From business registration, buying vehicles, paying salaries to get insurance, running a trucking company can be a costly venture. However, if you are determined, it can be very profitable. The big question is, how do you find your space in the already competitive industry? Can you compete with the big guns in the sector? The answer is, yes you can! There are many business opportunities in the sector that you can leverage. Let us cover some useful tips to help you start and build a profitable trucking company.
Have a market niche
Defining your market niche or segment is a success recipe in the trucking business. Do a market analysis and find out which segment is less flooded and profitable. For instance, do you want to delve into dry van trucking or food trucking business? Focusing on one niche allows you to utilize all your resources to grow the business, and when it is stable, you can now diversify and add other services.
Maintain good cash flow
Studies show that most trucking businesses fail because of cash flow problems. This is not a shocker because of the mode of operation. For starters, most clients take up to three months to make payments. Even so, you are still expected to meet daily expenses, pay for fuel, insurance, and salaries. These instances could cause cash flow problems for your business, especially when you are a small enterprise. Here are some ways you can maintain a good cash flow
- Keep some cash reserves
- Do not be afraid to pick out jobs that you can afford to take from those you can’t because of expenses
- Work with a factoring company to help you manage operations.
Be on the safe side with laws, rules, and regulations
If you are always on the wrong side of the law, it is impossible to grow or make money. As an entrepreneur in the trucking business, take time to be conversant with the trucking regulations. Be conversant with the common laws such as speed limit, hours of service, drug testing wage, etc. Keeping abreast of the latest regulations in the industry is the only way you will avoid hefty fines that can ruin your business or result in loss of your trucking license. If you are not conversant with the laws, contact a lawyer to get acquainted.
Protect your employees
Employees are the heart of your business, and they can make or break you. According to a law firm for auto accidents, businesses need to cover their employees under the workers’ compensation insurance. Before you think of this as an expense, you might want to think of the legal implications in case of an injury. Without a workers’ compensation cover, employees like drivers can file for personal injury claims, which are more costly. In fact, when employees know they are protected, they become more productive.
It is all about making money, right? One way to do it is to charge the right amount per trip. You must make sure that the money you charge can cover the operating costs and can still earn you something. Since trucking rates are calculated per mile basis, you should know how to calculate the mileage between starting and destination points.
Quick tips to get profit from a load charge
- To get the rate per mile, divide the overall rate by the number of miles from start to destination
- Include transportation cost ( gallons of fuel used and cost per gallon
- Fix the drivers rate ( multiply hourly rate with the time needed to complete the trip
- The cost of the trip is the total costs divided by the number of miles made on the trip
- You will get your per-mile profit by subtracting the per-mile cost of the trip from the per-mile rate. Depending on the miles you go, you can tell the profit.
Leverage on digital marketing
The world is digitized, and social media is a great tool to reach out to potential clients. It is also a great tool to improve and grow your trucking business. Use social media pages and your website to elevate your business. Get your company a unique logo, including trucking details on your website and engage your audience on social media and watch your company grow.
When drawing your budget, set aside some money for advertising, business cards, and general marketing.
We hope that these tips will get you on the right track in starting and running a successful trucking company. Remember, you need to work on your business acumen to thrive consistently. Do not be afraid to seek expert advice and have the right mentors to help you grow.