Startups
First Year in Trucking? These 10 Mistakes Could Shut You Down Fast
The idea of opening a start-up trucking company may seem like the ultimate freedom, with the promise of bigger wages. But the first year? It is a wildcat. Most of the new owner-operators start off in the business with high ambitions and end up closing their business in a few months with a few errors that could have been avoided. Here are 10 of the most typical blunders you should avoid so that you can survive and thrive.
These 10 Mistakes Could Shut Down your logistics / trucking business Fast
1.Wrong-estimation of Start-Up Costs
To many rookie truckers, purchasing a truck is the largest expenditure. Wrong. Insurance, permits, registration, electronic logging devices (ELDs), fuel advances, maintenance and tolls cost plenty quickly. Unless you have prepared beforehand, based on a thoroughly researched budget and at least three to six months of operating capital, you can run out of cash before you have made your first big haul.
Grabbing All the Work You can get
The lack of hope will result in bad values. A lot of novices accept all jobs at any rate or distance. However, not every single load is equally good. Stepping on cheap freight may keep your truck moving but it may not make your business profitable. Study how to compare freight rates, deadhead miles, and fuel costs and then accept no load.
Disregard of Legal and Safety compliance
Not adhering to the regulations issued by the Department of Transportation is a sure way to be closed down. Compliance is paramount, whether it is in the drug testing and hours-of-service regulations, when it comes to inspections or in the maintenance records. A single bad audit or inspection could result in huge fines or worse, loss of operating authority.
Sloppy Bookkeeping
You should be maintaining receipts, fuel cards, toll fees and costs or else you are in trouble. The IRS is not interested whether or not you are too busy driving. Very bad keeping of books means missed decisions when it comes to money and agony on taxes. Use accounting computer programs or employ someone who will be able to manage it.
Lack of knowledge of your cost per-mile.
Unless you know the cost of running your truck per mile, you will never be in a position to know whether you are making a profit or not. This figure consists of fixed expenditures such as insurance and payment on the truck and variable expenditure such as maintenance and fuel. Without that you are simply flying blind.
Failure to do Preventive Maintenance
Postponement of maintenance during a time with the scarce funds may seem like a brilliant idea, but it is a trap. Most of the time, a minor service today is what could wipe out a big breakdown tomorrow. Literally, forgetting to put some oil in
the engine, check the tires, or look at the brakes will put your truck and earnings on the highway.
Depending on a single Broker information / Load Board
One should never keep all the eggs in a single basket. Your whole business is jeopardized because one of your brokers or sources of loads are gone. Also, have variety among the contacts and whenever possible have direct contact with the shippers.
Lack of Time and Route management
Trust and future employment are terminated by late deliveries. When routes are planned poorly or rest times are not allowed or when it is overestimated as to how long it will take to drive somewhere, deadlines will be missed and clients will not be satisfied.
Self Burn Out
Most first year drivers push themselves to the limit trying to show that they can cut it. However, the perpetual stress and tiredness, and overworking result in health issues and errors on the road. Keep in mind, this is a marathon you are going in, do not burn yourself out.
Failing to develop Brands / Networks
It does not matter that you are a one-man outfit however you are a business. Your presence on the internet should not be ignored. Regular business cards, social media accounts, and a professional Web site are contributing to the development of trust. Also, the force of word-of-mouth and referrals are strong in the trucking business.
Final Thoughts
Life in trucking is not easy and you will have to put in all of your inner strength, money, and patience during year one. However, they can be easily avoided by taking into account these 10 rookie errors in order to set a good basis of doing well in the long run. Be smart behind the wheel, plan ahead, and take your trucking company as a serious venture that must be treated as one.
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