Trucking is the conveyance of freight by trucks. Trucking business is a very profitable business venture, which is highly rewarding. The trucking industry is a cornerstone of the economy within many countries. Although a potentially lucrative business; joining the trucking business sector has very specific requirements in terms of finance, logistics, marketing strategy and customer care. This article will outline how to start the trucking and logistics business, and the trucking business plan – PDF, Word and Excel.
Size is not everything in the trucking industry – you do not need a large fleet in order to start up the trucking and logistics business. There are stories of people who have started a successful trucking business with nothing more than a single vehicle. At the same time, the trucking business industry is diverse and rich enough to accommodate very large conglomerates with impressive fleets. Whatever option you choose; there are some critical issues that you must take into consideration as you come up with your trucking business plan.
Trucking Business Model
An Important Choice: Owner-Operator Or Start A Fleet
The trucking business can be done using several approaches. The most basic or market entry one is being an owner-operator. This shows you that you can start the trucking business with just one truck. The other approach is putting together a fleet of trucks i.e. a trucking company. It is advisable to have at least 3 trucks if you are to realize good profits. With a fleet of trucks you can get contracts to haul goods from a wide range of clients. You can also hire out your trucks for use in moving freight.
Multivariate Business Model
Despite which approach you choose, the trucking business model is a bit intricate. This is because there are several variables you must factor in to determine your pricing. For instance, you have to factor in distance to be covered, load size, type of goods, and so on. Then you have to determine a service charge that offsets all the related costs leaving you with a profit. That is why it is recommended to get transport management system software. This helps you to make iterative calculations to determine whether or not a gig is worth it. It also helps you know what you can tweak to widen your profit margins.
Although your business will be on the road; you still need some sort of premises for your trucking and freight business. You can hire an office in the beginning and then purchase your own later on. There are many providers that can furnish the premises and give you a secretariat to manage your administrative work. The work of the office is vital to the rest of the business. You should not treat it like a separate entity which does not need to conform to the highest standards of customer care. Instead try to ensure that you have a seamless service provision that is uniformly impressive and excellent. You also need secure premises where your trucks will be parked when not on the road. The trucking business plan should cater for funds to purchase or lease premises.
Vehicles and Equipment
Obviously you will require trucks in order to start the trucking business. The vehicles can be imported from other countries where they are cheap or you can buy them locally from your country. The number and type of trucks required will depend on the amount of capital which you have and your target market. You will also have to make a decision of whether to buy brand new trucks or used trucks. When starting the business with limited capital, it maybe better to purchase used trucks. The advantage of having new trucks is that you have lower maintenance costs and better reliability on the road.
There are several factors to take into consideration when purchasing the trucks. Some of the factors include: purchase price, fuel consumption, transmission mode (automatic vs manual), gross vehicle mass (GVM), truck engine horsepower, availability of sleeper cab, new truck vs used truck. The trucks that are selected must be large enough to safely carry the items that you propose to transport. If you have limited capital, you can always start your trucking business with just one truck. Trucking business is very profitable and if you reinvest your profits, you will be able to purchase more trucks.
Equipment required for the trucking business include garage equipment, tents, ropes and repair tools. The truck drivers should always travel with basic repair tools such that if they encounter minor problems along the way, they can always fix the trucks. The trucking and logistics business plan should include the costs of purchasing the vehicles and equipment.
Truck Servicing And Repairs
Regular Truck Servicing Must Be A Principle
If you are to experience long term success in the trucking business, you must prioritize regular truck servicing. Trucks have prescribed servicing regiments that they must undergo periodically. This is something you can have done in-house or you can outsource. Trucks will normally cover long distances which is why they must be serviced regularly. How efficient your trucks will be is a function of how often you get them serviced. Your trucks will even last longer as well. This will translate to profitability in the long run because your brand will be reputable, getting contracts all the time. The costs of servicing should be included in the trucking business plan.
