Great football coaches know that when their team is behind and the opposing team has first and goal on the 10-yard line, they need to turn the game around—and to do that, they must return to the basics.
It’s the same for owners of trucking businesses. Remember the days when you first started your business? Well, you need to return to the basics of how to succeed in business.
Make sure you have a business plan in place; it’s essential to the success of your company. Review how your business has performed. What has worked? What has not worked? What has caused problems? Put together a strategic game plan for your company for both the short and long term.
Following is a step-by-step guide to help you get started:
- What will you need in equipment to achieve your goals?
- How many people will it take to get the job done to reach your objectives?
- How much cash flow and cash reserves will you need to acquire to run the equipment and pay the personnel on your team for the next six months? One year? Two years? How many dollars will you need to set aside in savings for your company to be capitalized (grow) in the next three to five years?
- Who are your customers? How stable are their businesses? What is their growth potential, or do they anticipate downsizing? How does this affect your goals? Where can you find new customers?
- What should your hauling rates be in order to generate the cash flow needed to pay all expenses and meet growth targets?
- What needs to be adjusted, cut, increased, or changed to make this plan work?
- Go back and review the plan once completed to make sure you didn’t miss anything. Revisit and update the plan—adjust, cut, increase, or change—as warranted.
Of course, you must take the plan from the locker room to the playing field. A plan is just a plan until it is put into action, then it becomes a result.
Your playbook has now been laid out, and this becomes your road atlas. Use it to navigate through the financial and business minefield you will face.
As you start implementing your plan, here are 10 points to keep in mind:
- Keep a close eye on what’s happening within your hauling niche. Talk with your customers. Find out what they are projecting in the near future, not just for their company but also for their industry.
- Study the industries to which your customers sell or from which they buy. The more you know about what’s happening in their specific industry, the better prepared you will be for any changes.
- Track the shipments traveling in your hauling lanes that are similar to those hauled by your trucks. Know your lanes and the freight hauled in them better than the back of your hand.
- Follow the trends in the oil and fuel markets. This allows you to anticipate fluctuations in your fuel cost and adjust your hauling rates accordingly. Be ahead of the curve.
- Keep a close eye on costs. Reducing or eliminating them is your objective. Make sure that reduction or elimination of an expense doesn’t diminish your ability to provide top-of-the-line service.
- Think customer service. The best way to increase your rates without losing a customer is to first establish the highest level of customer service possible.
- Set the bar when it comes to building customer loyalty and customer service. Customers don’t just do business with a company. They deal with the people representing the company. Make it difficult for the competition to match your customer service.
- Cut expenses before increasing hauling rates. Be able to prove to your customers that you did everything possible to avoid increasing your rates.
- Don’t wait until your costs have significantly increased before raising your hauling rates. Help your customers by making small, incremental increases. If your costs have increased by 5%, then it’s time to consider increasing rates. Avoid ‘sticker shock’ for your customers; they’ll appreciate it.
- Keep everyone in your operation in the loop—drivers, dispatch, sales. Communication is the key to implementing and maintaining a plan. Also include your customers’ key people—the folks on the dock, in shipping and receiving, and the front office. Maintain a list of emergency contact numbers and email addresses with alternate contacts. Use them when needed.
With the economic outlook for the next year or two a real guessing game, running a trucking company is going to be challenging. It’s going to require a dedication to detail.
The good news? America runs on trucks, and small motor carriers (those with fewer than 35 power units) haul a vast majority of the freight. Over 80% of American manufacturers are small businesses with fewer than 25 employees, and these small-business owners are going to be facing the same dilemmas and problems as the small trucking company owner.
The small-business owners are going to need a hauler who understands what they’re dealing with, and who better than the owner of another small business? That’s you.
If you navigate this financial and business game by picking your way carefully with a defined plan, you’ll reach the top of your game. And when the score starts adding up in your favor, you’ll realize success.
That’s the plan.