Trucking can be a very profitable industry. Shipping goods across the country has always been important to the economy. Today, with the boom in online shopping, shipping has become even more viable. However, without proper planning, that success can turn to disaster. Here is what you need to do to successfully operate a trucking company.
Identify Your Niche Market
You should always start your trucking company by identifying your market. There are vast needs in the trucking industry. Some trucking is for long distances. Other companies focus on larger loads. Some companies ship specific items with unique handling needs. Each of these areas relies on different tools. Therefore, identify your niche early by conducting research into your demographics and target audience. This allows you to invest in the right trucks and equipment. This is often the first decision that you need to make, and it will affect all other parts of your set up, training and overall operation, as well as your online marketing and SEO campaign.
Set Your Price Per Mile Appropriately
One of the most important decisions you will make for your company is your price per mile rate. This is the rate you will charge clients to ship their goods. The reason this rate is so important is that it defines your place in the market while setting your earning expectations. Therefore, the rate must be perfectly balanced. You need to set your price high enough that you will earn enough money to turn a profit. However, you cannot set the price too high without alienating potential clients. You must determine your rate before you can start contracting with clients.
Map Out Your Operating Costs In Advance
A trucking company will have certain operating costs. You need to know and understand these costs from the start. If you do not accurately assess these costs, they will catch you off guard and eat into your bottom line. To determine your costs, think first about your fixed expenses. This includes truck payments, insurance and permits. There are also variable costs. This includes things like fuel. When you add up these costs, you can determine you’re all in cost per mile. From here, you can determine whether or not you are going to make a profit each month.
Build Relationships With Shippers
In trucking, most people are worried about satisfying customers. While you definitely need satisfied customers, you should actually start by developing your relationship with shippers. In other words, you want to have good relationships with the companies that need their goods shipped. While there are some brokers that can facilitate this process, they can take a substantial cut of the profits. You can earn more by having direct shippers instead. You should be able to work out a relationship with shippers that is beneficial to you and them.
Manage A Smart Back Office
While a lot of your focus will be on your trucks, drivers and shippers, do not neglect your back office. Your back office will manage all operations and make sure that everything is running smoothly. If there is a problem on the road, the call will go into your back office. If a client or a customer has an issue, it has to be dealt with in your back office. The back office deals with dispatches, accounting, communication and more. In this way, the back office sets the tone for most company operations.