Preparing Your Logistics Company To Sell

Whether selling is on your near-term horizon, a distant possibility, or not even on your mind at all, the insights shared today could significantly impact how you run your business.

Let's dive into why it's crucial to always be sales-ready and the steps you should take to create a sellable and smoothly operational business.

Matt O’Brien is our guest today and he has had multiple exits as well as acquisitions in the logistics and construction industry and shares his experience.

The Importance of Being Organized

No matter what industry you’re in, organization is key, especially when selling your business. According to Matt, one of the most overlooked yet vital aspects of preparing a logistics business for sale is organization. This means more than just having your financials in order—it encompasses your entire business operation.

Key Organizational Points

• Financials: Ensure your income statement, balance sheet, and tax returns are immaculate. These documents provide a snapshot of your business's financial health.

• Intellectual Property: Digitize and organize driver files, DOT records, truck maintenance logs, and other crucial documents.

• Operational Files: Ensure that information is easy to interpret for a potential buyer. This might include moving from cluttered, endless Excel sheets to more systematic and segmented files.

Consulting with professionals like accountants, mergers and acquisitions attorneys, and brokers well in advance can make a world of difference in the way things are organized and presented.

The Emotional Journey of Selling

Selling a business is not just a transaction; it's an emotional process. Both buyers and sellers invest significant emotional energy into the deal. Sellers, who have often poured years of hard work into their business, find themselves at a crossroads. Buyers, on the other hand, are gearing up to transition this new acquisition as their potential lifelong venture.

The best way to help with the emotions that will come is to have proper expectations. Here’s some common ones:

• Timing: Realize that deals ALWAYS take longer than you expect. In fact, the average SMB transaction typically takes around nine months to close..

• Engagement: The engagement level from both sides—seller and buyer—is crucial for a smooth sale process.

• Sale Price: The bulk of logistics businesses can sell for 2.5 to 3.5 times EBITDA. Obviously this can vary greatly - that’s just the typical.

Unexpected Circumstances and Flexibility

Sometimes, life necessitates a sudden sale. In such cases, flexibility on sale terms can make your business appealing despite not having done all the other preparation recommended in this video.

Conclusion

Preparing your logistics business for sale is a detailed and ongoing process, not a last-minute scramble. By staying organized, consulting experts, and maintaining operational excellence, you can ensure your business is always ready for a potential buyer.

Even if selling isn’t in your immediate plans, running a sale-ready business is beneficial for day-to-day operations. It can make your work life more enjoyable and prepare you for any unforeseen circumstances.