Once you start a trucking business, your profits and operational costs would only come from the time as well as how many miles spent on the road. Due to the number of expenses associated with managing a trucking company and the future benefits are uncertain, it makes you wonder if trucking is lucrative.
However, it could be. It depends on how you run your business.
Owning and managing a successful trucking business is challenging. According to the National Association of Small Trucking Companies, the industry is so tight that only 15% of startup trucking companies make it through the second year of business. However, the good news is that the rate of small business failures has been gradual decreasing within the last three decades. This could as a result of the availability of several tools out there which can assist you in running a successful trucking business and make profits.
Nonetheless, the below are essential tips you need to follow if you want your trucking business to be lucrative.
Know your biggest expenses
For the first time since studies show that the top operation cost of a trucking business is truck driver wages and not fuel. This is true because the salaries of the truck drives have continuously increased over time. Paying high fees to truck driver is not unreasonable since it reinforces on a vital tip to assist you in getting more loads, provide better service to your clients as well retain your best drivers. Hence, you need to manage these expenses effectively.
Tools for Fuel Costs
Fuel expenses are responsible for about 25 percent of all your operational costs. Aside from the lower costs of fuel per gallon today, one factor that reduced fuel expenses is fuel cards. Fuel cards offer a significant discount on fuel for trucking businesses. Hence, it’s best to take advantage of this tool.
Know how to manage your Cashflow
As the workforce of your business becomes more knowledgeable on how to make money in the trucking industry, several resources are out there to assist you with the cash flow of your organization. Cash flow can grow or destroy a business.
Hence, factoring your freight bills is one convenient way to manage the expected and miscellaneous expenses associated with operating a trucking company. Also, you can take on extra loads and look for more clients once you get paid for a load that was hauled on the same day.