A Guide into The Truck Business
Great truckers may not necessarily be good business owners and, therefore, it takes more than knowing how to drive and choose routes. Here are some valuable tips to put you into the right direction if you plan to put up a trucking business. Check out http://jhtruckinginc.com/ to get started.
By investing on the right trucking equipment, even if this is an expensive investment, is putting you into the right direction in starting this kind of business. Then, you have to further decide on how to secure the equipment, buy or lease it. Buying the equipment may be a straightforward thing since it will just take an amount for down payment and apply for a loan to pay the rest. The only other option, if your funds may not be sufficient for the down payment, is to lease the equipment. Leasing terms depend on the company, such that the company may offer in structuring the rentals according to your financial capacity or structuring it in such a way that after your last payment, you'll be owning the equipment. So, whether your decision is to buy or lease, it will depend on your financial situation; therefore, consult the services of an accountant who can put you through the whole, financial perspective of choosing the best option for you.
Once you have ironed out your dilemma on getting the right equipment, the next big step is how to get the right customers. By checking online on the load board, which is an online matching system which allows shippers and freight brokers to post loads, as well as also allowing truck operators to post their equipment, you are able to get your first customers. Using the load boards to get customers is a short-term strategy, the best plan to really get good customers and on a long-term basis is to do the hard work of making sales calls to shippers, freight brokers, manufacturing companies and build your customer list. Visit http://jhtruckinginc.com/ for more information.
For you to win more customers, it will depend on how you bid well, establishing a low price to be competitive but, at the same time, earning a profit. So you can determine what would be the right price to bid, know your expenses - maintenance, truck repairs, truck and trailer payments, fuel and labor cost, and by doing so you can compute what would be your profit margin, enough to give a low bid.
Operate your trucking business with a well-thought-out back office, especially if you're running a fleet of trucks. Establishing a back office must be run on efficiency to keep your business going and to do that is to train personnel to do functions on settlements, clearances, record maintenance, regulatory compliance, accounting and IT services.
There are times that shippers pay you on net-40 or net-60 day terms, which means that you will have to wait for two months to be paid on a load that you have already delivered and this will result into a low cash flow situation in your business. When you happen to fall into this situation, you can still avoid cash flow problems by using freight factoring, which is a financing company that provides funds to pay for freight bills, drivers' salary, fuel and repairs, and with this assistance, you are able to cover your expenses and take on new loads.