Many large corporations are laying off highly paid employees that are now searching for a new industry to enter that will still provide enough money to continue their lifestyles. Some of these employees may consider starting up their own business. However, start up costs and risks are high. They may consider purchasing an existing company that has had years to build up a customer database and has proved successful.
For an entrepreneur looking to enter the transportation industry, purchasing an existing limousine or trucking company may lead to a greater chance of success. Consider these five key aspects before you start creating a company from scratch:
Proven Business History
Nine out of ten new businesses will fail in the first five years. In the limousine industry, many of these new businesses will fail within the first year or two. By purchasing an existing company, you are not only purchasing existing inventory and vehicles, but also a proven business strategy. When starting a new business, trial and error is a necessary but costly investment. One trial method may prove beneficial, while another may be damaging enough to close your doors. An existing company has already experienced trial and error which has lead them to develop a business that has the proper strategies, procedures, and rules in place to succeed.
One of the main perks of buying a limo company over starting out from scratch is existing customers. Chances are if you purchase a limo company that has a good reputation and strong client list, those same customers will continue to utilize your services. When you start out from scratch, you may spend months or even years trying to build up a strong client list. The key is maintaining a reputable name for the company. If you continue to offer the same quality service that the existing customers have grown to depend on, your chances of success greatly increase.
A new owner may think that an advertisement in the newspaper and the phone book are all it takes to market the business. However, a strong marketing strategy will factor in years of proven success in a variety of marketing venues. The existing company may rely strongly on specific marketing techniques that have shown results. By purchasing an existing company, you are also gaining a marketing approach that has already been proven successful.
Room to Improve
You may feel that starting your own business from scratch is the only way to attain pride in having a company to call your own. The previous owners have already done the difficult tasks of trial and error and creating a large client list. However, you still have the important task of maintaining and even improving the business. You may offer fresh insight into customer service procedures or maintenance routines. There is always room for improvement in the company. You can take pride in further improving the business.
Many new owners of the transportation business have little to no experience in this industry. They may be entrepreneurs that have had success in another business and feel that owning a limousine company could be their next big venture. However, starting a limousine business is not as easy as buying some cars and posting an advertisement in the yellow pages. Many times when you purchase an existing company, you will start a relationship with the previous owner. He/She can offer invaluable insight into what it takes to succeed. Often times, the previous owner may continue to work for your company. Having someone on your team that has extensive experience will increase your chance of success.
When you are ready to enter into the transportation industry, seriously consider purchasing an existing company that has had years to test and improve its methods.
The Tenney Group has been facilitating transactions of transportation businesses for over thirty-five years, specializing in business sales, mergers, acquisitions, and post-transaction services. We have experience dealing with a wide variety of companies in the ground transportation industry, including trucking, freight hauling, ambulance, school bus, and limousine businesses. Contact Spencer Tenney at the Tenney Group for expert assistance when buying or selling a transportation company.