A Business So Secure THE OWNER WILL BACK IT financially
Due to the owner’s confidence in the business
, he is prepared, if the buyer wishes, to retain a (suggested) 25% share in the business
for a period of 3-4 years assisting the buyer in growing the business, and working on a part time basis as a driver. This would give the new owner relief when needed, from driving in addition to assistance in attracting new business.
The business has been operating in this indispensable industry for 25 years, and is ideally positioned to take advantage of its projected growth.
Road Transport is one of the largest and most steadily growing industries in Australia. The 2016 NTI Guide (National Transport Insurance Guide) states that despite the decline in the resources sector, annual growth has been 2.4% over the last 5 years. It forecasts that that will increase in the future and that the National freight task will double by 2030 and triple by 2050.
The transport industry is expanding steadily and the financial performance of this business is also expanding steadily the owner has been in the transport industry for over 27 years, has a documented knowledge of the Perth Metro area, and believes in the future of the business.
The business offers a daily pickup and delivery services mostly in the metropolitan area, with same day turnaround and pre-scheduled times. It runs a 12-tonne refrigerated truck with tail lift capable of carrying 14 pallets of produce at any time and 5-1/2 tonne truck, which between them can handle anything from small parcels to pallets weighing over a tonne It’s also capable of substantial lengths of materials. Goods are mostly handled by forklift on and off the trucks.
The business is successful in the market place due to:
- Having procedures in place
- Knowledge of its clients’ needs
- Personalised service
- Well maintained vehicles
- Willingness to co-operate to meet individual client needs.
- Stable relationships with customers
This pricing structure is competitive, when considering the
business offers a daily service. Customers choose the business because it offers excellent customer service and is always contactable throughout a standard business day, providing further surety.
Basing the operational cost aspects of an average day the business has an expenditure of $443,00 and a revenue of $1075,00 this gives the business an average of $732,00 gross profit per day.
A new buyer can grow the business in any direction it sees fit. The opportunity is endless should the new owner wish to canvass new areas to expand the current operation. This opportunity for expansion is one of the key features of the business.
The Opportunity for Expansion = YOU ASK!
- Advertising and promotion.
The business does not have an aggressive advertising plan. Instead, it relies on word of mouth. It therefore would be reasonable to expect that sales and profits would substantially increase by advertising.
- Creating and optimising a website
If the new owners were to commission the creation of a website and have it optimised for search engines this is likely to result in a significant increase in inquiries from new clients. It is an obvious way to immediately start sourcing new business, with very little effort or expense.
The quickest and most effective way to grow the business would be by promoting the business services through direct marketing to new customers. This could be backed by appointing a sales representative to call on customers that are currently not serviced.
Since most of the client base is in the metropolitan area the business could further develop country area sales by visiting potential clients in rural areas and attending expos that take place in the country. Advertising on local radio would also create some interest and raise brand awareness.
- Employment of a sales representative
Since the business does not rely on passing trade it could increase its customer base by employing additional sales representatives.
- Extending the range of transport services
New services could be introduced to complement the existing runs, such as including a southern route. The introduction of diverse types of vehicles to capture completely different markets.
- Product brochure price list
A colour brochure detailing service offerings would be a beneficial sales tool and would most certainly assist in establishing creditability with new customers.
- Improved customer management
The business would benefit from better internal sales follow up. This is a simple and cost-effective way to understand and keep in touch with the market. This would also likely generate more requests for quotes.
- Historical ongoing growth - no matter what the state of the economy
The business has continued to record increases in sales and Gross Profits from inception and on this basis the owner sees no reason why this trend will not continue, especially given the fact that Australia’s increasing population is universally projected to drive increased demand for freight transportation through to at least 2050. And particularly also in view of the most recent forecasts of an upturn in the WA economy.
Products of all kinds will continue to require transportation from ports and airports to distribution centres and thence to retailers and other users, including those in regional areas. While some technological advances may improve the logistics industry, the basic need for trucks and vans to transport products on our roads will continue to be essential to almost every industry sector.
Daily set schedule with enclosed secure loads and a two-tonne tail lifting service.
- Preferred supplier status
The business is in the enviable position of being a preferred supplier to its customers.
- Long established – over 25 years
The business has been servicing the Perth market for some 25 years and during most of that time the demand for its services has exceeded the business’s capacity. With very little sales or marketing effort turnover has continued to grow year on year, purely through reputation and word of mouth.
This keeps overheads to a minimum. And the industry being as large as it is, there has never been a problem to source fresh staff when required.
- No reliance on sales staff to generate sales
The clear majority of sales are simply self-propelled which means that the current owner does not have to spend time canvassing for clients or using company funds as advertising expenditure. However, this also offers a new owner a readily accessible means by which sales could be increased if desired.
- Immediate potential to expand the business
By establishing a set run into southern regions or expand the fleet offering a more diverse payload. A very big advantage to a new owner is that the existing fleet could also generate a lot more profit by being operated for longer hours, using extra drivers. So, a considerable expansion in the volume of business could be achieved without further capital outlay.
- Simple to operate – minimal experience is necessary
The current owner had no industry experience prior to starting the business the new owner’s income requirements will determine how hands-on they are required to be.
- Can be run under management
There is no reason why this business could not be run under management, utilising the current driver. Or it could improve its profit by putting on extra drivers to better utilise the existing trucks working longer hours. However as always, businesses tend to succeed better under the guidance and presence of the owner.
Given the size of the annual turnover, overheads are relatively small.
The business has a complete set of verified accounts which clearly show its profitability.
- High asset mix in purchase price
A high percentage of the purchase price is made up of plant and equipment. Compared to low asset businesses, the business reflects a lower risk and potentially delivers a higher bottom line profit through being able to minimise its tax through claiming depreciation as a non-cash expenditure item on its long-life equipment.
FOR THOSE WHO DON’T WANT TO BUY RISK
...OUTSTANDING Growth Prospects for The Future
…OUTSTANDING HISTORY – Over 25 Years
...OUTSTANDING Gross Profit
… OUTSTANDINGLY -Easy to operate
...OUTSTANDING Business - You’ll Be Convinced When You Read Our 70 Page Report
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Important: Recent analysis of our business sales reflected over 75% of businesses sold were to buyers who registered interest against the business before the report was finalised, which eliminated the need to advertise the business for sale in the media.