Growing a trucking business has its fair share of challenges. Business owners that make the right decisions at the right time have the greatest chance of success. It doesn’t matter how long you’ve been driving in the trucking industry; if you don’t know how to operate a company, you will not succeed. So, what can you do to grow your trucking business?
Get your finances in order
A huge part of success is having your business finances situated. When first starting your trucking company, you should have predicted your finances in your business plan. If you don’t have a business plan, make one. Your financial plan should outline how much you plan to spend and how you plan to turn a profit. You need to track all your spending, current balances, and income. Plus, your financial goals and expenses. Once you know this, you can make a plan to succeed.
Know your rate per mile and cost per mile
Your rate per mile determines how much you can charge for your services to make a profit. It’s based on your equipment, the market you haul in, the lanes you run, and other related variables. You can find an estimated rate per mile from averaging ten rates for the types of loads you typically haul.
Your trucking cost per mile determines if you charge enough for hauling the load. It’s important to have an accurate number for this, so you don’t end up losing money. Many truck drivers go out of business because they don’t take the time to calculate their cost per mile. You find your cost per mile by determining how many miles you drive and calculating your fixed and variable costs. You can then decide how much it costs you to haul a mile.
Control your fuel costs
Fuel is a significant expense for motor carriers but can get out of hand if not controlled. Determining the cost of fuel and creating a plan is important to decrease your costs while increasing your profits. Calculating fuel costs can be tricky as it depends on where you purchase the fuel and how many miles you drive. drivers also have to include fuel taxes in their calculations.
Fortunately, there are options for fleet owners to save money on fuel expenses with fuel cards. Porter Freight offers a fuel card that can save truck drivers thousands of dollars a year with discounts and advances. It has discounts at over 14,000 locations nationwide.
Find profitable loads
There are a few different ways to find freight loads. Drivers can use load boards, freight brokers or shippers, or work directly with dispatchers. Load boards are highly competitive and aren’t worthwhile to use in the long run. They can be time-consuming, and it’s hard to ensure your load will be profitable.
Owner-operators have better success in finding profitable loads using direct shippers. Building relationships with direct shippers can be beneficial in finding the highest paying loads. Finding shipper contacts can be challenging but worth it in the end. The relationship shows you are trustworthy and the shipper will keep going directly to you for work. Dispatchers are also beneficial to work with. You pay them a small fee, and you find the loads for you. If you don’t have a lot of spare time, this can be very useful.
Manage your cash flow
Cash flow issues are common for truck drivers and are a big reason why trucking companies go out of business. Typically, brokers pay truck drivers in 30, 60, or 90 days after a load is hauled. However, a trucker’s expenses don’t stop during that gap in payments.
The best way to solve this issue is by freight factoring your bills. Factoring provides trucking companies an advance on their slow-paying invoices. Instead of waiting up to 90 days to receive payment, a freight factor will advance the invoice amount (minus a small fee) in as little as 24-hours. The advance gives you access to your working capital so that you can continue to pay your ongoing expenses.
Think invoice factoring can help grow your business? Call Porter Freight Funding 205.498.9804 today!
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Hi! I've been working in this industry for over 32 years. I've learned a lot and want to share it with you to help you keep this process simple!