Industry sector: Business services

Courier service: Buy an existing business


You might decide to buy an existing courier business rather than start your own venture from scratch. Buying a going concern can mean that:

  • premises, business equipment, fittings and vehicle/s are already in place
  • the business can generate income immediately
  • customers have been identified and relationships established with them
  • the business has a track record, which can help if you are looking for finance
  • staff may already be in place

However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.

Be aware that courier businesses may not be particularly well suited to being bought and sold, as they often have little in the way of assets. If you're thinking of buying a courier businesses, ask yourself whether you are getting much more for your money than a van and a business name.

Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.

Other matters to consider include:

  • the state of the premises, fittings, equipment, vehicle/s and so on. Will you have to spend money refurbishing or replacing assets
  • is the existing owner prepared to give you some training after you take over
  • existing staff rights
  • how to retain key personnel once you've taken over
  • does the business owe money that you will be responsible for
  • if you are paying for goodwill, to what extent does this depend on the knowledge and personality of the seller

Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.

Franchises

Acquiring a franchise is another alternative to starting up a new business from scratch. There are a number of franchise opportunities available for independent courier businesses. Franchising means that you still start up your own business, but you can benefit from a well established brand and format. You should be allocated an exclusive territory, and you may get work referred to you through the franchisor's delivery network. A good franchise will also offer business support and other useful services. However, all this comes at a price - the franchise fee that you'll have to pay to the franchisor.

Sometimes it may be possible to purchase an established franchise from a franchisee who is retiring. You may also be able to buy a portion of a franchisee's territory from them.

Before entering into a franchise agreement, it is advisable to compare the terms of different franchisors to be sure that you are getting a good deal. Go through the contract with your solicitor before signing anything.

sector_category
sector_pageName
courier-buy_existing.htm
sector_tradeName