Owning and operating a trucking company can be a lucrative career choice—that is, if you can break into the competitive business. Many trucking companies fail each year, for the owners were unaware of the business basics. In many cases, it is seasoned truck drivers who decide to try their hand at owning and operating their own trucking business. And, when it comes down to it, most of these men and women are top-notch truck drivers but were unprepared for the realities of owning a business.
While truck driving veterans do have a keen knowledge of the inside world of trucking, they still need a good understanding of how to run a business in order to turn it into a successful enterprise.
Here are a few pointers to help you begin your trucking company on the right path:
One of the most important aspects of running a trucking company is the equipment. Without it, you have no way to get your shipments from point A to point B. Finding the right equipment that is reliable and well-priced is not always the easiest task. However, it is an investment your business needs to get itself off of the ground.
When looking for equipment, it is important to note that many quality companies, including Nextran Truck Centers, offer you the ability to purchase or lease both brand new trucks and pre-owned trucks. Because there are pros and cons to both, before making a decision, decide what best suits your business’s needs.
Many first-time business owners are unsure of what direction to go, for this is all unchartered territory. In order to simplify the process and keep it from being too overwhelming, if possible, speak with a business mentor or a small business financial planner. Due to their background, both can offer you an inside perspective on the future of your company.
The right customers are key to your business’s success. Many new to the business are often under the impression that the only way to get business is to get customers from an online system known as a load board. Though this is a good strategy for businesses to get started, it should not be the only way you look to gain customers. Because of the competitive nature of load boards, you have to bid low in order to get business, which often means you are making little to no money after the shipment has been delivered.
Instead, begin building your client list. Building a customer base of loyal, well-paying businesses will take time and effort. However, it will be well-worth it in the end. Trucking businesses survive on establishing good working relationships with shipping companies. Moreover, once you have secured a few clients, it is far easier and more profitable to work with loyal companies than it is to deal with haggling through load boards.
There are expenses to keep in mind when running a trucking company. Not only are there the day-to-day business expenses, such as payroll, accounting, and office expenses, there are also the equipment expenses to keep in mind, including gasoline, difficulty of the truck route, and maintenance.
Depending upon how much you charge for each load, these expenses could eat into your profits if you do not factor them into the price first. Many owners use transportation factoring services in order to raise the necessary capital for a load before they get paid for it. This can help a lot with cash flow.
Lastly, when it comes to making a profit, it is important to note that many shipping companies do not pay up front or at the time of delivery. In fact, many pay on a net-30, net-60, or even net-90 pay scale, meaning you may not receive the payment from a job for nearly three months. While that is not unusual in a trucking business, it can be costly if you do not have enough cash flow to make it until the payment arrives.
Financing is a great way to keep your cash flow problems under control, as many trucking financing programs offer money in advance, which can help you keep your business running steadily as you wait for your payments.
Trucking is still a widely needed field, thus with the right business skills, a trucking company can be a sustainable and profitable business.