Let’s get one thing out in the open first, owning your own trucking business is much more lucrative and independent than working and driving for someone else and living off on an average salary. So, if you are planning to own a trucking business and live your entrepreneurial life or you already own one and are looking for tips to make it a success, this article is just the right thing for you.
You might already be familiar with the fact that to run any business; an entrepreneur should have adequate knowledge of the industry, the necessary skills, and the courage to take risks. And owning a trucking business is definitely going to reap some huge befitting dividends and profits. This is because, according to the report by American Trucking Association, the trucking business is about to witness huge profits and major revenues due to elevated demand for the drivers or owners.
Anyway, getting back to the topic. Here are some tips that can help you take your trucking business to greater heights and rule the industry like a pro.
Let’s take a quick look!
Determine your Operating Cost
First things first, it is of utmost importance for an entrepreneur to know the total cost of the business he/she has to bear. It will help you keep a detailed record of all the financial transactions and analyze the fact whether your business is making profit or suffering losses.
As an entrepreneur, you should be familiar with the fixed costs of the business. If you have no idea about what these costs are, let us clear that up for you. These types of costs are the ones that stay the same regardless of the number of miles you drive. For example, payments related to permits, insurance, and many others.
After you are done defining the fixed cost of the business, move yourself to the variable ones. Variable cost is the one that depends on the number of miles you cover and drive with. For example, fuel. Obviously, the more miles you cover, the more fuel you use. It’s simple math.
Now, you just need to layout both fixed and variable costs and define your “total cost per mile.” After this, you need to subtract the total cost with the rates, and Voila! Here’s the profit you just earned.
Get Insurance ASAP
What if one of your trucks meets with an accident? How exactly are you planning to meet the immediate financial setback? Let’s find out!
You just bought health insurance to safeguard yourself from the financial setbacks of the medical bills. Similarly, trucking insurance can help you safeguard your business from potential threats. In simple words, getting an insurance policy is an excellent way to protect your business from the dangers lurking out there.
According to industry experts, obtaining the right insurance for such a business can be daunting. Thankfully, there are trained and qualified experts out there who can help you with the needs of your firm, including long haul trucking insurance, Cargo Insurance, Heavy Equipment Hauler Insurance, Dump Truck Insurance, Tow Truck Insurance, and many more.
There are numerous ways by which insurance can help your trucking business. For example, Trailer Interchange Insurance can be used if your trailer or truck gets damaged by collision, fire, or any other reason and gets pulled under trailer interchange agreement.
Isn’t it convenient? Now, you can focus on the operations of the business without getting roped in the stress of facing financial setbacks because the trucking insurance will always have your back.
Draft a Concrete Fuel-Buying-Strategy
Now that you own a trucking business, it is an obvious fact that getting fuel will be your largest expense and investment. And you’ll be surprised to know that even experienced truck owners or operators end up buying the fuel incorrectly by falling into the trap of the pumps that sell cheap fuel. But that’s totally wrong. You should know that by saving a few dollars on cheap fuel, you are actually compromising with your hundreds of dollars worth of profit.
It is a known fact that regular drivers have to pay fuel taxes in the state from where they purchased the fuel, while truck drivers, on the other hand, have to pay the taxes on the fuel as they drive through the states and not from where they purchased the fuel initially.
So, in order to cope with such tax issues, the truck drivers/owners need to go for the fuel with the lowest base price regardless of the price of the pump. For this, you need to subtract tax from the fuel price, and you’ll get the base price of the fuel. Wasn’t that super easy?
Invest in the Right Equipment
It is needless to say that proper equipment acts as a helping hand and can make all the difference, especially when it comes to the business world. And when it comes to the trucking business, the perfect equipment is the only thing that can help you grow and sustain in the industry.
For example, suppose your client wants to deliver perishable items, then you need a refrigerated compartment to keep everything safe and secured. This means that the vehicle that you are using to transport the order is assigned to your firm.
Also, you must be able to distinguish between whether leasing or buying the equipment will be the best choice for your business.
So, if you are new in the trucking business, you can always consider seeking advice from professional truck drivers that are living their entrepreneurial dream and compare the options and choices before making a purchase decision.
Undoubtedly, succeeding in any business is definitely a challenge for entrepreneurs, but the trends in the trucking business are expected to indicate a huge potential for newbies.
Therefore, getting into a trucking business and making it run smoothly isn’t all lilies and roses. You need to have patience, determination, and vision for better productivity, and the tips mentioned above will eventually come around to make your business a hit in the industry.