Trucking is a very competitive business, and unfortunately every year many great truckers start their own business and fail. To have a successful trucking venture you need to know how to run the business, as it does take more than knowing how to drive a truck.
If you do not want to follow a career that puts you in the same place every day, trucking can be a great way to go.
Find The Right Niche
You need to find the right niche for your startup to operate in, and this is the most important first step for a successful trucking company. The large carriers more than cover some markets, and as an owner-operator, you should not try to break into these. Perhaps look at moving specialized loads or anything else that the big carriers avoid.
Moving fresh produce can be a good market to get into as there is less competition in this area, compared to say moving gas oil drums, which lots of companies already do well. You will be working all year round and even in a recession, food still has to be delivered, which means it could be quite lucrative.
Get Your Rates Correct
It is crucial that you charge the correct rates or you could be running at a loss. Work out the cost per mile to run your truck and remember to include everything, such as insurance and maintenance. Then you will have more idea how much to charge per mile for each trip, and if you can find return loads that will be even better.
Negotiate A Deal For Fuel
Trucks use a lot of fuel, and because of this, it is sometimes possible to negotiate a good price with your local service station. They will want your business, and will often give you a reduction if you buy most of your fuel from them. The profits on fuel are not high, so do not expect huge discounts, but anything is better than nothing.
Be Mindful Of Other Overheads
As well as keeping your truck in a roadworthy condition and making sure it is always on the road, you will have other overheads you need to consider. For instance, who will answer your phone when you are not there and arrange the jobs for you?
There is more than one way to deal with this. You could outsource it to a dispatcher company, although this is not always the cheapest way. You could use a freelancer, or you could have a small office with an employee to deal with these matters. That is a good route to go if you intend to expand by adding trucking contractors to your business.
Cash Flow
When people you have worked for sometimes take 45 to 60 days to pay your invoice this can cause you cash flow problems. You either need cash behind you to be able to withstand this, an understanding bank that will help you through, or you might want to consider factoring your invoices. With factoring, you are paid 95% of the invoice within a couple of days. The remaining 5%, less the factoring companies fee, you get when the invoice has been paid.
Whatever you do to try and make your trucking business a success, never forget all the hidden costs such as bank charges and accountants fees, as these can be the sorts of things that will eat into your profits.
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