Early Detection Of Potential Problems Is Paramount
Servicing in itself helps in early detection of potential truck problems. However, it should be the custom to regularly check your truck(s). This is to see if all is in good working order. When trucking it is also wise to make regular stops to do some checks. Early detection will make repairs, if there are problems, cheaper and less tasking. Faulty starters, faulty brakes, tyres defects (or low pressure), and overheating of the engine are typical. Have an appreciation of how to do basic repairs. This will eliminate the need to pay to get professionals do the repairs. However, when in doubt it is best to get professional assistance.
Trucking Business Insurance and Licences
One of the critical requirements that can potentially have catastrophic consequences for the public as well as the business is insurance. It is advisable to have a comprehensive insurance plan. The costs of such a package are more than offset by the potential losses if you were to have an accident. As a business; the trucking company may be liable for very significant punitive damages particularly if there is a loss of life. Without adequate insurance, the trucking company business could be bankrupted by compensation claims.
The trucking industry is regulated and the specific licences depends with the country. First of all, your drivers must be properly licensed with up to date records including health checks and driver licences. Driving a truck is very different from driving a small car. Therefore; specific training, testing and review procedures are mandatory. There are specific requirements for transporting sensitive items such as cash, food, medicine and hazardous goods. Your local council will have a list of regulatory requirements which must be diligently followed lest you lose your license to operate the trucking business. The trucking and logistics business plan should include costs for the insurance and licenses.
Staff and Management
Operations staff is a necessity. Operations staff are responsible for handling the operations of the trucking business. They include drivers, assistants, logistics personnel, mechanics and operations manager. You will need a truck driver as the minimum starting employee for the trucking business.
Finance and accounting employees are also required. For a small trucking and logistics business, the duty can be handled by the owner of the business or a part time accountant. However as the trucking transport business grows, there will be need for full time employees who will be responsible for the finance and accounting needs of the business. Their duties will include usual day to day transaction accounting for business, managing the cash flow of the trucking business, and always ensuring the enough funds are available for the day to day needs of the trucking business.
Marketing is essential for you to be successful in the trucking and logistics business. To have a stable cash flow, your trucks should always be on the road. This is only possible if you are marketing your business. Thus your trucking business will also need marketing and sales staff. You can also have part time marketing employees who are paid on commission basis based on the number of clients which they bring to your business. Your trucking business plan should cater for the wages and salaries of all your staff.
Capital for the Trucking and Logistics Business
The amount of capital required for the trucking business depends on the size of the business. It all depends on what you want to achieve and the resources that you have. When starting a trucking and logistics business, most of the capital goes to acquiring the trucks. You can get a loan from the bank, or funding from investors, to use as capital to start your trucking business. If you plan to raise capital from investors and a loan from the bank, you need a good trucking business plan. If you don’t have access to investors and bank loan, you can use your personal savings and start small, and grow your trucking business overtime. Trucking business is very profitable, so if you reinvest the profits you get, you can grow over time. Even if you are not planning to get a loan, you should still get a trucking project plan to guide you in starting and operating the business. It is essential for you to have a trucking business plan before you venture into the trucking and logistics business, so that you know all the costs involved and you make an informed decision.
Pay Attention To The Various Segments
The trucking industry is highly segmented and quite competitive. You must understand that segmentation can come from the nature of loads to be hauled. There are different types of trucks e.g. flatbeds, dry vans, tankers, and refrigerated trucks, amongst others. Segmentation can also come from the average distances to be covered e.g. short haul, medium haul, and long haul. Long haul is over 250 miles and medium haul lies between 100 miles and 250 miles. Short haul is for distances of 100 miles or less. Segmentation could be pertaining to the industry in question. Trucking dynamics vary across the various industries e.g. manufacturing, mining, agriculture, wholesale and retail, and energy.
Study Trends, Consumer Behaviour, And Competitors
For you to be successful in the trucking business you should get intimately acquainted with important statistics in the industry. Examples of this include multiyear outlooks and forecasts. This is important especially statistics that are instructive to your ultimate trucking business strategy. You have to become knowledgeable in the status quo of your respective trucking industry. Get to know what is trending e.g. the use of technology in trucking is on the rise. Find out what the most common trucks and load types are. Study on the various consumers in your intended target market. What do they usually need in terms of trucking services? Dig into what your direct competitors will be – their offerings, operations, and market shares.
