John Sloan – Vice Chairman, Allegiance Capital

What is your fleet really worth? Whatever a potential buyer is willing to pay. But there are ways to increase the value of your company in perceptions and desires of the buyer.

Recently, we sold a telecommunications company for $7 million dollars more than even the owners thought it was worth. How? The owners had established a solid reputation of on time and on budget project delivery with large clients that had resulted in long-term contracts. These contracts, and their great reputation, limited their competition and enhanced their opportunity for future growth.

Here are the seven things you need to excite a buyer about your fleet operation.

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1. A Scalable Business

The systems and procedures you use to operate must be relatively easy to duplicate in other locations or to serve a larger customer base. Efficiency is the key. The more customers you can serve the more profitable and attractive your fleet business will be. Remember – think big! Investors want to expand your operations to boost sales.  Scalability definitely impacts company value.

2. A Steady Revenue Stream

Ideally, this includes long-term contracts with established customers and a steady growth rate that ensures sales will continue to remain steady and have the potential to increase in the future. Companies with a broad and diverse customer base are more valuable. Their revenue stream is more stable and less susceptible to market fluctuations. The opposite is also true. Fleets that depend upon one or two large customers are worth less than those with a diversified customer base.

3. Proprietary Technology

Technology or proven processes that you own provides you a competitive advantage and increases company value, because it sets your company apart from the competition and would provide new owners the same advantage. Always be looking for ways to improve efficiency and reduce costs without impacting quality of service.

4. Intellectual Property

Owning patent rights can provide a big boost in company value, especially if the patent is the key to securing future sales. Often corporate buyers seek out smaller companies who own patents to purchase to provide the acquirer an advantage in the larger market.

Intellectual property is unique in fleet operations. However, if you have invented a unique piece of equipment that improves efficiency, get it patented. It will add to your fleet operation’s value.  

5. Brand Recognition

Branding is built across time. However, effective marketing and great customer service are two keys to building a company brand that adds value. Your brand should always represent: quality customer service, efficiency and reliability.

Remember branding is much more than the logo on your trucks.  It should consistently flow through everything your company does, from how your employees interact with customers to the way you maintain your fleet and how you communicate across all media.

6. Irreplaceable Employees

Employees with highly desirable skills, or sales teams with well-established connections boost company values, because those skills and connections will enable the buyer to be more competitive and ideally use the connections to expand sales.

With today’s driver shortage, valuable fleets are using unique ways to attract and maintain their most precious resource – employees. Great employees drive more than trucks. They drive your company value.

7. Competitive Advantage

Identify what sets you apart from your competitors. It may be a unique location, service, reporting system, etc. Then you can use that advantage to win more customers and build value.

Potential buyers are interested in your company for a specific reason. Once you know what they are most interested in, you can enhance that ability or characteristic to increase company value. Investors are looking for well-managed, successful companies that have set themselves apart from the competition. Investors seek out companies that will immediately add value and profitability to their portfolio or raise their corporate performance. Market to these demands and you will sell your fleet operation fast and at a great profit.

This blog post is done in partnership with Fleetowner, John Sloan, Vice Chairman at Allegiance Capital, is a featured investment banker on IdeaXchange launched by