First Steps to Buy A School Bus Company

Last week, I wrote an article about the opportunity to invest in school bus operators. Now, I’m going to tell you how to do it.

I know this isn’t like most of my posts, but I was excited about this opportunity and did a bit extra work. I’ve researched 60 school bus operators throughout the country and created a database of them to help you get started. Let’s get into it.

The Opportunity

There’s an opportunity right now. The first reason is Covid-19. There are many school bus operators in financial distress, or at least experiencing a down-swing in revenue. Chances are that if someone is selling, it will be at a good price (especially if you, the buyer, are convinced that school buses will return to normal eventually).

Additionally, many school bus operators are owned by baby boomers. Baby boomers are currently between the ages of 56-74 and many of them are thinking of retiring soon. While many of these operators may have enjoyed having a small, profitable business to fund their life and family, they are at an age where they might consider selling it.

Finally, many of these companies aren’t run as well as they could be. Many small operators have become complacent. Their owners have a set amount of take home pay that they receive each month and they don’t care to invest in future growth or optimize cost structure. Simple things like optimizing bus routes and implementing best practices for human resources can make a big difference.

Where to Start

If you were thinking about executing on this strategy, where would you begin?

The first thing to do would be to obtain financing. Of course, if you manage capital already, this is a non-issue. But if you are an aspiring business owner, you would probably look to use a Small Business Administration (SBA) loan to finance the majority of the purchase. These are actually quite accessible. They make sure you have the basics (no recent bankruptcies, high credit score) and if you can put 10% down, you can access a loan that could be as cheap as 5.5% interest rate.

I haven’t done this myself, but I’ve heard the SBA loan application process is length but not difficult. If you can bear the mountain of paperwork, the financing is available.

After you get financing figured out, the next step is to diligence lots of companies to find the right one. This will take some work, but I’ve helped get you started by researching a list of 60 school bus operators across the country.

----> List of 60 School Bus Operators <---

The database includes:

Business name
School districts served
School bus fleet size
Operating status
Location
Website

Now, you still have to do the hard part. Getting in touch with these companies and diligencing them to figure out their revenue, costs and the current state of their business is where you will uncover the opportunity. But as I outlined in the last post, I think it’s worth it. This isn’t a sexy industry connected to any kind of technology, but that doesn’t mean there isn’t money to be made. You just have to put in the work.