How do I find out whether a dump truck business relies on owner-operators?
Look at who owns the trucks that haul the work. Compare the company’s own fleet list with the payments made to outside truck owners, and ask how many loads each one hauled. If a large share of the loads moves on someone else’s truck, the business depends on those people staying.
Start with the fleet list and the ownership papers. Which trucks does the company own, and which are only dispatched? Then ask for the accounts payable detail for several seasons. Payments to outside truck owners, named or numbered, show how much of the hauling is outsourced. Compare that against the dispatch records, which should show who hauled each load and for which customer.
Next, ask how the arrangement works. Is there a written agreement, or is it handshake work? Who sets the rates, who pays for fuel and repairs, and who carries insurance? Ask how long the main owner-operators have worked with the company, and whether any of them also work for competitors. Your lawyer can help you understand how these arrangements are described and what a new owner would be taking on.
Finally, think about what happens after the sale. Would the owner-operators stay under a new owner, and are they tied to the seller personally? If a few of them carry the biggest customers, ask the seller to explain how that work would be protected. A broker or advisor can help weigh how concentrated the hauling is and what protection to ask for.
Key takeaways
- Compare the fleet list with payments made to outside truck owners.
- Use dispatch records to see who hauled which loads.
- Ask whether the arrangements are written down and who bears each cost.
- Find out whether key haulers are tied to the seller personally.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to reduce employee turnover
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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