Few industries have a greater potential for growth and success than shipping. For owner-operators, the market dynamics at play inevitably mean that the future will be bright, even as slight hiccups come to light. While countless services, ranging from freight factoring to digital management processes can help, the true measure of success rests with keeping up a strong pace and expanding the company. Yet, finding the best path for figuring out how to set up a trucking business can be confusing. There’s a ton of information claiming that it’s easy and drivers can make hundreds of thousands in mere months, but reality rarely is that simple. That’s especially true in markets like those of 2021, where demand is at all-time highs but owner-operators are still responsible for their own maintenance, fuel and other overhead expenses.
As further explained by Transport Topics, “Freight demand, meanwhile, has been regaining momentum since mid-2020, with constrained truck capacity supporting rate increases for motor carriers. Nonetheless, trucking companies continue to face some persistent headwinds. At the top of that list is the industry’s long-standing struggle to recruit enough professional truck drivers, a challenge that is perhaps more difficult now than ever before.”
But rather than tuck tail and go home, more owner-operators are thinking about how they can make the current trucking environment lucrative and a prosperous career. In other words, they’re thinking about how they can turn a single driver and truck into a large-scale trucking company.
For those looking for answers on how to start a trucking business with one truck, the path is laden with risk. And to help your company achieve that goal without losing sight of your true profitability, it’s important to follow these nine steps that add up to a more strategic way of managing your company and ensuring timely payment. Let’s get started.
1. Know Your Direct and Indirect Costs
The first step toward starting a trucking company with one truck is to know what you need to spend. This means knowing your direct and indirect costs. For example, fuel expenses and meals are direct costs associated with driving your truck, but indirect costs are often difficult to pinpoint. For instance, how much time would it take you to bill for those moves. Even if you use software to handle the billing process, what’s your time worth and how much would you be making in actual drive time? Those variables of what your time is worth are where things begin to get muddy with indirect costs.
2. Find the Best Loads
The next best step on the path for those wondering how to grow a small trucking company is finding high-quality loads. These loads are the easiest to pick up, deliver and move. They typically don’t have extensive equipment or handling requirements. However, those with added equipment and handling requirements can easily become your best loads if the rates are appropriate. Regardless, the trick is to know your total indirect and direct costs for each move and how profitable it can be.
3. Be Mindful of Market Dynamics When Viewing Available Loads
Each market is subject to different nuances and fluctuations in rates. To ensure the growth of your trucking company, especially when you only operate a single truck, it’s important to consider these dynamics when viewing any available load. After all, failure to consider the full view and impact of the market may increase your risk of an empty backhaul and lead to lost opportunities in other markets.
4. Leverage a Digital Invoicing Resource
For those looking for the best ways on how to set up a trucking business, digital invoicing is the way to go. A digital invoicing system or service transforms a slow, back-office process into a seamless turnkey operation. Furthermore, digital invoicing helps to eliminate the risk of errors that are common when manually creating and sending invoices. Digital invoicing also paves the way to improved communications and helps your shippers by giving them a resource to connect your movements to their auditing software. This goes a long way toward increasing the legitimacy of your business and improves relationships with your shippers. In other words, a digital invoicing process is more likely to hold credence in the eyes of shippers than a traditional, manual invoicing strategy that is slow.
5. Automate Invoicing Follow-Ups
While digital invoicing can help those looking for insight on how to start a trucking business with one truck, automating the invoicing follow-up and notifications process is a great way to ensure your shippers stay apprised of your expectations for payment. Of course, this can be automated and integrated with your freight finance platforms, including factoring services, that can send such updates to your shipper clients and eliminate the hassle of managing those payments too.
6. Be Flexible in Your Schedule
Many truckers might make the mistake of setting a delivery and pickup schedule that is too finite. Flexibility in scheduling is critical to gaining the favor of your shippers, and that favor holds value as a way to network and expand your customer base. For instance, if you maintain a flexible schedule, your shippers may be more likely to share your information with their other partners, potentially increasing your client base. Flexibility also opens the doors to other advantages and ways to maintain profitability, such as charging extra for night or weekend pick-ups and deliveries. Regardless, be flexible in your schedule and extremely transparent in your fees and costs structure.
7. Be Transparent Regarding Shipment Status
The next best way to grow your trucking business from one truck to a fleet is through transparency, and transparency regarding current shipment status is critical to that growth. Shippers will want to know where their freight is at all times, and obviously, you cannot respond to texts and email requests while driving. Thus, setting up an automated shipment tracker that uses your real-time GPS location will help ease these issues. Those features might exist within your ELD as well, and given that particular factor is a step on the path toward launching any trucking business, it’s important to realize every company must have GPS-enabled access to real-time location. Such factors can also reduce confusion and keep shippers apprised of potential delays due to weather, poor road conditions, and excess traffic congestion too. As a result, they’re less likely to be calling and asking, “where’s my freight?”
8. Use Analytics to Track Your Performance and Your Preferred Shipper Base
All truckers have heard the term “preferred shipper”, but it often goes by another name: “shipper-of-choice status.” It’s usually reserved for the larger companies and those that can afford to provide bulk discounts to their clients. However, your beginning with a single truck doesn’t mean that it’s too early to start thinking about when and how to offer this designation. In fact, tracking how easy and accommodating shippers are will inevitably lead to more profitable and less-stressful pick-ups and deliveries. After all, when you know which shippers you prefer to work with, it’s easier to accept or reject bids when your services are requested. Furthermore, using analytics tracks not only the performance of your shippers, but it can be useful to track your performance and costs of transportation too. Thus, you’re more informed and able to adjust rates to ensure profitability.
9. Choose a Top-Quality Factoring Solution
The final step on the ladder is one that’s easy to overlook as well—freight factoring and freight finance. Even if you have a strong reputation for 100% on-time and in-full deliveries, you may still fall at the mercy of a shipper’s accounts payable processes. In other words, you’re subject to the delays and lengthy payment timelines that many shippers follow. However, your company can get cash same-day or next-day in many cases by leveraging a digital freight factoring service, like that of BasicBlock, to get funds faster and improve your working capital.
With that in mind, it’s important to consider your total costs of factoring too. The best solutions should be transparent in their fee structure, offer a faster payment window, and make the whole process easy and seamless. Furthermore, look for solutions with a long list of approved brokerages. Factoring solutions with a pre-vetted and pre-onboarded list of brokers mean you can get paid sooner and avoid the hassle of waiting for your shippers or brokers to complete onboarding with such services. Other key criteria to review when selecting a factoring service include ease of use, app-based invoice uploading, nationwide services, and intuitive dashboards to track your submitted invoices, those approved, and expected deposits.
Know How to Grow a Small Trucking Company by Leveraging BasicBlock Now
There’s no time like the present for launching your business, and while you already have a truck ready to roll, it’s important to not lose sight of your company goals. While rates are breaking records, it’s tempting to accept the first move you see. However, taking a bit of extra care and following the above steps will help your business get on the right path to success. Also, avoid skipping the steps as they build on one another to help your brand achieve long-term success, and remember to sign up for BasicBlock today.