Newly-unemployed professionals accustomed to a comfortable lifestyle have many options available to them after losing their job. Some start their own business, others find a new job, or they may explore the possibility of purchasing an existing company, which usually carries with it less inherent risk than a start up.
Entrepreneurs entering the transportation business by purchasing an existing company do so because of the established benefits that come with the brand, reputation, and business infrastructure. Here are a few common reasons entrepreneurs buy transportation companies.
Business History and Reputation
90% of new businesses fail within five years. In the transportation industry, most new businesses won’t make it past year one or two. When you purchase an existing company, you’re purchasing a company with not just vehicles and inventory, but a proven strategy for surviving and growing. A company who has already learned from mistakes through trial and error is much more appealing to buyers than a start up with little to no experience in the industry.
Access to Existing Customers
This is one of the great perks of buying an existing transportation company rather than starting from scratch. If you purchase the right company with a strong reputation and business procedures, chances are high that customers will continue to do business with the company. This is especially true if you maintain or improve the level of service provided by the previous owner.
Strong marketing campaigns can take years to grow and evolve to the point where they are highly effective. Existing transportation companies likely have marketing campaigns and data that have been developed over the course of many years. These companies will know what works and what doesn’t, what appeals to clients and what fails to attract new business.
Room to Improve
Sometimes new owners of transportation companies don’t have as much pride in their business as they would by starting from scratch. This is a common occurrence, but one which fades with continued improvement and growth of the business, as well as one’s own unique style being reflected in the company. A new owner can often find areas of improvement that may have been neglected by the previous owners.
While some entrepreneurs may have come from the transportation industry, most have little to no experience with overseeing and growing a transportation company. If you maintain a good working relationship with the seller of the company, he or she can provide valuable insights into what’s needed for the business to be successful. Sometimes the owner may even continue to work for the company. Also, retaining employees is a great way to immediately have a valuable talent pool at your new company.
All of these considerations can be expanded upon and further explained when you hire a professional business broker to assist you in finding the right transportation company to purchase. These brokers are an invaluable resource for making sure you make the right decision.