What Are The Top 5 Tips For Starting A Trucking Company?
Hello again, Mike Lawrence here from InsureMyRig.com, the premier trucking insurance agent on the web. InsureMyRig.com is your best source for trucking insurance information, fast quotes, and great customer service.
Today, I’m going to give you my Top 5 Tips for starting a trucking company! With the nation’s economy in full-blown recovery, there are opportunities for smart businesspeople to start their own company, and drive towards the American dream. Startup businesses have a high failure rate, and trucking companies run on thin profit margins. Hopefully, my tips can help you to not become one of those statistics; so, let’s go take a look at our list.
Tip #1 Start with one or more core customers
In the bar/restaurant business, it’s said that your regulars are the ones who keep the lights on; they are the ones you count on to pay the bills, and you need to treat them like gold. Core customers, who can promise regular loads and prompt payment are a huge asset; relying on brokers or internet load boards takes up much of your management time chasing loads and money. Use those broker loads to fill in the gaps…but depend on, and work hard to cultivate good core customers.
Tip #2 Have 90-120 days operating capital on hand before
starting Trucking is not an inexpensive business to start. Truck payments, registrations, insurance and definitely fuel will drain your bank account even faster than my wife can drain mine! Even in a best-case scenario, you will not get paid for hauling a load within 60 days of doing the work; most shippers and brokers pay anywhere from 90-120 days after, and during those days, your wheels still need to be turning. One of the biggest reasons for new venture failure is a lack of good financial planning, so protect yourself from that pitfall and you’ll increase your likelihood of long-term business success.
Tip #3 Improve your credit rating
Speaking of good financial planning…do you know what your credit score is? There are many internet sites where you can get a credit report, such as freecreditscore.com; make sure you check your report for accuracy prior to startup and dispute any discrepancies. Truck dealers, insurance underwriters, and banks will all use your credit score to determine lending and premium rates. A good credit score will make a huge difference in your business’s bottom line; and generating profit is a bussiness’s primary goal. Get good credit, and keep it good by paying your bills on time, every time.
Tip #4 Start Small
An entrepreneur, by definition, is a risk-taker; someone who wants control over their future. A smart entrepreneur knows not to take on TOO much…too much risk, too much debt, and too much work! Trust me, as your own driver, manager, bookkeeper and salesman, you will have plenty of tasks to keep you busy in your first 12 months. My advice would be to concentrate on all of those; and not worry yet about hiring new drivers until you’ve got a very tight understanding and control of your other duties. Besides, no one else is going to take care of your business and your customers as well as you can. Start small, and grow carefully.
Tip #5 Pick 3 professional advisers
All businesses need outside professional advice; and trucking is a very specialized business. Make sure that your accountant, lawyer and insurance agent all are experienced in handling trucking accounts; this is a bad time to pick your brother-in-law to be your business attorney! All of the outside advisers that you use should be able to provide references of other satisfied trucking clients. Our family-owned insurance agency, for example, has been serving the truck industry for 80 years, and we are members of local, state and national trucking associations. We can provide you with competitive quotes from A-rated insurance carriers, and help to make sure you stay compliant with government regulations. We’re the best!
That’s it for this time around. I hope you find this information helpful; if you have further
questions or comments feel free to email me at [email protected]
Drive safely out there!