- July 27, 2018
- Posted by: Chris Holzgraf
- Category: Buyers and Sellers Hub
As you begin researching FedEx route brokers you may be asking what you will need to begin the conversation. There will be ample opportunities to share details of your operation but the following are common questions that will typically be asked of you on an initial call with a broker.
Size of Your Business
How many routes you own and number of vehicles that support your operation. Are the routes congruent? Is there any outlying territory (i.e. rural routes)? These questions will give the buyer an idea of operational efficiencies.
How many drivers and other employees within the company. How long has each driver been with the company? Do you have a full time or multiple managers? What are the employee salaries? Thorough details of your staff and payroll are important to have prepared. Labor is typically the largest expense for a FedEx business owner so be prepared to walk through this subject in detail with a potential buyer.
The obvious metrics here are gross revenue and profit. A buyer will want to know what the operation brings in each year and more importantly what profit it will yield. A recommendation we make to our clients is to have financials sectioned out per route so it is easier to understand the income and expenses of the business.
A very common question we receive from buyers is if the business can be financed. You should decide if you are interested in providing seller financing as part of the deal. There are pros and cons to this which can be discussed in more detail but know that it is fairly common practice in the route sales market.
A service that we offer to interested sellers is to pre-approve your business for traditional bank financing. Some brokers may tell you that small business loans are not available for FedEx route businesses but we have developed relationships with banks that are familiar with lending to operations in our industry and would be happy to work with you and your buyer to develop a financing strategy.
An effective way to make your business listing more enticing to a buyer is to offer an ongoing training period once the sale is finalized. There is no hard and fast rule on the length or extent of this agreement, but most buyers will appreciate access to the selling authorized officer for a period of at least a few weeks to a month.
These questions will be helpful when starting a conversation with one of our route consultants. Our goal is to understand your business inside and out so we can best present it to potential buyers. Clear and concise data is essential to selling your routes successfully.