The trucking industry is one of the biggest industries in the United States. If you’re looking to start a trucking business, do know that competition is tough and you’ll have to work your way to the top. While succeeding in this cutthroat industry isn’t easy, it’s definitely not impossible. Many successful trucking business owners started small and worked their way up. It’s important to have access to resources that can help you succeed like trucking business loans, the right equipment, and mentors to guide you.
Once you have everything in place, it’s time to start your own trucking company! Here are some tips for a more profitable business venture:
Track Your Expenses
It’s important to track business expenses before you even open your doors to the public. You can use bookkeeping software to make expense tracking more efficient. Almost every accounting software allows you to track insurance payments, employee compensation, truck maintenance and repairs, finance payments, and other business expenses. Some applications may even allow you to track tax deductions so you can save more money.
Accessing your expenses in one place lets you know the exact cost of running your business. By knowing the amount it takes to run your business, you’ll be able to keep your company profitable. For example, tracking your expenses enables you to determine the minimum cost per mile so you’ll never undercharge or come up short.
Have Access to Working Capital
Before anything else, you need to know how you can access funds for your business. Even if you’re only opening a small scale trucking company, you still need to shell out a significant amount of money. Not all trucking business owners can purchase vehicles out of pocket. If you don’t want to bootstrap, you can apply for trucking business loans or procure funds elsewhere.
You can try applying for loans from both traditional and alternative lenders. Make sure to prepare all the necessary requirements and paperwork needed to qualify for a loan. If you don’t qualify for a bank loan, there are alternative lending options for you. To help you get started, list the possible uses for the funds and figure out how much you need to borrow. Better yet, you can consult a financial expert to know which type of funding is best for your business.
Proper Cash Flow Management
Proper cash flow management is crucial in any industry, especially for trucking businesses. Trucking business owners often need to wait for 30, 60, or 90 days before they get paid for services rendered. You’ll need to properly manage your cash flow in order to keep your business afloat as you wait for payment.
If you need working capital to bridge cash flow gaps, you may want to apply for trucking business loans. But keep in mind that traditional lenders (banks) are not too keen to lend money to startup companies. For better chances of approval, you can check out alternative financing in the form of invoice factoring.
Invoice factoring allows you to sell your freight invoices in exchange for cash. With freight invoice factoring, you can easily manage cash flow because you don’t have to wait for your customers to pay. Factoring companies will instead advance a percentage of your invoices so you can pay for truck repairs, fuel, insurance, and more.
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Make Use of Flyers to Advertise Your Business
Startup companies often operate on a tight advertising and marketing budget. Fortunately, there are tons of cost-effective ways to advertise your business like distributing flyers. In case you’re not aware, flyers are sheets of paper containing details about your company – products and services, location, contact information, etc. You can stand outside a mall or on a busy street and hand out flyers to people passing by.
When creating your flyers, don’t be afraid to use color! Put in photos of your trucking company, along with the necessary details. In this way, your target market can easily see your company name, logo, and services at a glance.
Create a Customer List
Your customers are the lifeblood of your business; they are the ones that can keep your trucking business profitable. Trucking companies often use a load board where they acquire customers by bidding lower prices for trucking services. Bidding is one of the best ways to build your customer list, which is why it’s best to do it as you get started. However, keep in mind that it can be really competitive.
In order to win, you need to bid lower prices than your competitors, leaving you little room for profit. Bidding is a perfect balance between bidding low enough to win while making sure you can still earn something out of it. Building a list of customers on the get-go, you’re definitely on the right track to a successful and profitable business.
Apply for Trucking Business Loans Today!
The first step in starting a profitable trucking company is making sure that you have the right tools to make your business profitable. By applying for trucking business loans, you’ll have the funds you need to improve your business. SMB Compass offers alternative funding for trucking companies. If you want to know more, feel free to call us at (888) 853-8922 or email us at [email protected].