Trucking business is a very profitable business venture, which is highly rewarding. The trucking industry is a cornerstone of the transportation industry within many countries. For example, in the USA alone the industry is worth $700 billion. 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 explains how to start a profitable trucking business. It also explains some of the risks and opportunities that are available for the entrepreneur. It covers both the individual private investor and the corporate venture capitalist levels of entry.
Size is not everything in the trucking industry – you do not need a large fleet in order to start up this 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.
Make sure you have a comprehensive business plan
The failure to plan is the beginning of business failure. The trucking business plan must be clear and succinct enough to give your potential partners, clients and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain the nuances of the business that you propose. At the very minimum you need to have the following included:
- The mission, vision and operational strategy
- Market Analysis And Customer Segmentation
- A business case showing that the business is financial viable and sustainable
- A marketing and customer care plan
- An organizational chart and human resource policy
- A three-year expansion outlook
- A risk and rewards Analysis
You will need to make an informed decision about the business type that you will adopt for your company. For example, you may decide to be a sole owner or may open up a Limited Liability Company (LLC) or even a Public Limited Company (PLC). Each of these options requires very specific application processes for permits and registrations. The business type you select will determine who owns, runs and supervises the operations of the company. It’s also better to have a website for your trucking business.
Make adequate preparations for the trucks
You will need a truck and a driver as the minimum starting point for the trucking business. However, that is just the beginning of your story. There are many other things that you need to take care of. First of all, your drivers must be properly licensed with up to date records including health checks and mileage restrictions. Driving a truck is very different from driving a small car. Therefore; specific training, testing and review procedures are mandatory. You are not necessarily required to purchase a new truck; a good second hand alternative will do just as well. The advantage of having new trucks is that you have lower maintenance costs and better reliability on the road.
The trucks that are selected must be large enough to safely carry the items that you propose to transport. You may need a security team given the high risk of highway robberies and absconding drivers. There are specific requirements for transporting sensitive items such as cash, food, medicine and other perishables. Your local council as well as the state will have a list of regulatory requirements which must be diligently followed lest you lose your license to operate the trucking business.
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.
Identify, cultivate and satisfy your customers
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 organizing some of your own. Remember that once a reputation is lost, it is nearly impossible 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. 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.
Get your house in order right from the outset
Even though the virtual office is becoming popular; you still need some sort of premises for your trucking 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.
To conclude, we must answer a vital question: how much will it cost? The truth of the matter is that no trucking business is identical to another. You can start with as little as $30,000 or as much as $200 million. It all depends on what you want to achieve and the resources that you have. However, regardless of the scale that you begin with; it is important to have a budget. You must honestly, diligently and consistently list all the possible items that you need. After costing them (bearing in mind the inflation rates and the state of the economy); you will have a working budget.