Logistics company owners are constantly pursuing better, faster ways to meet customer needs. This model of continuous improvement has spurred enormous growth, with forecasted increases in growth of 14.8% by 2022. If you own a logistics company, a few simple strategies can make you more appealing to buyers and garner a higher sale price. Addressing these five components of value can greatly increase buyer interest, as well as raise the potential price of selling your logistics business.
In the age of technology, many of us feel a compulsion to have the latest gadgets. The goal of technology is not to keep up with the Joneses. It’s to make life easier. The most strategic companies employ only the technologies necessary to make running the business smoother. Some might want 24/7 tracking and tracing. Others need support for fleet management. The right software can help with a wide range of concerns.
State-of-the-art software can also make clients more accessible. Certain software capabilities can make you more appealing to various clients. So ensure you have current software that works well. This will keep your logistics business organized, impress buyers, and may even help you win new clients.
Logistics is slowly transitioning to much more. Customers now expect full scale consulting on a variety of supply chain issues. Customers love a one-stop shop, so firms that can offer consulting are more adept at retaining customers because they become integrated into the customers’ daily routines. If you can help clients cut expenses, streamline their supply chain, or manage inbound/outbound freight, you bring tremendous value to the table. Buyers want to see that a business is adapting to emerging trends. So movement toward consulting services and a wider array of services will almost always work in your favor.
Establish Clear Standards and Training
A strong team is vital to a well-run logistics business. Create and use a clear, specific training guide that encourages ongoing improvement. This motivates your team and ensures that your business will run like a well-oiled machine. It also makes it easier to replace team members who leave. At minimum, invest in annual training sessions. These boost morale, help your team work better together, and show buyers that you’re serious about offering a quality team.
Client Concentration and Relationships
Strong client relationships are good—up to a point. Buyers who see that a client is loyal to the owner, not the business, may be reluctant to take the plunge. No one wants to lose a client when they buy a new business. Manage your relationships now. If you’re in charge of sales and accounts, it may be time to delegate these roles.
It’s likewise important to ensure that your business is not dependent on a single customer or small group of customers. If one client makes up more than 30% of sales, your business is in dire trouble if that client goes elsewhere. Improving customer concentration can greatly increase value.
You must take a critical look at your business if you want to improve its success. Analyze your supply chain to assess for areas of improvement. Dig deeper. Ask managers and employees for feedback, and look at how they use their time. Are customers satisfied? Are services timely delivered? Is inventory well managed? Identifying your weak points can be tough, but can mean the difference between a mediocre business and a highly successful one. A few small changes can improve customer satisfaction and retention, drive revenues, and offer greater security to potential buyers.
It’s never too early to begin succession planning. Planning for a sale now can shorten the timeline to a successful sale down the line. Take time to evaluate what’s working and what’s not, and make necessary changes now.