So I went to one of those high-tech networking events recently. You know the ones – the ones where you get to sip the latest vintage, enjoy the vistas of a stunning harbor in the full of summer, and talk to fellow CEOs about the technology industry.
In amongst the talk of ‘market space’ and ‘what do you do’s’, you sometimes get involved in a deeper conversation about business – sometimes about raising money, or going public.
Everyone wants to know the ‘multiples’ someone is paying for a business.
“Did you hear about the multiple that that fintech play got?”
The word ‘multiples’ when in discussions about capital financing and buy outs usually relates to the dollars paid as a multiple of either profits or revenue. Certainly when it comes to running a SaaS business as we do multiples is usually expressed in reference to revenues since the profit, while perhaps significant, can be somewhat delayed. All I will say it this – there is a considerable investment up front in the application and customer relationships, with the confidence that through retention a solid profit will be reached.
The SaaS model places greater emphasis on ‘customer- supplier’ fit, through a free trial and monthly subscription rather than the customer having to come up with some big chunk of capital, hoping that the promises and representations of the software supplier is supported by the delivery of the application. It ties the seller and buyer together, allowing them to move lock step – number of users, time duration – based on the evolution of trust in the relationship.
But it got me thinking about ‘multiples’. Before I ever really want to start thinking about ‘multiples’ in the sense of investment and buyouts, I want to think about how our application can give our customers the outcomes that they want, that they need. Interestingly enough, it has to do with ‘multiples’, but a different meaning of the word.
Here they are.
Say you want to run a brokerage with a number of offices and want to keep track of all the different revenue and costs associated with different offices and agents/brokers – we do that well. Additionally you can do that for your trucking operations and terminals. Even beyond all that, you can run a combination model where you operate a trucking company and brokerage business out of the same application.
Tailwind transportation software allows companies to transact in both US and Canadian dollars. You can transact, invoice and pay in either US or Canadian.
Tailwind tracks all of the locations where you pick up or deliver loads
Having more than just a few customers is important to a business. The ‘rule of thumb’ is that you should never allow a company to control over 25% of your business. If they do you run the risk of them running your business! In order to manage business continuity and reduce risk, it is important to use trucking or freight brokerage software that can help you find and work with multiple customers.
A number of trucking software providers have built their platforms around a Dispatch system whereby a Dispatch is linked to only particular order or shipment load.
While Tailwind certainly provides that same capability, the application extends a customers’ ability to manage multiple orders, multiple shipments and multiple dispatches. so they can
- Maximize their load revenues by combining shipments for separate customers into one load
- Take one order and convert that into multiple shipments and multiple dispatches.
Some of our customer wonder ‘why the Dispatch #’ isn’t the same as the ‘Order #’. While intuitively one would want just one number to track through the entire workflow, this prevents you from tracking multiple shipments for multiple customers on multiple trips.
By separating the ‘Order Sequencing’ (generation) from the ‘Dispatch Sequencing’ , Tailwind can accommodate those trucking companies and brokerage businesses that are trying to optimize their loads while avoiding a paper tornado erupting in their administrative department. It accommodates all of these scenarios.
- One Order > One Shipment > One Dispatch
- One Order > Multiple Shipments > Multiple Dispatches
- One Order > Multiple Shipments > One Dispatch
- Multiple Orders > One Shipment > Multiple Dispatches
While most TMS providers are able to handle Scenario 1, Tailwind is able to manage all 4 scenarios which gives you better flexibility in your operation; a better ability to optimize your loads while keeping the administration in line. That will allow you to drive more revenue and more profit – and it avoids a situation where you make the gains in your operations but lose it in all the labor and paperwork that you spend organizing.
What does this mean to a customer?
Well,it could mean that a trucking company is better able to manage the needs of multiple customers, to deliver multiple shipments to multiple locations through multiple dispatches, and invoice multiple shippers while paying all the drivers and allocating for the costs on a truck by truck basis.
We believe that having this multiplier effect will help a vast number of our customers to become more nimble in their markets and will have a multiplier effect on our, and their, business in the years to come.
Now… go forth and multiply!
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