A version of this article was originally published in BeyondTrucks in February 2023.
Viable companies need technology. With larger shifts in trucking technology on the horizon, including self-driving and electric vehicles, assessing your technology stack can expand opportunities.
If you own a trucking business and a sale or exit is on the horizon, there are numerous factors to consider. This series of articles on business transitions in the trucking industry discusses business valuation methodologies and tax and other considerations when deciding to sell or gift the business.
This article emphasizes the importance of incorporating technology during generational transitions.
Benefits of Incorporating Technology into Your Business Transition Strategy
Technology, particularly smart workflow technology, is a valuable tool in a generational transition. It digitizes the business end-to-end, builds operating standards, institutionalizes the wisdom of the retiring generation, and offers visibility to senior leadership governing incoming management.
It can boost confidence in the business remaining competitive in its valuation and projected cash flow. Given the extent of technological change, owners should consider moving past outdated legacy systems.
New trucking companies are digital native businesses—a disruptive business model that can shake up the profitability of long-established incumbents. It’s important to incorporate aspects of technology to support the sustainability of cash flows and the preservation of wealth, and also to leverage technology to address challenges that traditionally surface during generational transitions.
Technology is taking an unprecedented role in protecting and enhancing trucking companies’ enterprise value.
Workflow technology is advancing rapidly. Automation can help streamline and digitize businesses. Rapid digitization of supply chains can provide new sources of data that can help improve the internal operations of a trucking company.
This technological acceleration can leave trucking companies operating on an outdated technology stack with less competitive rates to offer to shippers or brokers.
Companies planning a sale or generational handover should consider these questions about their current technology provider:
- Can it help the company stay competitive and maintain or improve income levels after the handover?
- Is it institutionally funded? Does it have sustainable access to cutting-edge management and technology talent?
- Can it facilitate visibility into managerial and board control requirements after the handover?
- Does it have robust cybersecurity measures protecting assets and cash flows?
- Is it vertically integrated?
Traditional legacy technology providers are often management systems, document scan systems, HR management systems, accounting systems, or customer relationship management systems. Newer players verticalize their stacks to save money and streamline management, higher levels of automation with less manual data input and fewer errors, better control, and potentially allowing for lower costs per transaction.
We’re Here to Help
This article is part of a series also covering:
- Estimating the value of a trucking business
- Selling or gifting a trucking business
For guidance assessing your current technology stack or how to improve operations before a transaction, contact your Moss Adams professional.