Businesses of all sizes are dependent on the transportation sector, logistics, and trucking, in particular, for smooth operation. The sector is said to act as the backbone of the economy for most countries and the United States is no exception.
Throughout the supply chain, truckers are in charge of delivering raw materials to manufacturers, followed by the delivery of finished goods from these manufacturers to wholesalers, retailers, and ultimately the end customer. In fact, trucks are responsible for over 70 percent of almost all goods transported in America.
According to myopenadvisors.com, it is safe to say that all economic activity would cease if these constant cycles of supply and delivery did not exist. The trucking industry’s significance within the economy can be evidenced by the fact that while several businesses were forced to shut down during the pandemic, the trucking industry continued to operate at full force. This was supported by the rise in e-commerce activity in response to the Covid-19 restrictions which included the closure of most stores. Hence, it is safe to say that all economic activity would likely cease if this cycle did not exist.
While the trucking sector can be highly lucrative, it is not for everyone. As, with each passing year, many drivers decide to make their transition into trucking business owners, however, only a few succeed. While being a truck driver first may give you important insight into running a successful trucking business as well as its operations, it does not guarantee success. In order to succeed as an entrepreneur, you need to learn how to capitalize on opportunities.
Trucking companies face similar challenges to that of delivery companies which range from information delays, difficulty raising finance, regulatory compliance issues, etc. Thus, if you are uncertain how to make the leap from being just a truck driver to establishing your very own independent trucking company in a successful manner, here are four essential strategies to help you get started on your journey.
Have A Solid Business Plan
Lack of short-term, as well as long-term business planning, is one of the leading reasons for business failures and the trucking industry is no different. With large logistics and delivery firms such as Amazon, FedEx, UPS Inc dominating the sector, starting your own business may seem like a challenging feat to accomplish.
Reports reveal that almost 97% of trucking businesses operating in the sector are SMEs with fewer than 20 trucks, indicating that your existence in the industry is just as, if not more, important.
In an industry with such fierce competition, you can not afford the luxury of making big mistakes. This is where a business plan comes into the picture. Having a solid business plan will make all the difference between failure and success for your company. A business plan essentially provides an outline of the business, helps plan its future, and allows you to avoid any bumps on the road.
Developing a trucking company business plan will start will market research, setting out measurable, achievable goals, recognizing any problems and questions that you may face along the way, and the identified solutions and answers to these problems. This could include the type of equipment, strengths, and weakness of your business as well as competitors, ideal customers, types of loads and freights you will work with, etc.
When a business plan is drafted, it will serve as a guide for the future growth and success of the business. In addition, you’ll want to make sure to stick to it unless there is a chance of it being highly inaccurate. In which case, it would be better to either draw up a new business plan or edit the existing one. It is important to note, however, making mistakes will result in increased business costs and a higher failure rate.
An effective business plan will also be essential in getting you capital as you will be in a better position to sell your idea to potential investors.
Obtain All Necessary Permits
The trucking sector, just like any other industry is governed by a number of regulations, each with its own requirements that are constantly updated. Nevertheless, it is important to remain up-to-date on changes in regulations and track compliance with current regulations. In fact, this will be among the first steps to setting up your very own transportation/trucking company.
This will involve getting your hands on all the required permits. These will vary, however, depending on where you’re operating. For example, if you have plans to operate interstate commercial vehicles in Texas, you will need to obtain a Texas DOT Number.
Doing so will allow you to safely carry on your business and even avoid any fines that may result from failure to comply with relevant laws and regulations within the industry.
Select A Reasonable Rate
As an owner-operator of your new trucking business, determine the pricing for hauling loads will be crucial. Your selected rate should be enough to make you a profit as well as cover operating costs without turning clients away.
Arrange Required Trucks
In the trucking industry, the decision of which trucks you buy will prove crucial in determining the success and failure of your start-up venture. The vehicle of choice will ultimately tie into your business plan in which you would have selected cargo you would like to carry.
For example, if you are planning to deliver appliances or furniture, you may require bigger trucks. On the other hand, if you are delivering perishable goods, you may need to arrange a smaller, perhaps refrigerated vehicle to accommodate that. You will also have to decide between leasing or buying the equipment and compare the impact of both.