The logistics and transport industry is highly competitive, but it can be immensely profitable once you’ve got your foot in the door. You may be a great trucker and think that you can start a trucking business, but you may find that you’re not such a good business owner. Growing a trucking business takes more than being able to drive a truck like a pro. Here’s how you can ensure your logistics/transport business gets off to a booming start:
Source The Right Equipment For Your New Business
The first most important thing is getting the right equipment for your new business – and there’s no denying that it’s one of the most expensive things you’ll spend money on. You need to decide whether you’ll buy or lease the equipment. You should plan a strategy ahead of time, so you know what you want, and you’re not dazzled with information that simply isn’t right for your business. Some companies are great, but others may try to upsell you equipment and packages that don’t benefit you, so don’t be fooled. What you choose to do can entirely depend on your unique situation, so there is no right or wrong answer to the ‘buy or lease’ dilemma. Weigh up the pros and cons and make up your own mind.
Know Your Expenses
You must know your expenses in advance so you can plan for them. Your expenses will likely be as follows: maintenance, truck repairs, truck and trailer payments, fuel, and the cost of your work. Working this into your budget and knowing your numbers almost off by heart is one of the best things you can do.
Figure Out What Kind of Licenses and Permits You Need To Get Started
When starting just about any business, you need a variety of licenses and permits, however, it will depend on where you are and what exactly you’re doing. The requirements for getting a permit for your business can vary by state. That being said, there are some general rules you can use to figure out what kind of license you need for your business. Many states do require you to have a business permit and certain tax forms so you can legally operate your business.
The right licenses, as well as the process you’ll have to go through to get the proper licenses will be completely different depending on where you are. It’s a good idea to seek out legal advice from a knowledgeable lawyer to help you through the process and ensure you are following everything just as you need to be.
Make sure you also look into tax permits. You will need to file taxes with the state and local government, which requires you to register your business. You might need to get a federal tax identification number, but this can depend on your state’s regulations too.
Study The Competition Carefully
If you’re planning on starting up a logistics or trucking business without studying your competition carefully first, you’re making a big mistake. You need to figure out how you’re going to fit into an already booming industry, and what you’ll do to make sure you differentiate yourself from the competition out there. Why are people going to choose to work with you, rather than your competitors? How will you be different? All of this needs to be thought about, or you could get buried under the sheer number of competitive businesses out there.
Run Your Office Right
It isn’t just important to have a wide trucking knowledge base, a fleet of quality trucks, and great employees that know what they’re doing. A well thought out office to back-up your business is essential. The size of your fleet will depend on the size of your business, but it’s usually better to start out smaller and then build it slowly. Consider how you want the office to run. All of the best trucking companies must run on efficiency, with the person at the helm with a business owner mindset. You really need to get into the entrepreneurial mindset if this venture is going to be a success. Hiring an office manager may be a good step to take if you’re unsure of how to do this yourself.
Avoid Cash Flow Problems
Avoiding cash flow problems in your logistics/trucking business could be the difference between a struggling business and one that is thriving. Many trucking businesses will experience cash flow issues at one time or another, due to having to wait so long for money to be paid. Many must wait a long time for a load that was delivered recently, perhaps up to 60 days. Then there are things like fuel and repairs to consider in the meantime – what strategy will you use to avoid cash flow problems and be able to pay everything you need to pay on time? You can invoice and give incentives for clients to pay early. There are companies out there that specialize in helping businesses to settle invoices and cash flow issues.
Develop a Business Plan
It’s very rare that a successful business can start without a business plan. A business plan not only helps you to secure funding if you need it, but it’s also something you can continue to look at and refine over the years, staying as focused as possible along the way. You should include the following in your business plan:
- Overview of your plan and summary
- Financial forecasts
- What equipment you need and why
- Who you’re planning on hiring and why
- Anything else that is related to your business
Make sure you keep your plan short and sweet and stick to the facts. Nobody is going to want to sit through a 100-page business plan.
The trucking industry is a fast-growing industry and can be lucrative if you make proper plans and execute them efficiently. Using the information here could help you understand how to start a trucking company to get your business off to a booming start. Good luck!