Thriving in the Trucking Industry: How to Avoid Going Under
Ezra Cabrera | August 13, 2021
Key Takeaways
- To succeed in the transportation industry, identify a niche that you can specialize in, make your business unique, look for trucking jobs, and be aware of the performance of your business when it comes to expenses and income.
- Getting hauling tasks is what’ll sustain your business. You can search for jobs on online load boards or you may network with potential customers through your networking and marketing.
- Every business may encounter unexpected liabilities and financial risks. As a solution, purchase the right kind of insurance for your company that covers the nature of your business.
The trucking industry is growing in popularity each year. With more and more companies involved in manufacturing and transporting raw materials and finished products to the market, the demand for trucking services is constantly growing.
If you’re new to this industry, it’s imperative that you learn how to run a trucking business successfully. Several companies have mushroomed, but within no time they collapsed due to a myriad of reasons – insufficient working capital, lack of industry knowledge, or ineffective marketing.
But with the right information at the onset like getting expert consultation from consulting companies, such as TAFS, you can avoid the common mistakes failed trucking businesses make.
To help you out, below are some important strategies you can use to keep your trucking business rolling:
Make Your Business Unique
Competition is tough and your potential customers have a wide array of trucking service providers to choose from. Many small business owners overlook marketing, thinking they’re unnecessary expenses. However, marketing is essential if you want to stand out from the crowd. Establishing a competitive advantage is vital if you want to survive in a cutthroat industry.
One strategy is to balance between your prices and offering quality services. Charging way too low may not be sustainable in the long run. On the other hand, very high prices may turn potential customers away from your business.
Here are some of the ways you can make your business unique:
- Be creative in the way you interact with your customers. Personalize your interactions.
- Highlight the benefits of your trucking company and
- Craft a powerful mission statement that differs from others.
- Be customer-centered.
Be Niche Specific
To succeed in a trucking business, identify the right niche for you in the market. As much as possible, don’t select a market niche that’s highly competitive. The kind of market that you choose determines the type of vehicles you’ll need to purchase or even the equipment, prices to charge, and freight lanes to service.
The fleets you’ll need may fall into the following categories and types of loads: agricultural commodities, general freight, refrigerated solids, household goods, bulk, tank trucks, petroleum products, heavy hauling, motorized vehicles, and building materials. Most trucking services carry machinery, electronics, and motorized vehicles. Moreover, there are mixed freight services, including food and restaurant supplies.
Some niches are less competitive while still busy throughout the year. They’re also less affected by recessions and are more flexible. These include trucking commodities, such as fresh produce and meat in reefers, or delivering special commodities.
Register Your Business And Get The Necessary Permits
You may not be able to win the trust of customers if you aren’t permitted in doing a trucking business. This is why you need to register your trucking business and get the relevant permits and licenses in your state. The required licenses depend on the kind of trucking services you offer. Requirements vary by state, so be sure to do your research. But here are some of the paperwork you might need to get:
- Commercial trucking insurance.
- Commercial driver’s license (CDL) and relevant endorsements. You may need to contact the licensing agency of your state for more details.
- International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP).
Running your business as a Limited Liability Company (LLC) puts a separation between your business liabilities and personal assets. Additionally, you’ll be able to enjoy some tax, legal, and business advantages. After choosing to run an LLC, you have to appoint a registered agent and get an employer identification number.
Insure Your Trucking Business
Every business may encounter unexpected liabilities and financial risks. As a solution, purchase the right kind of insurance for your company that covers the nature of your business.
Insurance needs and requirements differ from one business to another. Seek guidance from your agent to help you identify potential gaps and needs that may expose your business. Relevant policies may include:
- Cargo Insurance policy
- Workers’ compensation policy
- Commercial general liability
- Bobtail insurance
- Non-trucking liability
- Primary liability
Outsource Or Delegate Office Tasks
The right kind of manpower is always the first thing to get after starting a business enterprise. In case you’re unable to do some tasks by yourself, it’s wise to outsource certain tasks. Besides, some aspects of your business might be beyond your academic training, thus getting the service of another person is the only option you have.
In case your budget is strained, you may get the services when they’re needed rather than having a full-time staff. You may also sign up for online services. Remote work has proved to be cheaper to many businesses as there are fewer things to think about.
Here are some online services for truck businesses:
- Trucking Office: Provides your business with tracking software to automatically handle fees, invoices, logistics, expenses, driving logs, and other relevant statistical data.
- Trucking Back Office: You’ll benefit through web services, server maintenance, marketing materials, data entry, hosting, BPO, among others.
Actively Search For Orders And Loads
If you’re new in the trucking industry, you may network with potential customers through your networking and marketing efforts. Make appointments with your local shippers and target customers where they run their businesses. Once you gain customers, establish great relationships with them and offer them a good customer experience.
Track Your Expenses And Income
A key factor for the success of your business is to accurately track your income and expenses. Your system ought to be efficient to handle your logistics as payments may be trickling in daily, which may be hard to keep track of if you lack bookkeeping software, don’t know how payments should be made, and don’t know how to separate your expenses from business finances.
Conclusion
Your trucking business will be a success if you can withstand the competition in the trucking industry. Ensure that you get good information about trucking, especially if you’re a new investor.
Identify a niche that you can specialize in, make your business unique, look for trucking jobs, and be aware of the performance of your business when it comes to expenses and income.
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