Market for the Trucking Business
The market for the trucking industry is very huge. A lot of industries require trucking services. These include agriculture industry, mining industry, manufacturing industry, construction industry, fuel industry, supermarkets, wholesalers, distributors and raw materials suppliers. Companies and individuals need trucks to transport bulky goods.
Sales And Marketing Strategies
A good reputation for reliability, consistency and good service are the key ingredients for developing the customer base for your trucking business. Most of the people that use haul freight focus on repeat business with those service providers who have met their needs and gone the extra mile before. You need to build those relationships by joining the community of truckers and their customers. That means not turning down invitations to industry events and actively organising some of your own. Remember that once a reputation is lost, it is hard to recover it. You must be proactive in the marketing strategy of your trucking business. That means going out to meet and woo customers rather than waiting for them to come for you. Later on when the business has acquired a reliable client base; you may find that previous customers are actually selling your business for you via their review and recommendations process.
Do not forget the power of the internet. If your trucking business is to stand out, you must come up with robust marketing and sales strategies. It all starts with having a powerful website and it should be augmented by active social media accounts. It is smart to incorporate a blog element on your website. This will enable you to regularly post engaging content related to the trucking industry. This is effective in generating leads. You must leverage on many online trucking communities. There are many social media pages or groups exclusively for truckers. There are also online marketplaces where you can put up the profile of your trucking business. Your trucks should be properly branded because they are essentially ad material on wheels. Make sure that you have a functional website that includes a welcome message, clear details about what you do and a purchasing process that is convenient so that people can order without physically visiting your premises. A proper marketing plan should be included in the trucking business plan.
Keys To Trucking Business Profitability
First off, limit operating costs as much as possible. Regularly service and do maintenance for your trucks. This cuts out costs related to repairs. You will also avoid losses from downtimes or loss of clients. Be thorough in your costing so that you do not overlook and can even tweak costs. Always ensure you are booked, with your trucks on the road. You should also strive to find high revenue gigs but with short distances covered. Get a GPS tracking system set up to ensure operators are always on-schedule. Overall, create the best client experiences so that you get more work via word of mouth. Make sure you have a good trucking business plan. The trucking business is full of unlimited business opportunities. It is common to see trucking companies today that started off with one person as an owner-operator. Steady growth is possible; the trucking business is quite scalable. The many niching options available are also a bonus.
Pre-Written Trucking Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements
For an in-depth analysis of the trucking and freight business, we encourage you to purchase our well-researched and comprehensive trucking business plan. We introduced the business plans after discovering that many were venturing into the trucking transport business without enough knowledge and understanding of how to run the trucking and logistics business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.
The StartupBiz Global trucking transport business plan will make it easier for you to launch and run your trucking business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the trucking transport business.
Uses of the Trucking Business Plan (PDF, Word And Excel)
The trucking business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your freight trucking business
- As a trucking business proposal
- Assessing profitability of the trucking business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Trucking Business Plan (PDF, Word And Excel)
The trucking business plan include, but not limited to:
- Marketing Strategy
- Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
- Risk Analysis
- Industry Analysis
- Market Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Why some people in trucking business fail, so that you can avoid their mistakes
- Ways to raise capital to start your trucking business
The Pre-written trucking business plan package consist of 4 files
- Trucking Business Plan – PDF file (Comprehensive Version – 74 Pages)
- Trucking Business Plan – Editable Word File (Comprehensive Version – 74 Pages)
- Trucking Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 43 pages)
- Trucking Business Plan Automated Financial Statements – (Editable Excel File)
The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the number of trucks, pricing rate per KM etc, and all the other financial statements will automatically adjust to reflect the change.
Click below to download the Contents Page of the Trucking Business Plan (PDF)
Get the Trucking Business Plan (PDF, Word And Excel)
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