Small businesses come in all industries, sizes and specialties. Increasingly, many come on wheels too.
The term "mobile business" typically conjures up images of food trucks parked conveniently across downtown areas or summer street festivals, but many four-wheel operations go beyond the movable feast. In cities throughout the U.S., florists, barbers and apparel retailers are opting for commercial trucks instead of brick-and-mortar storefronts.
Mobile businesses can be an attractive choice for small business buyers worried about signing long-term leases or high rents. Working from a truck also lends a degree of flexibility and freedom, enabling owners to literally go where their audience is, rather than wait for customers to come to them.
Compared to traditional small businesses, however, mobile companies come with an array of their own operating costs and regulations that prospective owners should closely evaluate when contemplating a purchase.
Be an informed mobile business buyer
The standard smart buyer questions still apply when shopping for a mobile business, but need to be expanded in order to understand the true expenses, challenges and opportunities of running a company on wheels. Here are five areas mobile business buyers need to inquire about during their search:
- What business permits will transfer after the sale? Most mobile businesses need specific permits and licenses in order to sell in public spaces, outfit the truck with certain equipment, or park in different zones. Obtaining the right documentation can be a complicated process, especially since regulations differ from one city to the next. If you're considering buying a mobile business in one location and plan to move it elsewhere, find out what permits (if any) will transfer and what you'd be responsible for securing after the move.
- Does the business require additional commercial space? Even mobile business owners need fixed, commercial facilities for food prep, storage or office space. Cities like Chicago, for instance, stipulate that food sold from a mobile vehicle can't be stored or prepared in a personal residence, forcing truck owners to rent a commissary kitchen elsewhere. If the mobile business you're hoping to buy uses (or needs) a satellite facility, find out if those costs are factored into the seller's asking price.
- What existing contracts are in place? To ensure a steady cash flow and customer base, it's not uncommon for mobile businesses to maintain relationships with local schools, college campuses, park districts or farmer's markets in order to regularly park and sell at those venues. Gather details about what standing contracts the current owner has in place, the terms of those contracts, and if they'll carry over once the business changes hands.
- How much does it cost to maintain the vehicle? Interested mobile business buyers need to do a thorough examination of the vehicle they're buying and the costs associated with its upkeep. Details such as the vehicle's current mileage, typical fuel costs, insurance policies, equipment maintenance expenses, and regulatory inspection requirements should be made clear early in negotiations. Be sure to ask if the outgoing owner is planning (or willing) to cover needed maintenance such as oil changes, new tires, detailing, or paint jobs before transitioning the business too.
- How established is the company's audience? Most buyers aim to takeover companies that already have loyal customers, but a dedicated following can be even more crucial when running a mobile business. Will people trek across town to wherever the business is parked on a given day? Or does the truck make stops at multiple busy locations each day to capitalize on built-in foot traffic? Learn about how the current owner communicates real-time location information and other updates to customers (i.e., via social media, apps, a company website or texts), and think about how you would expand or augment that strategy.
Running a small, mobile business is an adventure in and of itself. In order to purchase a non-traditional operation successfully, however, buyers need to be prepared for a non-traditional sales process. By asking the right, specific questions before closing, new owners can avoid unforeseen roadblocks later on.