Building a Successful Trucking Company: 5 Steps

    Tracey Clayton

    If you’re thinking about starting your own company, chances are you’re considering the idea of entering the trucking business. Building a trucking company can be very profitable but the industry is quite competitive, and there are new truckers who enter the business only to end up failing before they’ve even got a proper chance. Still, if you know a thing or two about building a trucking company, you will get a chance to show what you can do. That said, we’ve come up with five steps you should follow if you want to separate from all the other rookie entrepreneurs who want to get into the trucking business.

    Get all the equipment

    The first and probably the most expensive thing you’ll have to do when starting a trucking company is get all the equipment for your new company. So, once you choose the trucking outfit you want to go for, you should think about whether you should buy it or lease it. Buying equipment means you’ll have to splash the cash right at the start and own all the equipment you’re going to use. On the other hand, you can choose to lease it and pay lower fees every month. Some leases can even be structured in such a way that you end up owning the equipment once you make the last payment.

    Find customers

    Of course, your trucking company won’t be able to survive on the market if you don’t manage to attract customers. Most of the people who are new in this business tend to get their first shipping customers from a load board. If you decide to do this, you’ll be able to find your customers quite fast, but you’ll have to bid rock bottom prices. For example, some trucking companies earn around $10,000 per month per truck when using load boards. However, once they manage to secure a list of contacts they manage to increase that number even up to $20,000.

    Run your back office carefully

    Just like with most of the other businesses, when running a trucking company you’ll have to be very careful about the way you’re running your back office. The type of your back office depends on the size of your business. Of course, a smaller fleet has less back office needs than a single owner-operator. Just bear in mind that trucking companies run on efficiency. This means that if you want your business to be able to grow, you’ll have to put a lot of effort in determining the right back-office strategy for your new company.

    Know your expenses

    It’s also important to mention that your bids have to be high enough to earn you profit. So, before you start bidding, you’ll have to learn what your expenses are. We’re talking about things such as lease, maintenance, fuel, repairs and cost of your work. Cost of your work can be quite difficult to determine since it varies from job to job. For example, picking up cargo in a metropolitan area makes a job more difficult and should be charged more. Also, make sure you always choose the best automotive supplies like engine oils and antifreeze coolants in order to keep your trucks in tip-top shape.

    Try to avoid cash problems

    Cash flow problems tend to arrive at the worst possible time. That’s why you should do whatever you can to avoid these. Most of the people who are new in this industry offer flexible payment options which leaves them waiting even up to 60 days to get paid. This leaves them without enough cash to buy fuel and make any necessary repairs on their trucks. Opting for freight factoring should help you bring in enough cash to cover all of your expenses without having to ask your customers to pay you before their deadline.

    Follow these five steps and you should be able to stand out from the crowd. Just don’t forget that you always have to keep improving if you don’t want to get swallowed by competition.