7 Things to Know Before Starting a Trucking Business
Did you know that there are over 1.8 million truck drivers in the USA? Trucking is a crucial industry that is part of the backbone of the American economy.
Fundamentally, a manufacturing economy cannot exist without the trucking industry. Trucks are needed to transport raw materials, parts, and finished products to retailers.
If you are thinking of starting a trucking business, what do you need to know? Why not read on to learn about the most important things to remember when creating your trucking business plan.
- Bulk Up Your Office Staff
The most successful trucking companies are not reliant on one or two talented individuals. They recognize that you need a committed and skilled office staff to meet customer demand and support trucks on the road.
Whether it is handling payroll or knowing the best trucking insurance companies, you need individuals in each role who can specialize and excel in their role. Reputation and relationships are a key element of a successful trucking company. Customers will still work out if a single individual is trying to run a business on their own.
- Plan Your Fuel Expenditure
Although a trucking company has a number of operating expenses, truck fuel is one of the largest and most consistent outgoings. Planning how you will obtain fuel cheaply and efficiently is a key part of your business plan.
Equipping your drivers with fuel cards can help you to purchase fuel at a reduced cost and also track fuel purchases in real-time. From this data, you can then consider whether you should consider alternate routes, truck technologies, or other options to increase efficiency.
- Get Authorization to Truck
Before you can get your trucks on the road, you will need to formalize and register your company. This includes getting a USDOT (United States Department of Transportation) number and an MC (Motor Carrier) number from the interstate operating authority.
This process can be tedious and requires patience. However, you will need to complete this stage before you can start any kind of trucking work using your company name. Any delay to the completion of this stage could impact your insurance and hiring contracts.
If you are eager to start, you may want to team up with a start-up company that specializes in helping fledgling trucking companies get their paperwork in order.
- Build Your Customer Base
Even if you have your paperwork and trucks and are ready to go, you will need to build up a good reputation with your customers before your business really takes off.
To find your first customers, you may want to apply to join online lead-boards. This may help you to get your first small contracts. Like any job, you are looking to build your reputation and your portfolio.
As your client history grows, likely customers will start to approach you rather than the opportunity. You will likely be able to benefit from significant repeat customer work.
Always remember that it is cheaper to retain customers instead of going out to find new ones. This means that you should treat your first small customers as if they were million-dollar customers.
Work and communicate to give them the highest quality service you can. However, before you agree to long term work with them, there is one more step you should take.
- Run Customer Checks
If a client indicates that they would like to work with you on a more frequent contracted basis, there are some basics steps to take. The first of these is to run credit checks.
Making this part of your regular workflow will protect you against loss and give you greater peace of mind. Eagerness to build relationships without checking the ability of the company to pay could damage your company financially. It could also indicate a lack of professionalism and impact your reputation.
Why not team up with a financial institution that can assist you in making these credit checks on a regular basis?
- Practice Neat Accounting From Day 1
In the initial stages of a new business, it can be difficult to track every expense, especially those that are hidden or paid in cash.
Some payments such as insurance, routine maintenance, and payroll are tracked routinely by the accounting department. However, others, such as emergency repairs, office expenses, and other costs, may be more difficult to track.
Professional bookkeeping software can help you to keep all of these costs on one ledger. These can include expenses that may be unexpected, but that can be logged easily. It could be as simple as taking a photograph of a receipt to start the paper trail.
In time expenses will fall into routines, and you can factor them in as part of your operating costs.
- Plan Your Cash Flow
As a start-up business, you will have spent a considerable amount of money to establish the basics. These include truck finance, initial insurance premiums, and office costs. However, even after you start moving goods, you may have to wait 2-3 months for your first payment to hit your bank account.
It would be good to plan ahead how you will meet expenses during this time. Some companies add this to the finance they receive at the outset. Others work with a factoring company that will provide a basic percentage of this first paycheck in advance.
Everything You Need to Know Before Starting a Trucking Business
The trucking industry is part of the backbone of the US economy. If you are thinking of starting a trucking business in 2021, you can be sure that there will always be demand for the movement of goods and materials.
The initial stages of setting up a trucking company may seem expensive and tedious. By applying the principles above, you can be sure to benefit from profits and a solid trucking reputation in the long run.
If you are interested in learning more about business and trucking subjects, why not take a look at our blog articles? We provide information that we know will help you.