From time to time I see an advert in the back of Commercial Motor which says “Newly formed transport company for sale”.
There are no other details, other than a contact number, and I’ve always wondered what this is all about. It seems fairly obvious that the person who set up the transport company did so simply to sell it as soon as it was formed, but why would anybody buy such a company instead of just setting one up themselves?
I’m thinking “maybe they are hoping to sell it to somebody who is disqualified from acting as a company director” but as I understand it, the buyer would need to inform the TC of the change in company ownership so that wouldn’t really work.
How much would one of these “newly formed transport companies” sell for? I’m planning to sell my own company in 2-3 years time, with an established trading history, good credit record and OCRS score, how much could I sell that for?
I suppose if you really wanted to know, you could pick up the phone and give then a call. It might be something as simple as a registered business name, or some legal type has set up a PLC. ( May be there could be a container contract ) lol lol…
Many years ago a " mate" of mine told me he had sold his business which I thought was a bit odd. All I knew he had was a van and a rented warehouse ( old shed ) he also had a bit of client base as well, but as far as I knew none of them were locked into any kind of contract.
Personally I couldn’t really see what he had to sell, after all it’s a free market and who was to say if the customers were going to stay with his old company after the new management had taken over.
It would be different if you had a lot of machinery or land/building, but I don’t see how you can sell customer loyalty.
After said “friend” got the money for the business he sold, he started again doing the same thing, which was a lot easier as he now had a bit of capital, then poached back most of his old customers.
'Ive dealt with a various businesses that have changes management, some haven’t been to bad but some I found to be right bunch of wa#@$*s, so I went else where. Free market, I’m only loyal to my own wallet.
Seen the same adds Harry, also adds looking to buy.
There are formulars for calculating the value of a business, your accountant will know.
True value though is what someone is willing to pay.
A company is only worth what its contracts are worth, so if you’re sub contracting for somebody and are doing a job that almost anybody can do. I.E. you have no specialist equipment or skills, then the company will only be worth the sum of its assets.
Operator’s Licences and credit ratings are not transferable, well they are, sort of, but repute follows you in both cases and you will still have to meet certain criteria, so it isn’t an easy way in at all.
Buying an existing company that doesn’t have a contract for some decent work would, IMHO, be a complete waste of time and money.
I tend to agree with all of the above, but still these adverts appear, and advertising in CM can’t be cheap, neither is setting up a transport company, so presumably the person advertising the company for sale must think he can show a profit. I just can’t see where.
I remember back in the day, very often in CM it was quite common to see a truck trailer, international permits, and work for sale.
It wasn’t unusual to see an old F86 going with permits and work for a ridiculous amount of money. That was obviously a very different kind of deal. So Mr Monk I think you’ll have to get on the phone and find out what this person is actually about, I’m curious!!!
As you say Jeff, a different kettle of fish when permits were the order of the day, especially the much coveted books. Now that any Tomaz, Richardovi or Egor can carve up the job a permit is as much use as mudflaps on a tortoise…
Although you have been able to buy ready made companies from Exchange and Mart etc for over fifty years. I think these haulage companies for sale are more to do with Transport Consultants who advertised freely as Transport Managers and CPC holders. Something I have objected strongly to in Commercial Motor, Motor Transport and these forums for a long time.
Wheel Nut:
Although you have been able to buy ready made companies from Exchange and Mart etc for over fifty years. I think these haulage companies for sale are more to do with Transport Consultants who advertised freely as Transport Managers and CPC holders. Something I have objected strongly to in Commercial Motor, Motor Transport and these forums for a long time.
I suspect you’re right. What exactly do you think is being offered for sale though? It can’t just be a ready-made Limited Company, I set up my own Ltd Co online, it took about 20 minutes and cost £11.99, I can’t see anyone paying somebody else to do that.
I’m assuming that it is the whole shebang, a Ltd Co with an Operator’s Licence that hasn’t started trading yet? I’ve been tempted to phone one of these numbers and ask for more info but suspect that I would quickly be identified as a tyre kicker.
