Business Plan Basics

How to Start a Trucking Company

Business Plan Basics

A business plan is exactly that: a plan for your business. It tracks your business goals, company milestones, operating costs, and profits. It is a road map on how you want your business to grow . Consult and tweak your plan often to keep your goals in sight. When setting your goals there are a few questions to keep in mind –

What Is Your Trucking Niche?

On the bare minimum, your business plan should include details on your type of business. Trucking is a large industry; it encompasses several types of trucks and freight. To run a successful trucking company you need to be specific about what best fits into your wants and lifestyle.

Home Time

How often do you want to be home? Are you currently a 1-truck operation and want to be home every night? Then you probably do not want to open an over-the-road, long haul company. Pick the amount of home time that fits into your lifestyle.

Operating Area

The amount of home time you want will determine the size of your operating area. If you are home every night, you will focus more on to local runs. Alternatively, do you want to travel across the country? You will have less home time but a larger operating area.

Type of Freight

Once you determine how far you are willing to travel, determine what type of freight you want to haul. Are you an over-the-road company with dry van trailers or are you a regional company that hauls refrigerated goods? Do you own a flatbed trailer? Are you a boxcar company? Determining your trucking niche will influence your freight type.

What Are Your Operating Costs?

Trucking is more than freight hauling. There are several upfront and continual costs to consider. Calculating your operating costs ensures the loads you haul are profitable for your business. Accepting low-paying freight or underbidding on loads can make it difficult for you to pay for the equipment, permits, and bills necessary for your business to stay open.

Cost-Per-Mile

Make a list of all of your business expenses (fixed and variable): fuel costs, equipment maintenance, permit fees, insurance payments, etc. Determine how much money your business will need to make a year/month/week in order to stay open. Use this number to determine your cost-per-mile. This is the amount you need per mile to break even and should be used as a base when negotiating loads. Knowing your cost-per-mile helps you track your profits and determine your growth goals. For example, when you know how much profit you will make each week, you can estimate how soon you can add another truck to your fleet. Pay attention to you profits and expenses.

Market Trends

You will also want to pay attention to your market. Which areas tend to pay high rates? Which areas are known for lower rates? What is the current season? If you want to haul produce, be aware that you will probably have an easier time finding loads during harvest season (summer and fall) while spring and winter may be slower for you. Plan your finances accordingly and adjust them on a regular basis.

How Will You Find Freight?

You determined your type of trucking company, the distance you are willing to travel, and your base cost-per-mile. Now it is time to find freight fitting within those parameters. Be aware of your limitations.

Common tools for finding freight include load boards and dispatchers. Load boards are designed to help you find freight within your hauling capacity. If searching a load board seems daunting, you can also utilize a dispatcher who will comb the load boards for you. Both of these options are great for finding customers. However, the best way to find loads is to have steady customer with reliable freight lanes. Focus on providing great customer service. This will help build your reputation in your industry and make it easier to build a customer base.

Make yourself a goal. How long do you want to continue searching a load board or utilizing a dispatcher? How many customers do you want to convert to regular business opportunities? How long do you think this will take? How do you plan to keep customers interested in your business? Keep these types of questions in mind as you continue to grow your business.

Remember to track everything with a business plan. A business plan is fluid and should change over time. Refer to it often to make sure you are on the right path.

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By |2018-08-31T11:58:10+00:00February 7th, 2017|Starting a Trucking Company, Trucking Business Tips|0 Comments

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