transport anything you can get your hands on, or do you specialize in frozen grocery products? Does every grocery store from San Diego to San Francisco use your services, or are you happy to be hired by Aunt Sally down the road to move her couch?

If you have a target market, you will stand out.

Be Nice!

Perhaps above all, excellent customer service will take you far. We are all human, and we all want to be treated with respect. That includes your customers and will reflect positively on your potential buyer(s).

Step Four: Prepare to Sell Your Growing Trucking Company

So, you have built a trucking business with massive potential for growth, but you think it might be time to move on. Maybe you want to spend more time with your adult children who have interests of their own. Perhaps you want to retire. Whatever the reason, here is how to prepare your business to say goodbye to you and hello to someone new.

Whoever is going to buy your business is not Googling “trucking company for sale near me.” You will need to do the legwork to find your buyer.

Research potential buyers that might be looking for trucking companies for sale in California and outside of the state. What kinds of companies might be interested in purchasing your well-oiled machine?

Look at your competitors, companies with similar but not the same services, and even businesses that could just use portions of your business (i.e., employees or trucks).

You might even keep an eye out for another freight brokerage for sale, absentee trucking business for sale, transportation business for sale, logistics business for sale, or trucking companies for sale by owner. You can use them as examples for what to do and what not to do and see if they have any potential buyers you can tap into. Consider striking up professional relationships with these types of companies to gain inside knowledge. Remember, this is a slow game.

Create a list of these companies or individuals with pros and cons. Be realistic here. What would they think of your business as an outsider looking in? Try to take emotions out of the equation here. This is where a business broker or mergers and acquisitions advisor can be helpful. More on that in step five.

Get to know the companies and people on your list. Is there a way that you can interact with these businesses on a professional scale before trying to conduct the sale of your trucking company? Could you become their client? Could they become yours?

Remember your valuation in step one. Be prepared with how much you would like to sell for so you are not caught off guard! It can be intimidating to answer the question of “How much?” if you do not have a specific dollar range already in mind.

Finally, keep a list of people you want to notify if you do get an offer. Basically, you want to be able to tell all other prospective buyers that you might go off the market soon, in case they want to make you a better offer. A mergers and acquisitions broker can help with this as well.

Step Five: Consider a Mergers and Acquisitions Broker

Did you read everything we have gone over so far and feel like your head is spinning? A transportation and logistics M&A (mergers and acquisitions) advisor or business intermediary will hold your hand through the entire process, from valuation to executing the sale of your trucking business. M&A advisors and business brokers alike work with sell-side logistics. In other words, their bread and butter are “how to sell logistics.”

Mergers and acquisitions in the logistics industry happen all the time. The difference between an M&A transport  advisor and a business broker for logistics mergers and acquisitions relies on the size of your business. Brokers work with small businesses. Professional mergers and acquisitions intermediaries work with large-scale companies or complicated mergers, and even overseas businesses.

Because they have the incentive to help you sell, good transportation and logistics advisors will:

• Provide you with helpful advice before, during, and after the sale of your business.
• Help you value your trucking and logistics business.
• Help to grow your business prior to preparing for its sale.
• Find potential buyers for your business and communicate with them on your behalf.
• Create or edit a sound exit strategy and timeline.

Timing is Everything When Selling a Trucking Company

Selling your trucking and transportation business is no easy task, especially for a small business owner. Take your time with the above tips first to build a growing business that you are proud of for maximum success.

Starting with these tips for increasing your logistics and trucking company's value is the perfect way to establish a powerful foundation for unprecedented success in the acquisition process. Leverage this opportunity to showcase the full potential of your business and take your acquisition prospects to new heights.

If you are a retiring business owner looking to exit your lower middle market trucking business in California, here are six tips to get you started:

1. Don't wait until the last minute to start planning your exit. The process of selling a lower middle market trucking business can take a long time, so it's important to start early.

2. Have a clear idea of what you want to get out of the sale. Know your goals and what you're willing to negotiate.

3.  Know what's your company's worth. This is an essential step to take when planning to sell your trucking and logistics business company in California.

4. Choose the right type of buyer. Not all buyers are created equal, so do your research and find the right one for your business.

5. Be prepared for a lot of due diligence. M&A buy-side due diligence is when buyers will want to know everything about your business, so be ready to provide documentation and answer questions.

6. Be flexible with the terms and conditions of the deal. It's important to be open to  negotiation to get the best possible deal for your business.

Rogerson Business Services, also known as, California's lower middle market business broker is a sell-side M&A advisory firm that has closed hundreds of lower middle-market deals in California. We are dedicated to helping our clients maximize value and achieve their desired outcomes. 

We have a deep understanding of the Californian market and an extensive network of buyers, which allows us to get the best possible price for our clients. We also provide comprehensive support throughout the entire process, from initial valuation to post-closing integration. 

Our hands-on approach and commitment to our client's success set us apart from other firms in the industry. If you consider selling your lower middle market transportation business, we would be honored to help you navigate the process and realize your goals.

If you have decided to value and then sell your lower middle market transportation and trucking company or still not ready, get started here, or call toll-free 1-844-414-9600 and leave a voice message with your question and get it answered within 24 hours. The deal team is spearheaded by Andrew Rogerson, Certified M&A Advisor, he will personally review and understand your pain point/s and prioritize your inquiry with Rogerson Business Services, RBS Advisor

Go to the next article: Part of a guide to help sell transportation and trucking company in California series ->

More Tips to Help Sell a Lower Middle Market Trucking Company in California