If you have been following my business over the past few articles, you can see that I have had a lot of exposure in the towing industry. Over the past 25 years in towing, I have met thousands of towers and worked with more owners than I can count. Its an industry that I knew someday I would leave but I was not looking forward to it because I really enjoyed working with the towers.
When I talked to owners, I would tell them if you are getting out of the business you have to prepare for it. Not only who will take over the business, but what will you do once you retire. In today’s world it is getting harder and harder to retire and get out of the business. In a lot of cases, you became a tower because a family member left the business to you. Over the years the business provided a good lifestyle, and you were able to provide a good life for the family. Not so easy today, you face things like:
1. Price of gas going up
2. Can’t find trucks to buy
3. Can’t find drivers to drive the trucks
4. Customers are too demanding
5. Can’t raise prices and compete
6. What is my exit strategy
7. Good employees are hard to find
As I mentioned your children have other interests and towing does not excite them. Outside investors don’t know enough about the business to take a chance on it. If you are one of the few that made it big that is, in itself, a problem. People who know the industry don’t want more headaches and are looking for ways to get out of towing themselves.I have a good friend who called me up just last week and asked me if I know of any buyers; he was ready to sell. I said I would ask around and I needed some info on his business.
He said here is what he has:
1. 32 trucks
2. In debt on half the trucks
3. 4 locations all over Texas
4. Multiple locations
5. Multiple rotations
6. Short of people
He grew a great business, but it will be hard to sell. If you are in multiple cities, you must know their rules and regulations. If you have multiple locations, you must fight the competitors. If you are lucky enough to win the contracts, then you worry about them for the next 5 years.
I remember when I first got in the business 25 years ago. It was fun. Things were not as expensive as they are today. You went to tow shows and partied with other towers, and employees were easier to find. City rates were fair, but so was the price of equipment you needed to run the business.
As I mentioned earlier, I would help tow companies prepare for retirement by helping them set up their company to sale and to prepare them for retirement. I’ll tell you right now – do not retire until you know what to do with yourself.
When I sold my company, I was not ready. I was working with a friend of mine who owned a large tow company in a suburb of Dallas. He needed a location in Dallas, and we were about to form a partnership so he could have a location there when out of the blue a stranger walked into my office and told me he wanted to buy my company. I did not know who he was, but he knew everything about me. He even knew what kind of sprinkles I liked on my ice cream. I was impressed. I went back to my friend and told him I could not be his partner because someone just offered to buy my company.
My friend, knowing the kind of company I had said he would buy my company. What a great position to be in. My friend told me if I sell to him it must be closed within 30 days. I said I would sell to him, but it left me no time to prepare. Things I taught tow companies to do before selling I did not do. Things like:
1. Notifying my good customers
2. Getting the books to look good by selling off equipment
3. Preparing my employees for the sale. These people were my family and now I was leaving them
4. Wrapping up some loose ends that I was working on
5. Preparing myself for retirement
Everyone thinks they are ready, but they are not. Because my sale was quick, I was not prepared to not go to work. Things I left unfinished would remain unfinished, and the people I would see every day were no longer in my life. Not to mention, I now had a bunch of money that I did not know what to do with, or how to spend it. I know you think these are nice things to be faced with, but I assure you they are not. My wife and I ran the business so we were use to working together. The first three weeks running the house together was a disaster. You can only watch so many reruns of Gilligan’s Island to realize retirement was not for me.
I was happy to be going to work because it would get me back into the towing industry. I tried consulting with tow companies, but that did not excite me. Then I remember when I was doing seminars at tow shows, I identified a problem in the industry that I could fix. I wanted it to help the tow companies, motor clubs, and the consumer. I wanted it to be priced right so that everyone would benefit.
In next month’s article I’ll tell ya all about it.
