Step 1: Compile the Profit and Loss Statement

The first step in identifying the value of your FedEx routes is to determine the free cash flow of the business. While this may sound complex, it can be determined fairly easily, depending upon how organized your financials are. Whether you track your income and expenses yourself or employ a bookkeeper/CPA to do it for you, we start with a traditional Profit and Loss statement in order to identify all income and expenses associated with your corporation. Your 1099 from FedEx will identify the gross revenue that your corporation has earned from your FedEx business. The next step is to list ALL expenses that have been run through your corporation. These will include fuel, repairs and maintenance, lease expenses, insurance, payroll etc.

Step 3: Identify Shareholder Compensation

As the owner of your own corporation, you may pay yourself (and your fellow shareholders) in a variety of different ways. These may include a W-2 salary, 1099s, distributions, etc. The goal with this step is to identify all the ways in which the ownership of the corporation receives compensation. Unless you are a full-time driver for your routes, this compensation figure should be added to the figures identified in steps 1 and 2 in order to arrive at a final free cash flow figure for the corporation.

What are my FedEx routes worth?

​As I am sure you are aware, every FedEx operation is different in many ways. For example, rural routes differ from urban routes, FedEx fleets vary in age, size and quantity. Driver wages vary with local labor markets. Regardless of where your business falls on the contractor spectrum, there is a fairly consistent way to calculate the value of your FedEx routes.

The information below is intended not as a formal valuation doctrine, but rather an easy-to-follow template to help you estimate the value of your routes. Should you be interested in a market value estimate by Courier Broker and Insurance Services, please don't hesitate to contact us.

Step 4: Determine Industry Multiple

Businesses are sold based on a multiple of their free cash flow, often referred to as “EBITDA” (earnings before interest, tax, depreciation, amortization). Depending on the industry, size of business, buyer type, etc. these multiples can vary wildly. Generally speaking, FedEx routes across the country sell for fairly consistent multiples. On average, FedEx routes sell for anywhere from 2.5 to 3 times the free cash flow of the business. See the list of nationwide comparables on our Buyer and Seller Resources Page for a summary of recently completed FedEx transactions.

Step 2: “Normalizing” the Profit and Loss Statement

Once you’ve produced your profit and loss statement, the next step will be to “normalize” your P&L. “Normalizing” the profit and loss statement means you will want to identify those expenses that are 1.) non-recurring, 2.) personal in nature, 3.) non-transferable, 4.) tax reduction strategies. Simply put, these are the expenses that will not transfer to the new buyer once he/she purchases your routes. Note these expenses on your P&L and add their total to the corporation’s net income. Examples of these expenses may include:

  • Loan/interest payments for a loan that will not transfer to a new buyer
  • Personal phone/fuel/vehicle/meals/entertainment expenses
  • Non-essential employee payments
  • Depreciation
  • One-time vehicle purchases or expenses (i.e. a new engine)
  • Etc.


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