To better serve their customers and increase productivity, supply chain and logistics company owners are always looking to improve their processes. The supply chain and logistics sector has expanded rapidly thanks to the “kaizen” (or “continuous improvement”) strategy that underpins its success. There are several sub-industries that make up the supply chain and logistics sector, with transportation being among the most important.
Consider the following advice if you run a trucking, freight forwarding, or freight brokerage company and are interested in selling your business.
There are tens of thousands of third-party logistics companies in the United States that specialize in air freight, intermodal transportation, and trucking, making the transportation business a veritable behemoth in the economy. On average, transport businesses have just four staff members and a gross profit margin of 7.7 percent. Freight forwarding companies, like many others, benefit from operating in a dynamic field because of the many chances they have to expand and increase their profits. The rise of China and India as leading producers of electronics has created new opportunities for international trade. The availability of such cutting-edge software means that you could expand your role in the logistics industry beyond that of mere shipper to include that of supply-chain consultant. If you own a company in the transportation sector and are thinking about selling it, the first thing you should do is determine how much it is now worth. One of the best, most reliable, methods to determine this is by using a business broker, who has the experience and insight to determine the best approach towards determining your value to potential buyers.
Technology Upgrades
In our technological era, just when you believe you have the most recent program or device, a newer and improved version is released. Because technology is designed to simplify our lives and is such a powerful asset to any enterprise, this can be both irritating and insightful. It might be difficult to narrow down the finest Logistics & Supply Chain technologies for your firm, given the sheer variety of options available. In order to meet the demands of your customers, you must first pinpoint your weaknesses. Can you provide your clients with real-time monitoring and tracking? Perhaps you require fleet management support. There is software out there that will help you get better at it and leveraging that software will always increase your company’s value.
One further perk of using cutting-edge software is that it makes you more available to customers. Businesses typically have strict guidelines for working with outside vendors, with particular software capabilities generally dictating who receives transportation bids. Having modern, all-encompassing software will do wonders for your business, from improving efficiency to attracting more customers and increasing the value of your product in the eyes of potential purchasers.
Consulting Services
Freight brokerage businesses now manage all areas of the supply chain for customers, marking a significant shift in the Logistics industry beyond simple outsourced shipping. What began as a simple freight transportation service has expanded into a full outsourced transportation division, and its popularity among clients is certain. Consulting services provided by transportation companies increase the likelihood of client retention since the services become routinely used. Consulting services for supply chains and logistics may help businesses save money, streamline operations, and better manage incoming and outgoing shipments. If your company hasn’t hopped on the bandwagon of providing a comprehensive service, you might be leaving money on the table. Providing a comprehensive suite of supply chain management services not only makes it possible to attract new customers and bring you closer to existing ones, but also demonstrates to potential buyers that you can keep up with shifting market demands. If a company can show that it has adapted to meet the needs of the market, potential customers will be more inclined to make a purchase.
Set Standards & Train
It’s important for everyone on your team to share a commitment to excellent customer service, low operating expenses, and maximum output if your company is to thrive. You could boost your company’s chances of success by developing and using a comprehensive training manual that encourages the constant addition of new skills and knowledge by your employees. By setting an example from the top, you can inspire your entire team to work together toward a common objective. However, if your superiors aren’t on board, their reports won’t be, too. Holding training and team building workshops twice a year can help your company stay competitive and develop the bonds between employees. When prospective buyers visit your company, they will be pleased by your well-oiled machine that runs well even when you’re not there.
Client Relationships & Concentration
The loss of a major customer after acquiring a company is every buyer’s worst dread because the relationship was established by the previous owner. Managing customer connections is an important first step if selling your business is on your agenda for the next 12 months. Business owners often have to take on many roles, and if you find yourself in the Sales role, you may want to address this issue. Assign accounts to seasoned account managers and progressively remove yourself from sales well in advance of trying to sell your company. The sooner they start, the less disruption there will be during the handover to the new owner, and the less anxiety there will be about losing accounts because of ties. Your customer concentrations are another part of sales that may need some work. Look at your sales and revenue to see whether you’re relying too heavily on any one client. If you want to make your firm more appealing to potential buyers, you should work to reduce any uneven concentrations of business from a few large clients.
KPIs
Maintaining a routine of regular business analysis is essential. If you want to know how well your business is performing and what areas require development, you need to examine your supply chain on a regular basis. As soon as you see any drops, you should investigate more to learn why. Do you think workers and supervisors make good use of their time? Are customers happy and satisfied with the service they receive? How well and how accurate is inventory being managed? Discuss your problems with the higher-ups and figure out how to fix them. Productivity, customer happiness, inventory accuracy, and security will all improve after the solutions have been deployed.
We hope these suggestions have been helpful if you’ve been contemplating succession planning and potential exit plans for your logistics company. But finding out how much your transportation company is worth is the first step if you are considering selling it, and we can provide you with that information and give you the confidence in getting the most possible when it’s time to sell your business. Considering these measures now will allow you to improve the sale price when the perfect moment arrives for you to sell, even if that is six months to a year from now. Considering these measures now will allow you to improve the sale price when the perfect moment arrives for you to sell, even if that is six months to a year from now.
For more information on how we can help with this process, give us a call at 1 (888) 415-5118.