Hello,
I`m new here and I see that this post is a little old, but I`ve been reading a lot about the ISP transition and got to no conclusion. Besides that it`s something unknown. Probably you have already passed through that and could give some tips about it. Our terminal is schedule just for 2019, but I`d like to get prepared way before that. Some sellers say that its gonna be much better, that you`re gonna make more money than today, but I don't know if it`s really true or not. I see that the routes sale prices increased after ISP, but still not sure why...
Can someone help me with that?
Thanks!
Prices may have gone up because ISPs will have to have 5 routes to stay in business. So at this time there is an artificial demand. Don't expect that just because one route is selling for $50k, that 5 routes are going to be worth $250k because the ISP WILL NOT earn five times as much as the IC.
Whether it will be more profitable for a lot more work and investment is anyone's guess. You will be giving up what little freedom you had to maybe come in a little later. As an ISP, you better have a firm hand in control of your drivers. Guaranteed to have 5 times as many problems with vehicles, missorted packages, broken scanners, and whatever else irked you about the job as when you had one route. What are you going to do when one of your drivers is sick, and another one just quits because he had to work harder the day before. And if you are out on the road and another of your trucks breaks down and you need to go off your route to help, then you have two late routes. For anyone who just wanted to deliver packages without headaches, that day is past for ISP. Your choice then is to make less money working for an ISP.
And then, after acquiring 5 routes, who knows what the value of your 'business' might be 2-3 years down the road. If the ISP nets about the same or even a little more, but has 5 times as much invested, AND has to work twice the hours, there won't be much more resale value than if you had just one route.
Another option besides selling would be to partner with fellow contractors and incorporate with equal shares. Or if you can sell now for a premium price, and don't want the headaches and responsibility of managing at least 5 routes, take the money and go to work for whoever bought your route.Make sure to get a long term employment commitment.
If you have a lot to invest, and don't mind the possibility of losing it all, you could plan on having about 20 or more routes and being able to hire a couple of managers, and retire on a small income. But remember that fedex can cancel your contract at any time, or non-renew you if they find someone to undercut you or just don't like the way you look.