Are you ready to go independent and start your own trucking company? It’s a dream come true for many truckers, but you’re going to need some business savvy to keep it up for the long-haul. Here’s what you need to make a success of your trucking start-up.
#1 Financing Your Fleet
The first step is securing financing to start you fleet and find a base of operations. You will need a sound business plan to secure a loan and investors. Most banks can help you with ordinary business costs, but not building a fleet. For that, you may want to look into truck finance brokers. Once you have trucks, you’re in business.
#2 Finding Clients
Once you have a fleet, now you need clients. Most start-up trucking businesses start finding clients on load boards: online marketplaces where owner-operators can advertise rates and connect with brokers.
#3 Maintaining Cash Flow
Now that you’ve found clients, you need to maintain cash flow. You have employees, fuel costs, repair expenses, taxes, and other overhead to pay. Meanwhile, trucking invoices are only paid 30, 45, or even 60 days after receipt. That can leave you with creditworthy accounts receivable, but no cash-in-hand when you need it.
When payment is still weeks away and you have costs now, it’s time to look into factoring services for trucking companies to keep up your cash flow. Invoice factoring is an essential cash flow hack that will keep you in business. It’s used by start-ups, high-growth companies struggling with working capital, transitioning businesses, companies going through a change of ownership, and companies experiencing a difficult year. Companies in all financial shapes use invoice factoring to bridge the gap.
Find truck factoring services from a freight factoring company that offers lower rates.You can find 1.59% flat fee factoring from Accutrac Capital, as well as other more flexible rates. Their rates also include 0.49% 10-day factoring, or 0.022% per day line of credit on a factoring line of credit. You need a freight factoring company like Accutrac Capital that’s flexible and meets your business’s needs.
#4 Cutting Expenses
You need every dollar you can get when you’re just starting out. With a high debt load, you need to make sure every penny is going back into your business, and that means cutting out wasteful expenses. Introduce best practices early on to get more profit out of your revenue:
- Stop Idling – The average long-haul truck idles 1,800 hours per year, consuming 1,500 gallons of diesel. Can you afford $3,750 a year per truck? Because that’s what idling costs you at a price of $2.50 per gallon of diesel.
- Avoid Costly Repairs – Don’t get cheap on regular maintenance. It will cost you more in the long-run to fix major breakdowns, not to mention the havoc a breakdown can cause to your delivery schedule.
- Use a Route Optimizer – Out of route miles will burn up fuel and labor time. Use a route optimizer to minimize out of route miles and streamline your delivery process.
#5 Finding Your Niche
In the competitive trucking industry, you need a niche to make your own. Maybe you have your niche in mind already, maybe it’s something you’ll discover as your business and your reputation grows. Don’t ignore the power of branding, either. Build a website and get a great logo designed that speaks to your specialization.
With these 5 tips, you can make your trucking start-up work.