Many trucking companies are asking Tenney Group a serious question. “How do we build value during these uncertain times.” Whether your concern or worry is tied to Covid-19, the election, or the economy, our answer is the same. Focus on what you can control, stay disciplined, and you will get results. Here are three areas you can control that can help you build value right now.

Financial Reporting

They typical trucking business owner dramatically underestimates the influence financial reporting can have on the financial proceeds of a business sale. In a recent deal, our client’s financials and operations were so impressive it literally transformed the way the buyer viewed the business. It became the centerpiece of a collection of companies and was valued accordingly. This resulted in over $15M in additional proceeds to our client. The “wow” to the buyer was based on three factors: 1) the speed at which the operations team could pull reports 2) the depth of team members who understood the value of the reports and who could pull them on demand independent of senior leadership. 3) The accuracy of their historical operational budgets and forecasts. Business value directly ties to risks. Pristine financial reporting eliminates buyer worry and multiplies business value. You can control every part of this. Are you growing in this area right now?

Culture of Growth & Excellence

Do your people feel safe to challenge a leadership position or to present a strategic alternative to the status quo? Do your people have the authority to affect positive change without seeking your permission every time action is required? Do you regularly see your teams openly and passionately fighting for ideas and initiatives that can make the business better? If not, why not? The reason might be simple…. you. You have the key to unlock the answers for thriving during these uncertain times and winning the future in trucking. This is a great season to reevaluate how things are done, to empower every employee to deliver excellence, and to get out of their way. You and your people can’t do special things and you can’t attract special business valuations unless your company culture is engineered to be special. Of the 16 trucking deals we currently represent, all have unique cultures. The companies who consistently demonstrate the characteristics above are attracting the highest valuations – without question. Why? Buyers believe the words of Peter Drucker when it comes to value. “Culture eats strategy for breakfast.” Culture is a powerful value driver you can control. Dedicate yourself to it, and never compromise standards for people in your organization who don’t enhance it.

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Offsetting Rising Expenses

The cost of doing business in the trucking industry is going up. We have clients with insurance renewal increases that have ranged from 30-100% over the past 12 months. Some of these increases have involved no major claims. This is the industry we are in. Though we can’t control the rise in these expenses, we can control how we respond to them. We are seeing many trucking companies using acquisitions as an instrument to offset these rising expenses. Why? Problems of this nature can, in some cases, only be solved with scale. Through economies of scale, trucking companies enhance their purchasing power, eliminate duplicating overhead, and create lane density which reduces overall fleet expense. Together, these forces can neutralize the effects of the unstainable rising costs in the trucking industry. Most importantly, in doing this you will transform the value of your business. Does that mean you have to include acquisitions in your growth strategy moving forward? It does not. Ignoring this option does make the path of offsetting these rising costs much more difficult and less predictable. The takeaway is that you have something in your toolbelt, should you choose to use it, to address the problem right now.

By focusing on what you can control, you can go beyond merely surviving these uncertain times. You can build meaningful busines value in your trucking company, distance yourself from the competition, and win the future for your employees, and your customers.

Spencer Tenney is President and CEO of Tenney Group

Spencer Tenney is President and CEO of Tenney Group, an industry specialized merger and acquisition advisory firm that has been dedicated to the transportation industry since 1973. For more information on Tenney Group, visit www.thetenneygroup.com.