Trucking is a competitive industry that millions of people try to break into every year. Also, many truckers seek to make the transition from truck driver to owner operator, and unfortunately a lot of them fail. If you want your trucking company to make it avoid these common mistakes.
New Guys Don’t Plan
Sometimes new trucking company owners don’t take the time to consider what will make their business work or fail. Instead, they say goodbye to their managers and take off down the road without being sure of their next move.
They don’t sit down with a CPA or business professional who can help them draw up the plans for getting equipment, hiring a few people, getting loans, and more. They go in blind and get hit with too many unknowns, and often times crawl back to their manager to ask for their job back as a result.
They don’t plan for more than one load at a time. They haul something to a city far away and drive home with an empty trailer wasting days at a time. Try to get a few loads near each other to make getting out there and back home worth it.
Their Finances are a Mess
With a bad credit score and bad financial planning bring on a lot of problems fast. If you spend all your money on one top of the line rig what will your other drivers use? Something that should have been left in the junkyard years ago?
Don’t just jump in and buy something. If your credit is a mess you’ll have trouble getting a proper loan, or your monthly rate and interest charges may go through the roof. Consider leasing as a cheaper option. There are even lease to own options available.
Another rookie mistake is not having any money set aside for maintenance and accidents. Trucks need regular servicing and run into problems just as much as we do, so be prepared in the event of dents, dings, and accidents. Will you be able to stay afloat if one of your trucks can’t be used for a month?
Then they also forget or don’t realize that shippers pay out on 40 to 60-day bases, so for a load they deliver today, they might not get paid for it for up to two months. What in the world? No money for two months? Then how will you pay your bills and employees? By planning ahead by having savings in advance ready to go in order to avoid payday loan services.
They Cut Corners
Instead of taking the time to call people in their area and develop quality relationships with shippers they just hit the load board over and over for quick, one-day loads that are competitive and don’t offer much return.
They get shoddy equipment that quickly malfunctions and hire less than reputable truckers that will deliver a load for cheaper, but don’t exactly build the best relationships with truckers.
They skip out on quality people to work in the back office at home. Without someone to do the paperwork and filing then it will all come back on you. Do you have time to handle everything yourself? Will you remember to keep up with tax filings and DOT regulations?
They Don’t Market Themselves
How can shippers choose you if they don’t know who you are? Put your brand on the side of your trucks. Put your drivers in uniforms with hats and shirts that display the name of your company.
Also, you can have a small team at home that works on making outbound calls to shippers in order to set up meetings to introduce yourself and talk about your business. As a result, long lasting relationships with repeat customers can be built.
You need to invest a little into having a professional website that displays your contact information. Plus, take advantage of social media to display your trucking company to millions of people online. Eventually, as your budget grows you can invest in google and social media ads.
They Start off too big
A lot of new guys cut off more than they can chew in the beginning and may choke as a result. Instead of slowly growing with two rigs they jump into business with five new trucks. If you don’t have loads for them to carry they’ll sit and collect dust as the bills pile up.
They hire truckers from all over. Someone in Charlotte will start paying guys in New York and Chicago instead of getting in with their local guys who usually are more reliable with cheaper rates. Creating a few personal relationships with truckers you can give raises to as your company grows will take you a lot further than have too many truckers all over the place.
There are too many people in the back office. New owner-operators get nervous about all the stuff that needs to happen so they’ll bring on secretaries and a big sales team, without considering the fact that they can’t pay that many people yet. Wait for the business to roll in before promising paychecks to too many people.
Slow Down and Plan it
Your trucking company can be successful. All you need to do is sit down with a financial planner and build a plan for your growing company. It may take off a little slower than expected, and there may be a few more things to consider than you thought, especially financially.
However, by taking it slow and adjusting to your new role as an owner operator and by building quality, long lasting relationships, before you know it you could have 10 trucks in your fleet or more!
For more tips on how to make it as an owner operator visit ExpressTruckTax.com and be sure to share your secrets to success in the comment section below.