So you considered getting a job as a trucker and realized you could make even more money by starting your own trucking business, right? There are important steps you must take to ensure you are successful.
While you define your business plan, there are a few things that you may be missing. Your goal is most definitely to have a profitable trucking company. By applying these tips to your business plan and the way you will operate the business, you will increase your chances of profiting more quickly.
Choose the Correct Niche
When choosing your business niche, don’t let emotions get in the way of your better judgment. For example, perhaps there is a certain kind of market you like personally. Maybe you worked in that market as a trucker or you know suppliers personally. However, a business must be profitable, and you should focus on getting the most out of it. If that niche isn’t an area where you think you’ll be able to get a lot of business, your personal connections to the market could get in the way of real profits.
As an owner-operator, find a niche that large carriers are avoiding and that needs trucks. The ones that offer the best advantages will vary according to the region. Therefore, do vast market research first.
Calculate a Proper Rate
With experience, you’ll eventually reach the best rate that factors in both competition and profits. Nevertheless, if you charge too high of a rate before you have the reputation to back it up, you might risk losing clients or benefits for a good while before truly reaching that point.
Instead, you can calculate a rate that could be applied in a specific direction. Put some benchmarking strategies in action and discover what the prices are for the region. That way, you can be both competitive and earn more money than without any experience at all.
It’s also important to note, although it’s obvious for some people, how much each drive will cost both ways. You don’t need to go to school to understand how to calculate your cost per mile. Use online resources to learn what you need to make your business financially successful.
Manage the Fuel
Don’t focus too much on pump prices when purchasing fuel for your trucks. The taxes that apply to your fleet are different than the one for regular drivers. Therefore, focus on the base price.
Calculate how much the fuel price is minus the taxes, and you will get the base price. With this strategy, you will avoid losing thousands of dollars every month due to wrong calculation.
Be sure to keep up with all the legal requirements. One of the major new changes is obligatory use of ELD devices to record hours of service. The ELD devices or electronic logging devices use a host of sensor to record various information through vehicle’s diagnostic port. Unfortunately, vehicles built before year 2000 don`t have the required electronics installed which makes them incompatible with these kinds of devices. Having this in mind, the lawmakers declared these types of vehicles exempt from the mandate.
Build Your Own Client List
At certain points in your business development, you can and should use brokers now and then. Your empty trucks would cost more than paying a percentage to brokers or consultants that can help you build out your clientele. However, you will earn more money from your own client portfolio, but everyone starts somewhere.
Build a strong relationship with suppliers. Also, find those who can be strategically used to reduce costs. That way, you will double your revenue by skipping the intermediaries.
You will be competing with brokers, so make sure to find an exceptional price that covers the competition. Finding good clients is a challenge but will pay off later.
Keep Cash Flowing
It may take a while to receive payment from most clients and brokers. However, your obligations, fuel costs, and payroll must be paid. To keep cash available, it may be necessary to borrow money.
You can expect to pay something around 5 percent of the income, in order to receive it earlier. That way, you avoid other funding options that cost much more. Higher profit is also the balance of income and expenses so it will help you to make more money.
You can understand better how factoring works with useful guides on the internet.
The Bottom Line
Starting a trucking company has many costs involved and may sound like a difficult task. You’ll probably even need to get a truck loan. But there are several ways to increase the revenue in the first months.
By applying these tips you can earn much more with your new business. The path is there, you have the right directions, and all you need is some effort. Build your responsive team of truckers, and you’re on your way to starting a successful trucking company.
