One of the biggest reasons you risk failure when launching a trucking company, despite successfully raising money for your startup, is that you focus on trucking rather than business.
But here’s the thing: your knowledge about safe driving and trucking routes is a completely different skillset than the skills needed to become a successful business owner. As a business owner, you must be a good administrator, marketer, and salesperson. To run a successful trucking business, you need to learn how to balance your books, how to bid well, how to think like a business owner, and how to choose the best customers.
Balance your books
The biggest mistake anyone in business can make is not taking care of their bookkeeping. This, of course, doesn’t mean that you have to do it yourself. You can either hire someone or outsource the work. In fact, it’s probably a good idea not to do your own bookkeeping, even if you happen to be particularly good at it and can do it well using the right software. Instead, you should focus on running your business. So, hire the right people for the work.
A bookkeeping service in the trucking niche will make sure you’re on top of paying the $300 FCMSA registration fee and that you have obtained your operating trucking authority activation, consortium enrollment, compliance paperwork, and so on.
In addition, the right firm will help you with keeping track of how well you’re freight factoring your invoices so that you have positive cash flow. And, of course, it will also help you keep on top of all your recurring expenses, like fuel, repair, and wages. The faster your business is growing, the more you will need to make sure that all your expense are paid on time and that your revenues are growing at a consistent rate.
Make sure you take care of this part of your business. There is no point, after all, in running a superb business if you have no idea about whether you’re running it at a profit or a loss.
Understand how to bid
The real secret to success is learning how to bid well. You need to find a balance between charging fair market rates while still covering all your expenses. While it might be easier to get work if you’re highly competitive in your bidding, it won’t serve you well if you have a tough time taking care of your truck and trailer payments and struggle with paying truck fuel and repair costs.
Besides charging a rate that will help you pay for your costs and enjoy a reasonable profit, you also need to think about the route. For instance, you should charge more for pulling a load through a congested city because it will take you much longer to get to your destination.
Think like a business owner
The one question you must ask yourself when you run your business is if you think like a business owner or an employee.
Simply owning a business isn’t enough to force you to change your mindset. If you’ve spent many years as an employee or single owner-operator, then you are habituated to think in terms of your own personal performance. But, as a business owner, you must think in terms of the efficiency of your back office, the best processes that must be followed on a daily basis, and the efficacy of the people you hire to help you get things accomplished.
Choose your customers carefully
An easy to follow system for success is to choose the best customers. As a new business owner, you will probably get your first customers from a load board. But keep in mind that these are not your best customers. While the work may be easy to get, these customers are only willing to pay rock-bottom prices. In other words, they are looking for expediency and aren’t really interested in building up a long-term relationship.
Through proper marketing, you will be able to get customers who will treat you better because they want to build up a relationship, who are willing to pay you more because they value your work, and who are willing to offer you recurring work because your availability expedites their business, too.
The contrast can be huge. While your earnings from load board customers might bring in about $10,000 a month, you could earn double or triple that by securing business contracts with repeat customers.
In closing, you will be successful in your trucking company only if you have a big picture view of things and make sure that everything gets done quickly and efficiently.