When you own a small trucking company, you may have a difficult time competing with larger companies. With more trucks, these companies are usually able to charge more aggressively, hire drivers more quickly, get better supplier discounts, and generally have a larger capacity to deliver goods more expeditiously. Know the steps to growing your trucking business.
However, it is important to note that almost 91% of trucking companies in the sector are rather small. Hence, your existence in the market is just as, if not more, important. And with the right steps, your business may be able to achieve new horizons of success towards a more lucrative future. To put you on the path to smart growth for your business today, below are five steps that will aid you in this phase:
Approach A Variety Of Clients
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Holding on to just one client is unlikely to be a successful strategy for growth. Growing your business demands building a network of customers, rather than depending on just one major manufacturer or broker. Your trucking company can build a sense of reliability by building a list of clients and working with a variety of clients. This reliability will go far in attracting repeat business, as well as helping you grow your business.
To accomplish this, you should consider visiting the local manufacturers in your area, conveying to them your company’s capabilities as a transportation solution, and building relationships with them. Manufacturers in the target audience do not all need to become clients, only the most profitable and advantageous ones should remain on the list of clients. Building relationships with the right clients may seem tedious at first with mediocre loads, but over time you’ll be able to command higher rates and build a good reputation that will give you a better and stronger standing when approaching new clients.
Observe Trucking Industry Regulations
The trucking industry is constantly changing and incorporating new regulations as well. For example, in 2020, there were five new regulations that affected the industry. But it is vital to keep up with the changes in regulations and ensure compliance with the ones that already exist.
You will need to get all the necessary licenses and permits. But depending on the service you offer and the state where you live, your business may require a different number of licenses and permits. This also includes the need for carriers to update their Motor Carrier Number biennially. However, these will vary depending on where you operate. You will need a Texas DOT Number if, for example, you intend to operate interstate commercial vehicles in Texas.
Regular Assessment Of Finances
Knowing how much you spend is the first step toward saving money. Calculating your costs would involve determining your fixed costs, i.e costs that are incurred regardless of the level of load or cargo or the length of the trip. This includes your permits, insurance, etc.
Next, you will need to calculate your variable costs which will likely vary depending on the miles you cover, such as fuel. By subtracting these total expenses from your rates, you will be able to compute your profit figure. This can, then, help you set goals accordingly moving forward and also allow you to stay focused on your financial goals.
Cost-Efficient Fuel Buying
The cost of fuel can be the biggest expense of a trucking company, with over 53.9 billion gallons of fuel being consumed each year. Therefore, you should make sure you are purchasing fuel in the most cost-efficient manner.
Truckers, especially new ones, tend to buy fuel as if they were normal drivers, believing they would have to pay state taxes based on the location in which they bought their fuel. Unlike car drivers, truck drivers have to pay taxes on their fuel differently because they pay to the International Fuel Tax Association, which taxes them on the amount of fuel they use on their journey (in each state they drive through) regardless of where the fuel was purchased. The best method of buying fuel, therefore, is to not base your purchase on the cheapest pump price, but rather the cheapest base price.
Ensure Proper Paperwork
Since a small trucking business’s office is not the most visible part, it can often be neglected. It is easy for small fleet owners to see the paperwork as a non-essential part of the business that can be handled when the need arises. In any case, a well-managed office makes for a well-managed trucking company. Maintaining constant tracking of things like fuel, routing, and dispatching, as well as in-depth planning and scheduling, can really increase your business’s profitability.