Based on a change in federal law (Public Law 109-59), New York state is no longer requiring motor carriers to display state highway use tax stickers or to carry state highway use tax permits in their vehicles. Stickers no longer will be provided with the permits, but carriers should keep the permits to assist them in filing highway use tax returns.
Truckers in California’s San Diego County using the 10-mile South Bay Expressway – set to open this summer – will pay $11.25. For a four-wheeler, the expressway will cost $3.50 when using a FasTrak transponder and $3.75 if paying cash. South Bay Expressway Ltd. – a division of Sydney, Australia-based Macquarie Infrastructure Group – is building the road. After 35 years, ownership of the road will shift to the California Department of Transportation.
U.S. Environmental Protection Agency will pay $50,000 toward retrofitting diesel trucks in Wisconsin with anti-idling devices. The grant for the Wisconsin Department of Commerce is part of EPA’s Region 5 Midwest Clean Diesel Initiative. The retrofit cost per truck ranges from about $2,000 for diesel oxidation catalysts to about $12,000 for diesel particulate filters.
Fleet One announced that an additional 192 maintenance sites joined its Fleet One Local acceptance network. The new sites are Econo Lube N’ Tune & Brakes, which recently was purchased by Driven Brands, formerly Meineke Holding Co. Meineke already contracts with Fleet One to provide fuel cards.
Change is the law of life. And those who look only to the past or present are certain to miss the future.
– John F. Kennedy
For the owner of a trucking company, truer words were never spoken. The industry is constantly in a state of flux, and an owner who fails to anticipate change is a sitting duck. Even getting out of the industry requires foresight. Successfully selling a business – or buying one, for that matter – is a process that should be spread out over several years.
If you think that you may find yourself – whether it’s tomorrow or 20 years from now – in a position where you want to buy or sell a business, start planning for it now. After all, even if you eventually decide not to sell, you will have strengthened your business model and fixed inefficient practices in your operation. Those are worthy outcomes in their own right.
Sadly, most fleet owners fail to complete the legwork necessary to properly sell their businesses, and in the end, they are only costing themselves money.
Buying and Selling 101
You have heard people say that buying or selling a home likely will be the biggest transaction you will make. Forget it. That’s a walk in the park compared to buying or selling a business.
David Freeman, a director with Capital Resource Partners (website) – a transportation industry investment banking firm – has guided a number of companies through the arduous process of either buying or selling a trucking company. Freeman’s clients – with annual revenues typically ranging from $5 million to $100 million – conduct sale-of-business transactions that sometimes are so complex that they take several years to complete. Along with his partner, Jay Taylor, Freeman facilitates the often-lengthy transactions between trucking company buyer and seller.
“The client looking to sell is typically someone with a major life event approaching,” Freeman says. “Be it a health crisis, an impending retirement – it’s usually people with a solid exit strategy.” Big round-number birthdays also generate plenty of discussion about succession planning, he says.
Freeman advises his clients to research and prepare at least two or three years before executing the sale of a business. “It’s important to take the time and evaluate where the company stands financially, and then move forward with a potential sale, which will typically take anywhere from nine to 15 months to complete,” he says.
Although there are no concrete rules, Freeman offers some guidelines for buyers and sellers:
* Evaluate margins and improve them. “This is probably the most critical issue in relation to the value of a company. No one wants to buy a business that is capital-intensive that yields low profits.”
* Evaluate debt. “High debt is a value killer. I would advise any business owners to be prudent about taking on new debt for the sake of growth.”
* Safety, safety, safety. “More and more buyers are concerned with safety issues within a company. If you let your drivers go over 70 miles per hour, that is going to turn off a lot of potential buyers.”
* Evaluate the equipment market. “You have to know where the business is in terms of truck value. For example, 2000 to 2001 was not a time to sell. There was too much capacity and not enough freight. It’s important to catch the market just as it’s about to swing in your favor.”
* Evaluate commitment.”When considering a sale, it’s important to know that all of the management team, not just the owner, is on board. The deal has to have the full support of all involved, or it will eventually fall apart.”
* Details, details, details.”What is your lane density? Is your OR 90 or 95? It’s impossible to know too much about your business.”
* Asset-based vs. non-asset-based. “Typically, non-asset-based companies will draw interest from third-party logistics firms or brokers. Conversely, asset-based companies will draw interest from strategic buyers – or trucking companies that buy other trucking companies. Just like you would know your market on the road, it’s vital to know the market for your business.”
Many business owners are too busy to look far enough into the future to ensure long-term success. Winging it will work only for so long.
Even if you have no plans to sell your company whatsoever, it never hurts to be prepared, in the event that just such a circumstance arrives. As journalist George Will once said, “The future has a way of arriving unannounced.”
In business as in life, good things happen to prepared people.