How do I assess a fleet shop’s reliance on one trucking customer?
Ask the seller to rank customers by revenue and show how much comes from the largest. Then read any contract with that customer, and talk to the contact if the seller allows it. If one trucking company’s decision could empty the bays, you need to know how it is held and what happens if it leaves.
Start with the customer list ranked by sales, for each season. Look at how dependent the shop is on its largest account, and how that has moved over time. A big customer can be steady and pleasant, but it also holds most of the bargaining power. Ask whether the shop’s rates have kept up with its costs.
Then look at the paper. Is there a written agreement, or only a habit? Check how long it runs, whether the customer can end it quickly, and whether it names the owner personally. If it does, ask whether it can be assigned to a buyer. Your lawyer should read this one.
Finally, ask about the relationship. Who talks to the customer’s dispatcher and manager, and how do they pay? Slow payment is a risk of its own. Ask what the shop would do if that fleet moved its work in-house or across town. How many bays and technicians are used for this account alone? If the answer is most of them, plan for a smaller business. Ask what the shop did the last time a large customer reduced its work, because the answer shows how it copes when the pressure comes.
Key takeaways
- Rank customers by revenue and look at how the biggest has moved over time.
- Have your lawyer read the contract, especially any ending or assignment wording.
- Ask who owns the relationship and how quickly the customer pays.
Related reading
12 pages on the same subject, grouped by topic.
Buying
- Expert answerWhat should I ask about a collision shop’s reliance on one paint supplier?
- Expert answerHow do I check a trucking fleet’s maintenance records before buying?
- Expert answerWhat should I ask about a tire shop’s fleet customers’ payment terms?
- Expert answerHow can I tell if a machine shop depends on one aerospace customer?
- Expert answerHow do I tell if a print shop’s customer list is mostly one-time jobs?
- Expert answerHow do I assess an outdoor store’s rental gear fleet and repair program?
- Expert answerHow do I assess a pallet company’s fleet of delivery trucks and trailers?
- Expert answerHow do I assess a warehouse’s forklift fleet and operator training?
- Expert answerHow do I assess a grocery store’s refrigeration maintenance records?
Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.