Are you Ready to Sell your FedEx routes?! There are a lot of reasons you might want to sell your FedEx route. Are you ready to retire or move on to something new? Do you have too many routes and want to shed the stress of one or two of them? Or was the last peak season just too much for you? Right now is a great time to sell your FedEx routes.
No matter what your reason for selling, you can’t just wake up and decide to sell your route without taking time to prepare and making sure you are ready to find the right buyer for your route at the right time. Here are some tips and tricks for you.
Be Sure Your Books are in Order
Like most small business owners, your accounting probably is set up for the biggest tax advantage but that doesn’t show a buyer what your business is really worth and the money you can potentially make.
This means you need to recast your books, something a business broker or your accountant can help you do, to show the true earning potential of your route. That means adding back in some things like owner salary and perks, and items you might take as a tax deduction legally, but that are not necessary for running your business.
You’ll also need to have things like your tax returns for the last few years, your profit and loss statements and cashflow statements. A buyer will want to see these so that you can prove your route is a profitable one.
Make Sure Your Route is Financially Healthy and Ready to Sell
Every FedEx route buyer wants to buy a route that is profitable. If your route is not making as much money as it could or you have had an off year, you might want to wait until things improve before trying to sell your route. Otherwise, you are not likely to get the maximum price for your route.
This can include things like cutting your expenses and making your best efforts to increase revenue. Think about when you bought your route. You wanted a return on your investment as soon as possible, and any reasonable buyer will want the same thing.
Evaluate Your Assets
A financially healthy route will also have assets that are up to date and in good shape. If you have older trucks or package handling equipment that is out of date or aging, you may want to update before you sell your route. You can also always choose to sell your route without these assets and sell them separately, but that will drastically reduce its value.
Your employees are also your assets, and while you might not want to let them know right away that you are selling your route, you will have to tell them at some point. Make sure they are as loyal to the route, their customers, and FedEx as they are to you. You may even want to ask them about hypothetical owner changes at some point to gauge their reaction.
You don’t want the buyer to walk away from your route because of substandard equipment or employees who might not stay through the transition.
Know Your Business Value and Sell When You Are Ready
One sure way to know your business health and get a good look at your assets is to know the value of your route by having a business valuation done by a business broker. That way you will also have their experience to draw on because they will know what the market in your area is like. They can compare what other routes are selling for in combination with your assets and revenue potential.
Most route owners on their own will either overvalue their routes, contending that their “baby” is worth more than a similar route for any number of reasons. Or they will undervalue their route, not understanding the true value of what they own. A true business valuation can eliminate either of these outcomes. Of course there are other things to consider, for example, the condition of your delivery van and vehicles…etc.
Consider Your Timing
Like other businesses, the FedEx route is seasonal. While the obvious busiest season is around the Holidays from November to December, there are other busy and slow periods as well. This is why most professional business brokers will suggest that you list your business no later than August because of the rise in business that usually starts in October.
When things are slower in January, it is a great time to evaluate your business and sell. This also allows more time for both you and the buyer to work on the deal without being overly stressed by business.
Allow Time for Training
Another factor apart from seasonal timing is to allow yourself time to train the new owner on the route, introduce them to regular customers, and give them an idea of how you have been doing things. While they may want to do things their own way, at least they will have a foundation to work from.
Of course, in part this depends on what is next for you after you sell your route, and this is another consideration when it comes to timing. If you are selling your route in part because you don’t want to endure the stress of another peak period, make sure you are able to make your exit before business picks up. In addition, this is a horrible time to train someone on a route, as they will need time to adjust to the seasonal demand once they know the route better.
Hire the Right Team When You Are Ready to Start the Selling Process
More than likely, you would not try to sell your house on your own, but selling a business is much more complicated, as are things like business valuations and finding the right buyer for your business. They are also time consuming, and you have a business to run.
Your best bet is to hire a “partner” who knows the ins and outs of selling a FedEx route and may even have eager buyers waiting to purchase your route. When you are ready to sell, contact us here at Route Advisors. We look forward to helping you with the sale of your FedEx route, and we’ll be with you every step of the way. Feel free to check out our current listings!