Some important questions to ask as the company grows might include:
• What next steps are possible after exiting?
• What target price will provide enough after-tax proceeds to fund those next steps?
• Which process improvements, added efficiencies, or scaling efforts will help the company reach that target?
• To what degree should owners incentivize drivers and other key employees?
• What level of investment in new technology, equipment, and data assessment tools is appropriate given the current value versus the long- term valuation goal?
When You Are Ready to Sell
As your exit date draws near, knowing the current value of your company becomes more critical than ever. Questions abound at this exciting time, and each answer depends on the company’s value:
• Are the owner’s retirement expectations realistic?
• Is the timing right? Will selling now meet established financial goals, or is it better to wait another year or two before seeking a buyer?
• If the company will be listed for sale, what is the optimal asking price?
• How much flexibility should owners adopt in negotiations with potential buyers?
• What are the hard numbers to consider in formulating an estate plan?
• How will taxes impact the proceeds available to fund retirement?
Judgment calls are part of life for business owners. But in questions like these, the consequences are too big to rely on gut instinct. Whether it is a sale to insiders or a third-party, family succession, or general business growth, knowing the value of the company helps owners achieve their objectives no matter what path they take.
Learn more about KSM Advantage, a calculation of value report prepared by KSM, to help you gain the insight and intelligence you need to drive good business decisions at every stage of your transportation company’s lifecycle.
By Tim Almack, partner-in-charge of Katz, Sapper & Miller’s Transportation Services Group. Tim helps clients analyze and improve key performance indicators, ensure accurate financial and tax reporting, and utilize resources to increase profitability and company value.
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