I do know that sometimes Company A will buy Company B, even though Company B operates from a rented yard, with lease-hired trucks, has no tangible assets, and carries out non-contract work, sometimes for a substantial sum of money. I’m planning my own exit strategy 2-3 years down the line and if I could sell the company c/w Operator’s Licence and credit rating as well as just the truck then that would be a bonus.
gets very difficult /impossible to sell it as a going concern though harry and you have said you are wanting to do exhibition work in Europe which may be a bit different…when I finished with trucks all I could seem to do was sell off the trucks. ■■■■ all else …
cliffystephens:
gets very difficult /impossible to sell it as a going concern though harry and you have said you are wanting to do exhibition work in Europe which may be a bit different…when I finished with trucks all I could seem to do was sell off the trucks. [zb] all else …
I suspect you are right, and at the end of the day I’ll get maybe £5,000 for the truck and diddly-squat else! But that doesn’t stop me wondering what these occasional adverts in CM are all about…
cliffystephens:
gets very difficult /impossible to sell it as a going concern though harry and you have said you are wanting to do exhibition work in Europe which may be a bit different…when I finished with trucks all I could seem to do was sell off the trucks. [zb] all else …
I suspect you are right, and at the end of the day I’ll get maybe £5,000 for the truck and diddly-squat else! But that doesn’t stop me wondering what these occasional adverts in CM are all about…
I think they appeal to the haven’t got a clue brigade, they believe all the nonsense about carrying over credit ratings and the like, which is possible if you buy an established business, but in the dark world of O/Ds it wouldn’t amount to much.
If you bought a firm like Gregorys it would be a different story, the history and reputation would come with it, but not (& I don’t mean to offend) a company like Southern Star.
You may have a decent score for credit and a green light with VOSA, but would that be worth anything in the real world? If you can achieve it in a couple of years, so can the potential buyer, so it would need to be cheap to make it worthwhile.
Still, it may give you a few extra bob, so it’s definitely worth looking in too
Lets say you have a wedge of cash and are looking to invest it, A guy on the golf course happens to mention that his present haulier is a waste of time and needs to look elsewhere. You and he have a meeting, You agree a rate and you can lay your hands on several lorries and trailers. The thing standing in the way is an o’licence.
You buy the Ltd company complete with an o’licence for the usual £30k and start trading within a week. Otherwise it’ll take several months and the loss of maybe £500,000 in turnover and probably the loss of the contract.
limeyphil:
Lets say you have a wedge of cash and are looking to invest it, A guy on the golf course happens to mention that his present haulier is a waste of time and needs to look elsewhere. You and he have a meeting, You agree a rate and you can lay your hands on several lorries and trailers. The thing standing in the way is an o’licence.
You buy the Ltd company complete with an o’licence for the usual £30k and start trading within a week. Otherwise it’ll take several months and the loss of maybe £500,000 in turnover and probably the loss of the contract.
O licence is non transferable althouh id imagine the traffic commisioner would grant interimauthority as long as nin of the directors were dubious
If you buy the company then the licence is not being transferred, as long as you have the required Dinars in the bank and a CPC holder, you are all set.
In fact there’s a period of grace regarding a transport manager, so with the right amount of money you could do it and operate without any delay at all.
However, this would only make any sense when buying an existing business, a business with a long history, a good reputation, contracted work and a good chance of getting back every penny it costs you in the first few years.
You won’t get that from buying a company that had an old two grand banger on chinese remoulds and no contracted work, so we go back to the beginning again, unless it’s a solvent company with good long term contracts then it’s a waste of time and money
limeyphil:
Lets say you have a wedge of cash and are looking to invest it, A guy on the golf course happens to mention that his present haulier is a waste of time and needs to look elsewhere. You and he have a meeting, You agree a rate and you can lay your hands on several lorries and trailers. The thing standing in the way is an o’licence.
You buy the Ltd company complete with an o’licence for the usual £30k and start trading within a week. Otherwise it’ll take several months and the loss of maybe £500,000 in turnover and probably the loss of the contract.
O licence is non transferable althouh id imagine the traffic commisioner would grant interimauthority as long as nin of the directors were dubious
I think Paul (Repton) went for an interim licence and it took about 3 or 4 months to be granted. I don’t think he was particularly dubious either.
I know what your saying but i think if its a going concern rather than new start things can be different.
I know from when ive read in cm if a firm goes bust and another is willing to take a contract on the tc can be flexible in keeping the vehicles on the road.
