Thinking about starting your own trucking company? You’re not alone in that regard. Many people attempt to make the leap from trucker to business owner each year. Sadly, most end up failing in their venture.
Why? Well, these people might well be great truck drivers. Yet this doesn’t necessarily translate into them being great business owners. They might know the right routes and how to travel economically, but running a business involves many different components. Without all of them in place, a new outlet is destined to flop.
Not all hope is lost. With this helpful guide at your disposal, you can get on the right road towards success. If you’re ready to transition into being a prosperous business owner, read on for how to start a successful trucking company.
Know your startup and operating costs
Knowing your startup costs is an obvious point. If you’re looking at the trucking business loans available, you’ll understand you need to calculate how much money is required to purchase your truck, a computer, marketing materials, and so on.
What’s often overlooked are the operating costs once the business is up and running. You might secure a loan to cover those startup fees. Yet where is the money going to come from when you need to pay for insurance, fuel, permits, etc.? The hope will be through revenue generated, but you’re unlikely to be turning over a significant sum during the formative stage of your business.
When securing funding, make sure you receive enough money to also cover those initial operating costs.
Choose a niche
Deciding on a niche is an important step in the creation of your trucking company. This not only outlines the type of transport work your business will do, but it also determines what equipment to purchase, the freight lanes to service, and the rates to charge.
There are various different niches available. Try and pick one which has limited competition in your area, is protected against recessions and pandemics, and delivers year-round work.
Charge clients the right rates
When it comes to charging your clients, there are two avenues you want to avoid. Firstly, you don’t want to overcharge them. Clients will quickly look for alternative suppliers if they don’t feel they are receiving value for money. Secondly, avoid undercharging clients. They’ll be happy with paying less, of course, but your rates need to provide you with enough revenue to cover costs and make the work worthwhile.
Before you start accepting jobs, ensure the rates are right for both you and your clients.
Develop relationships with shippers
It’s fair to say that brokers can help out your business – particularly if you have an empty truck that needs filling. With that said, a broker is expensive when you factor in they keep around 10-to-20% of each load price.
This is why you should attempt to develop direct relationships with shippers. If you develop a big enough list of shippers, you won’t need to dip into work provided by brokers – and this means you can afford the high fees they charge.