Logistics Business

Discussion in 'Growing and Managing a Business' started by smoore3328, Sep 14, 2010.

  1. smoore3328

    smoore3328
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    Does anyone have any experience in this industry? A partner and I have the opportunity to purchase one. I would like some advice from someone in the industry. The company has 3 major clients that make up just over 50% of the revenue.

    We are somewhat worried if we purchase and lose one of those clients, thats a hurtful loss. Please let me know. I would love to speak with someone.

    Thanks,

    Stuart
     
    #1 smoore3328, Sep 14, 2010
    Last edited by a moderator: Sep 15, 2010
  2. ArcSine

    ArcSine
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    Sorry...no personal experience I can share on this biz type. But just a quick item to run by you that you might want to keep in mind: In a business purchase where the company's revenues have an unhealthy concentration on a small handful of customers, one risk-management tactic that's frequently built into the deal structure is to have some appropriate portion of the purchase price held in escrow for a time. The funds will be released to the seller when and if a certain amount of time has passed and the key customers haven't yet walked.

    Obviously these customers' revenue streams represent a big chunk of the biz's overall value. The theory is that the seller should remain at risk for the retention of those customers for some appropriate period of time; then if the customers are still around, their continued retention becomes the responsibility of the buyers. That's the general idea...the details of how you specifically set it up is, of course, dependent on all the facts and circumstances.

    Best of luck with it!
     
  3. Fergal

    Fergal
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    I haven't actually worked in the logistics industry, however a couple of things I'd suggest are as follows;

    Ask to see the company's bank statements, this will give you a good indication as to whether the company accounts are giving a true reflection of the financial situation at the business.

    If you do go ahead and buy the business, ask that the contract includes a term that the sellers cannot set up or work in a competing business, for sometime (perhaps 3 years) after the sale. The last thing you want is the sellers taking one or more of the key clients, after you have purchased the business.

    Good luck with it!
     
  4. Dyson Miles

    Dyson Miles
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    I want to start a export-import or logistics business what can i do?
     
  5. Sabir

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    Hi - I've got no experience in the construction industry, and other people have already laid out the most helpful points ... but I just wanted to add a point :

    Fergal mentions having a look at the bank statement - this is an excellent point ... however you must also remember that a bank statement does not necessarily have to be an indicator of the company's finances, since there may be revenue / espenses on the P&L which have not yet appeared on the bank statement - especially in the construction industry, with so many contractual agreements etc. that must be held on the Balance Sheet and released to the P&L over time ...
     
  6. Fergal

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    Thanks for clarifying that Sabir, you are absolutely right. It is important to look at the bank statements together with the company's accounts. Unfortunately not all sales shown in the accounts, actually result in money being paid to the business. Sometimes clients are unable or unwilling to pay what they have been invoiced.
     
  7. johnrobertusa

    johnrobertusa
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    The first thing to decide on is the equipments that you will have to deal in.Think of what equipments will you invest in that can potentially make your small business grow. You have to know which of these equipments in your mind is the most in-demand in your area or by your target market.For example,if you think that construction equipments can give you more customers in the area then you may invest with common equipment for that matter such as carts,cranes, forklifts,truck,and others.
     
  8. spider

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    Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and often security.
     
    #8 spider, Jan 5, 2012
    Last edited by a moderator: Jan 23, 2012
  9. rebecca16

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    Stuart, i have friends in the industry and i can give you some real good references. I think if you already have a client who basically will run your economy with 50% of the business coming from them, in my opinion is worth taking a risk. i would suggest you to go ahead with the plan and mail me the questions you have i can certainly help you with them. the only advice i would give you is, dont worry just go for it, just imagine had it been some new venture with zero clientele, how difficult it would have been?
     

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