Starting your own business is always a fascinating idea. You work for your own self, be your own master, chart out your own mission & vision for the company, and most importantly, you can achieve financial and personal growth. Above all, you start to feel a sense of pride by taking that huge step.
The transition from being just another truck driver to a proud fleet owner is exciting. But once you take that brave plunge, you will encounter a new world with its own intricate complexities & issues.
Starting a new business and successfully running your business are two different things. You will undoubtedly face new challenges along the way, but you need to know how to ace them. Yes, it’s important that you lay the foundation of a successful, profitable & sustainable business in the long run.
The following are the top 5 crucial things you need to know as a new fleet owner in the trucking business:
You need to Plan Well Ahead:
The Trucking industry is massive, accounting for nearly 70% of the total freight tonnage of the country so anything and everything happening in the country can have a high amount of impact on its operational efficiencies. Even a celestial event like the recent Solar Eclipse, which passed over the continental US for the first time in nearly forty decades, had made some states limit the number of trucks that could enter their territories, affecting the trucking industry’s revenues.
Problems like these arise every now and then, so you need to be planning ahead, well in advance to avoid any significant dent in your costs or running expenditures. The trucking business traverses the whole country, and you don’t know where your next cargo would need to be transported to, so it’s better to plan things rather than having a knee-jerk reaction, which could harm your business in the short and long run.
Always maintain a cash fund/ reserve:
While it may look like a highly lucrative business from the outset but the margins in the trucking industry have become exceedingly severe in the past few years. In fact, this reason forced most truck companies out of operations.
With profit margins so slim and expected clearance times for your payments sometimes running into months, it’s not surprising that you need to maintain a cash reserve to keep your business operations running smoothly.
Whether or not you get paid by your clients on time, you will have to pay your drivers on time, take care of truck maintenance issues, and account for fuel, office expenditures as well as a bunch of other things to keep your business running. So it’s better to maintain a cash reserve which you can utilize in need rather than being sorry at the last minute.
Stay ahead of the Technology:
The time when trucking used to be a low-tech business is a thing of the past. Truck companies today are increasingly dependent on technology to stay ahead of the competition. Failure to do so means losing out on business. Like every other field in today’s era, your trucking company would definitely be better off while utilizing the latest technologies to complete tasks more efficiently.
Things like ELDs, Breakdown assistance apps, chat group programs for driver assistance, automatic maintenance updates & that great Uber Trucking trend which literally will reduce redundancy to almost nil, are just some of the few technological utilities that make your business much easier to run while lowering the costs simultaneously. Your trucking business needs to be ahead of these advancements always to keep itself in the competition and afford better pricing, thereby attracting more clients in the long run.
Knowing how to maintain and attract drivers:
Drivers are a vital cog in the trucking business, but in recent years, the problem of driver shortage has made it harder for fleet owners to run and expand their businesses.
The industry is currently facing an acute shortage of drivers with approximately 48000 positions currently going unfulfilled according to the American Truckers Association. This can be attributed to many problems like the aging workforce, failure to attract younger/millennial talent or even the pay model, which definitely needs a revamp. As a fleet owner, these crucial issues could be a major roadblock in your plans for growth or even day to day operations.
You can certainly circumvent the industry trends and make your fleet a bit more attractive towards drivers by deploying ‘driver friendly strategies.’ These can include more paid holidays, better pay models, investing in driver healthcare programs & more. You can also use tech-friendly ways to advance your recruitment strategies and gain even better results than the industry averages suggest.
Never Take Compliance for Granted:
As a new fleet owner, it’s quite important to remember the fact that the Government agencies are not friendlier to trucking companies that they are to the general public. One bad day for your truck driver and you might be handed down a hefty penalty, or even worse, your business license could stand temporarily or permanently suspended.
Safety and legal compliance are never taken loosely by Government agencies like FMCSA or even DOT. These organizations protect the interests of general public, no matter how detrimental a decision may be to trucking companies.
Make sure you hire a professional Safety & Compliance firm or even an independent attorney to allow you to protect your interest while also reminding you of the new laws and regulations to keep you out of trouble. It’s not always a cost, but an investment that will definitely provide an impetus towards your growth plans, benefitting you in running the business with much more confidence that could be done otherwise.
The bottom line is that your trucking company is a growing enterprise. While entering the arena as a new fleet owner has its own intricate challenges, the profits are definitely there to be made if you do things correctly and plan ahead.
The best advice to a new fleet owner is to keep a watch on your back so that you can progress ahead without worries and establish a prosperous, sustainable & increasingly profitable business in the trucking industry.