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1/5/2015 4:00:00 AM Write a Letter to the Editor Write a letter to the Editor

Reasons Nobody Wants to Buy Your Company

This Opinion piece appears in the Jan. 5  print edition of Transport Topics. Click here to subscribe today.

By Michael Schwerdtfeger

Managing Director, Chapman Associates

Now is a great time to sell a trucking business. The steady economic uptick and correlating demand for freight has created a shortage of the trucks and quality drivers needed to meet these increasing demands. As a result, large and midsize trucking companies are looking for ways to increase capacity, and many are finding the acquisition of smaller fleets a cost-effective solution.

The problem for potential sellers is that too many owners neglect to implement fundamental business practices that have a direct effect on their company’s marketability and value to prospective buyers. There is a crowded field of owners who, because of that neglect, are merely managing assets rather than a business in the eyes of an acquirer. Common flaws include low-quality drivers, outdated equipment and unsustainable systems — and these shortcomings will directly affect an owner’s ability to sell.

Here’s a brief analysis of how to mitigate those flaws:

Low-Quality Drivers

Quality drivers are currently in short supply, so most buyers will want to make sure they are able to acquire them in any purchase. It is crucial that a business not only possesses a stable of drivers, but it must be one full of quality drivers that the purchaser will be able to retain.

New regulations have complicated how potential buyers define quality drivers. The Federal Motor Carrier Safety Administration is expected to publish an electronic-logging mandate in 2015. This significant change highlights an industrywide safety push.

Some sellers think that rather than complying with new regulations, they can sell instead and make it someone else’s problem. The truth is that buyers do not want to solve regulatory problems any more than sellers do.

If owners do not make drivers comply with the best safety practices, they are not going to be a valuable asset when it comes time to sell.

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