What's your Exit Strategy?

Retirement Strategy for Freight Brokers
By Dave Van Otten, President, Freight Tec Management Group, Inc.

How do you get the most money out of your freight brokerage when you decide to Retire? At some point, you will want to retire or leave the business to pursue other opportunities. How will you do this successfully? This short article will give you some ideas of what you need to do to maximize your profit when you sell your business. For a more in depth discussion, please send for our -

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You may have a number of options in selling your business. You could sell to a son or daughter or other relative, a key employee, a competitor, or someone new to the industry. The key is to sell to the person or entity that will take care of the business, keep your customers happy, and continue to provide an income stream for you. Although you may prefer “all cash up front”, these deals are rare and a Buyer will deeply discount the value of your business because of the risk the Buyer will be assuming. Most deals will require some owner involvement over a stated period of time to be sure that the customers transition properly and maintain that critical income stream that is being purchased by the Buyer and is the basis for your Retirement.

If you sell to a son or daughter or other relative, you must first establish that they have ability and the work ethic to successfully run the business. Most do not. In that case, how to you deal with the "family political problem" that arises when your relative expects to take over the business and is not qualified? This is where an experienced solid company can really help you with the backbone of support necessary to help you keep your relative involved while still providing the income stream to you for your Retirement.

Determining a fair price for your business depends on many factors. Buyers do not offer the best price to brokers who have one major customer and a smattering of a few smaller customers. If you deal with large shippers that negotiate annual contracts with their brokers and carriers, you should plan your Retirement to coincide with the renegotiation of the new contracts. Buyers generally do not like heavy concentrations in just one industry unless it is complimentary to their own business in some way. Therefore, to maximize your sales price, you should strive for sufficient diversity so that if one customer does not transition, it does not ruin the Buyer’s income stream and your Retirement.

Although it is best to plan your Retirement Strategy over a period of several years to maximize your Retirement Income Stream, what happens if you need to retire NOW? Whatever the reason, Freight Tec can move quickly to help you Retire now. We take pride in our ability to react quickly and to be flexible to make things happen timely for you. Feel free to contact me anytime.

Sincerely,

Dave Van Otten, President
Freight Tec Management Group, Inc.
190 N. Main Street, Suite 225
Bountiful, UT 84010
(801) 298-7722