Moving things around from one state to another can be quite a journey. That is why the truck business is profitable and competitive at the same time. Which may leave you wondering, is it worth trying to start a trucking business?
Starting a trucking business is certainly is worth the effort and the work involved because the benefits are great! If you want to make money in a very lucrative market space, then starting your own trucking business may just be the perfect fit.
What are the Benefits of Starting a Trucking Business?
Here are the reasons why trying to start a trucking business is worth it:
- Be your own boss. Are you a person who likes to be in charge of your time? Do you treasure your freedom? Then being your own boss with your own trucking business may be the right path for you.
- High demand. Trucks offer longevity. Trucking opportunities are not going away anytime soon. They are an essential part of the transportation and movement of goods. 80% of all cargo in the USA is transported by truck. By starting a trucking business, you’re tapping into a service market that has a lot of demand.
- Truckers are never bored! You can choose to do short local hauls or long hauls. If you love to travel, long hauls may be your best choice. If you are an introvert or an extrovert, trucking can be a good fit for either personality.
- Trucking is profitable. The trucking industry brought in over $800 billion in revenue.
Is Owning a Trucking Company Profitable?
Trucking is a complex business. It is not as easy as buying a truck and hitting the road.
Even those who have been in it for years will tell you that you need some proper planning and goals.
Always remember that most businesses fail in their first five years.
With proper goal setting, smart planning, and tenacity; you can have a very profitable trucking company.
You can be the best trucker in the world, but if you don’t know the business, it can fall apart.
#ThrowbackThursday In 1938, Frederick McKinley Jones designed a portable air-cooling unit for #trucks, which greatly improved the long-haul transportation of perishable goods. Long-haul refrigerated transportation wouldn’t be possible today without his contribution. pic.twitter.com/tAWxa1wfB2— Tailwind Transportation Software (@tailwindtms) April 15, 2021
How Do I Make My Trucking Business Successful?
1. Discover what you want to haul.
Niching in one particular product or line of products will help you increase your profits. There are riches in the niches, as they say.
‘Dry van’ trucks are something the biggest companies specialize in. It can be tougher to find your footing here.
Refrigerated trucks, also known as reefers are more expensive than dry trucks but you will be in high demand.
You can niche in transporting meats, dairy, and produce that needs to remain cold, with a refrigerated truck.
Tanker trucks, also called “tank wagons” or bulk trailers are highly specialized and may require additional training on the different types of equipment.
2. Keep accurate records.
All shipments you dispatch should be recorded. There is software built for this called a TMS system. Ensure that you put in all details as early as possible.
Each shipment should have the name of the client, the shipment details, and the driver. Also, back up your records at regular intervals in case of a crash.
Make sure you brush-up on data retention laws. Some documents like the proof of delivery or “POD” must be retained for up to 3 years.
3. Charge adequately.
Many people want to be conservative with their rates. Charging less to get started may seem like the obvious solution to get more contracts but remember you need to also make money.
Learn how to charge enough so you are getting business, but also creating profits so you can grow your trucking company.
Clients are ready to pay for trucking services. You must also make sure that your rates cover all your overhead. Such as maintenance, fuel, lodging, etc.
4. Cut out freight brokers.
To maximize your profits, increase your direct connections to shippers.
Brokers take a cut of what the shipper pays. This means you get paid 10% to 20% less than what they receive. By working directly with the shippers, you can increase your profits.
5. Manage your cash-flow.
Money is always moving around in a trucking business. Understand and keep watch on your expenses.
There’s fuel to buy, truck payments to make, and drivers to pay. Those are just a few of your expenses.
Not all of your invoices will get paid right away. You need to take this into account because your bills may be due at a different time then you are getting invoices paid.
There is specialized trucking accounting software you can purchase and use in your business.
One of the things you can do to help with cash flow is to sell some of your invoices to a factoring company.
Factoring companies will pay for your invoices, taking a small percentage to perform this service.
Then when the invoice is paid, the factoring company keeps the money as they already paid you for the invoice.
6. Properly maintain your truck fleet.
Your trucks are the heart of your business. A breakdown can result in a lot of lost money.
Breakdowns can happen. To mitigate the number of breakdowns you have with your fleet, make sure you put all your trucks on a maintenance schedule.
Starting a trucking business is worth it once you know what you’re doing. Good luck with your trucking business! Onward and upward! Let us know about your successes!