Starting and managing a trucking business isn’t a small task. First, there’s the high initial capital investment, then the challenge of finding good clients and reliable drivers, plus the convoluted logistics of delivery. Still, you can definitely make it as an owner//operator. Here are five things you should consider to grow your trucking business.
How would you want your business to grow? Are there trucking businesses you consider to be good role models? Growing your business requires a clear vision of where you want to be in the future.
You can create your own vision by observing what other trucking businesses are doing right. Once you identify your goals, consider the steps needed to move from your current position to your goal. Let’s put it this way, you need a business plan to help focus your actions so you achieve your vision.
Assuming you have multiple trucks, you’ll need to employ several drivers. Lots of times, driver turnover is high, and the supply for this skillset is extremely tight, particularly with COVID. Yet, you can’t operate without them. So you’ll need to keep the ones you have happy and motivate them to work efficiently. How do you do that?
Ideally, no driver should want to leave if you pay them competitively and provide fair terms of employment. Regularly checking into what wages, perks and benefits your competition is offering is a must! Plus, you can boost morale by paying their insurance and giving them paid time off (PTO) and/or family leave.
Make your customers happy, and they’ll be more inclined to extend your contracts. Ideally, you should try to negotiate long term or extended contracts that will keep your business running smoothly and with less need for sales efforts. Another thing, encourage your repeat customers to refer you to others to help you expand your client base.
Try to proactively identify quality customers who you’d want to keep for life. Next, establish trust with them by providing dependable service and maintaining a great customer experience. Build your customer base in this manner, and you’ll soon find yourself acquiring more trucks to meet the needs of your growing business.
Losing money in a truck business wouldn’t be a surprise if you don’t monitor your operations closely. Remember to track all your expenses and income. Similarly, maintain proper records and regularly prepare profit and loss (P&L) statements.
These statements will help you monitor the business progress—allowing you to pinpoint which expenses need more attention to maximize your gains. For instance, can you buy diesel under some form of a futures contract when the fuel is cheap? Perhaps you can install a geo tracking system to determine which routes are more economical, and pay your drivers according to their performance.
Sometimes, a contract with your customer may take longer to complete than you had anticipated. Some businesses may prefer to pay you once you’ve already delivered the cargo. Yet, you still have to pay for fuel and other operating expenses on a daily basis. Plus, you never know when your truck will break down or need maintenance. For these reasons, you may occasionally feel the need to borrow funds to top up your working capital. Using your personal credit card may not be the best solution.
Talk to your bank, apply for an owner/operator credit card or open a fleet credit account if you can qualify. Be sure to start with the least costly option with low risk to your business when evaluating alternatives.
Maybe you can request your clients to pay a certain percentage of your fees upfront.Your clients provide the cheapest and most risk-free capital. So consider them before going to a bank.
A trucking business has its challenges. But with a good plan, reliable drivers and clients, and attentiveness to your working capital, there’s no reason you can’t succeed.