This Quick Guide Will Help You Decide if You Should Buy or Start a Transportation Business
Owning a high-performing business is the dream life for several entrepreneurs. But one of the core decisions that has always been a pressing one for entrepreneurs is deciding whether they should start a business from scratch or buy and develop an existing one.
And although it may look more expensive to buy a transportation business, it’s easier to attract investors and secure financing when buying a business than when starting one.
Every entrepreneur must consider several vital factors before deciding whether buying or starting a transport business is best.
We’ve prepared this simple guide to help determine if you need to purchase or create your transportation business from scratch.
3 Tips to Help Your Decide Between Buying or Starting Your Transportation Company
Consider the Legal Requirements
There are certain legal requirements every transport business must possess, whether getting an operating authority, DOT number, or Unified Carrier Registration; starting your transport business without these licenses not only puts your business at risk of getting shut down, but it also puts you at risk of getting thrown in prison.
But, if you buy an already established transport company, you’ll avoid the long and complicated process of legalizing a new business—especially if you have plans to grow quickly without getting tangled in too many complex legal matters.
Some of these legal areas include:
- Deciding the structure of your business model. Will it be a Sole Proprietorship, General or Limited Liability Partnership, or a Limited Liability Company (LLC)?
- Getting an Employer Identification Number (EIN) or Federal tax ID number
- Transportation licenses and permits like commercial driver’s licenses (CDL), fuel carrier licenses, commercial vehicle registration for any fleet of vehicles, heavy load or cargo permits, and insurance coverage for drivers, passengers, and goods.
- Creating captivating brand name ideas and trademarking them.
The challenge with getting these legal requirements isn’t that they’re difficult and time-consuming to attain, but you’ll be sacrificing precious time to get them. On average, acquiring most of them will take anywhere between a month to six months.
Consider the Strength of its Brand
Strong branding is among the most valuable things any entrepreneur can give their transportation company. Most businesses can change their fleets, drivers, and locations, but as long as they don’t tamper with their brand name and identity, they’ll do just fine.
Entrepreneurs hoping to gain a strong presence in the market always make it their goal to acquire transport businesses with captivating travel company names and trusted brand identities instead of creating one themselves.
Building a captivating brand that customers will love takes time and effort. Not to mention your new business will be competing against well-known transport companies.
One mistake several entrepreneurs and investors make when deciding the value of a brand is basing their entire judgment on the aesthetic and visual features of the brand, like logo, color, picture, and endorsements. Meanwhile, the core value of a business’s brand lies in other elements like its culture, messaging, position, and connection customers have with a brand’s name.
Consider if it Aligns With Your Area of Expertise
When deciding to start or buy a transport business, a good portion of your decision boils down to how well you know your target industry, whether you have the emotional, business, or people skills to grow a new business from scratch or the willingness to learn how to manage an established venture in the transport space.
For transportation business owners looking to expand their business beyond a certain niche, acquiring an established company is an easy way to gain a strong foothold in the new niche without committing years to try to do so.
However, for a fresh person in the sector, building a business from the ground up is a great way to gain the experience and reputation that’ll help you achieve success in the transport sector.
In both cases, the success you’ll eventually achieve will depend on your knowledge of the sector, where your strengths lie, and your understanding of how to leverage them.
Your Greatest Asset
Whether you acquire an existing transport business or build one from scratch, the greatest asset you need is the right leadership skills. Cultivating exemplary leadership skills will help inspire and bolster your employee’s confidence, dedication, and focus.
Without exemplary leadership, it’ll be impossible to establish and adhere to a clear vision and mission for your business, encourage innovation, maintain open communication channels, and set an example yourself.
Grant Polachek is the head of branding for Squadhelp.com, 3X Inc 5000 startup and disruptive naming agency. Squadhelp has reviewed more than 1 million names and curated a collection of the best available names on the web today. They are also the world’s leading crowdsource naming platform, supporting clients from early-stage startups to Fortune 500 companies.
If you’re thinking about retirement or selling your business, working with a broker is a great option. They will help you navigate the process from start to finish and ensure that you get the best possible price for your business. So if you’re ready to take the next step, contact a broker today.
Selling your business is a life-changing event. That’s why it’s essential to plan for this event carefully.
If you’re listing a business for sale in California, you’ll want to find a reliable business brokerage firm. At Rogerson Business Services a team of experienced professionals works to plan and carry out the buying and selling business process in California.
You can also consult with Andrew Rogerson on how to increase your overall value.
List of Resources That You Might Find Helpful
- Selling your business
- Get started on a seven-step process of selling my business.
- Get a business valuation
- Get started on a seven-step process of valuing my business.
- Selling a trucking company
- EBITDA multiples for a trucking company | best calculations
- How to value a logistics company | find a company worth
While we’ve presented plenty of helpful tips on how to buy vs start a business in California, contacting a business broker near you, or preparing a business before putting it up for sale can be the difference between selling your trucking business and almost selling your trucking business.
It is estimated that only 20% of privately held small businesses sell. Increase your odds by getting a professional transportation business broker to assist you.
Mainstreet businesses simply refer to a smaller company considering selling or exiting their business. Examples of main street business exit planning include:
- The seller looking to retire or move into another venture.
- Several buyers may bid against each other, elevating your business’ value.
- You’re more likely to negotiate a higher price when you sell to a competitor as opposed to an outside party.
Additionally, using a Mainstreet business broker can help give you a competitive edge in the market and eliminate or reduce friction points or roadblocks in the selling process.
Is your business worth $3 million and above? See how to exit/sell a business in the lower middle market category.
Considering an exit strategy for your small business, let’s get in touch and we’ll walk you through the process by kick-starting a business valuation.
If you are considering valuing and selling your trucking and logistics business within six to twelve months, give Andrew Rogerson, a certified business broker based in Sacramento, California, a Call on the Toll-Free number at (844) 414-9700 or email him at email@example.com services the whole state of California.
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