4 Important Tips to Follow When Starting a Successful Trucking Business
The trucking industry is lucrative, but it’s also highly competitive. Many entrepreneurs try to start a trucking business but end up failing within the first few years. Running this type of business is more than just driving a truck; you need to have skills as a businessperson, as well. While you can apply for a trucking loan to help with expenses, you need to consider other aspects of running a business, as well.
As mentioned, trucking is a highly competitive industry. If you miss out on an opportunity, you’ll easily be thrown at the bottom. Gaining a competitive advantage isn’t easy. But with perseverance and a little bit of technique, you can easily make your way to the top. After all, isn’t success your primary goal in establishing your trucking business?
With that said, here are some tips on how you can successfully start your trucking business:
1. Create a Marketing Plan
Your marketing plans will map out the steps you need to take to make your business known to your audience. Without a strong marketing plan, your customers won’t be able to find your business among the vast pool of competitors. If you want to attract more customers to your business, you’ll need to develop a strategic marketing plan.
There are different ways you can reach your target market without having to spend much. An effective marketing strategy doesn’t have to be expensive. Here are a few tips to help you get started:
- Make use of social media to reach out and communicate with your clients and prospects.
- Create an email list of your target customers and implement an ongoing email campaign.
- Create a fully functional, mobile-friendly website.
Once you establish all that, be sure to check up on it now and then. Leaving your systems down even for just a day can let you miss out on hundreds of possible opportunities.
Related: 5 Reasons Your Small Business Needs a Business Plan
2. Choose the Right Market Niche
Choosing the right niche is one of the most important factors in running your trucking business. The market you choose affects the rates you charge, the freight lanes you service, along with the type of truck and equipment you will need to buy.
As a business owner, you will want to focus on minimizing the competition when starting your business. This means you need to choose markets that larger companies usually avoid, such as hauling specialized goods.
You can also focus on other types of niches, such as building supplies haulage, dump trucks, towing service, and more. However, hauling meat and fresh produce are some of the most profitable niches in the trucking industry. It has lesser competition, it’s resistant to recessions, and you have business year-round.
3. Establish Your Customer Base
Once you’ve established who your target audience will be, it’s time to make calls. While you can easily join bidding events, the prices could get extremely competitive, and the lower the price you offer, the fewer profits you earn. Aside from that, bidding events doesn’t exactly let you earn long-term and loyal customers.
Creating a list of customers, on the other hand, and personally reaching out to them can do wonders. Be sure to offer flexible and favorable terms to your potential clients. Once you get them to sign up, and they find your services highly-satisfactory, you can trust that they’ll recommend your company to others. From there, you can then create a customer-base and earn more profits for your trucking business.
4. Steer Clear of Cash Flow Problems
Trucking businesses are capital-intensive. Business owners need to buy fuel, pay for insurance, truck repairs, on-going maintenance, and of course, payroll. Delayed payments from clients also can be a problem. Shippers and brokers usually pay their invoices after 15, 30, and even 45 days. This huge gap in payments is a major cause of cash flow shortages among trucking business owners and can be very detrimental to a new business owner.
Related: 6 Crucial Factors that Affect Your Cash Flow
There are many loan options for a small business, but freight factoring for trucking companies is one of the most common solutions. Freight factoring remedies your cash flow problems by advancing up to 90% of the value of your invoices, usually within 24 hours of submission. Once your clients fully repay the remaining 10% balance, factoring companies will send you the money minus a small fee.
Apply for a Trucking Loan Now
If you’re looking to start a trucking business, it’s important to have a stable cash flow. Knowing what your financing options are is one of the first things you should do when planning to open a trucking business. A trucking loan, specifically, will help you bridge cash flow gaps and pay for unexpected business expenses. Other than that, it can help you find marketing strategies that you otherwise won’t be able to afford without additional funding.