The trucking industry was worth more than $700 billion in 2017, and the sector has grown since then. However, this market is highly competitive. Small trucking businesses are competing with larger fleets, and they’re starting to compete with drivers for hire for everything from the meal delivery to freight runs. Fortunately, there are steps you can take to improve your profit margin and even expand. Here are 4 ways truckers can grow their business.
Plan for Regulations Instead of Reacting
The Electronic Logging Device or ELD regulation took several years to go into effect. Individual truckers and small fleets were generally the last to implement the technology. They were often reluctant to pay for the equipment, though they knew it was required. This forced some to install the technology at the last minute without adequate training or thorough research, which caused unnecessary headaches. The solution is to plan for regulations and the implementation of changes required to remain in compliance.
Invest in the Right Equipment
ELD devices are one example of technology implemented for the sake of government regulations that had follow-on benefits for trucking firms. It simplified record-keeping for drivers, and it allowed firms to more accurately track miles driven and fuel taxes paid.
Depending on the system purchased, it might give drivers more accurate location information than they previously had. Your customers will appreciate it when your drivers don’t get lost or get accurate information on alternate routes around that traffic jam.
This is why you should try to keep up with technology and invest in the right equipment. This might be GPS trackers for rigs, infotainment centers to keep drivers informed and entertained safely, fleet management software or more fuel-efficient vehicles.
While these tools offer a high return on the investment, many trucking companies are reluctant to buy them, or they think they can’t afford it. Fortunately, services like Advance Point Capital have been receiving excellent reviews on trucking loans. Services like these will allow you to secure funding for new equipment or additional vehicles among other things.
Get Control of Your Finances
Too many small business owners spend money as necessary instead of planning their expenditures. This costs them in a variety of ways. They don’t take advantage of apps to find the lowest fuel prices before they fill up. Maintenance and repairs occur as required, and owners lose the opportunity to negotiate better rates via service agreements. They might not track their spending and end up wasting money on things they don’t really use, which cuts into your profit margin.
Failing to track account balances can result in bounced check fees and overdraft penalties. If you don’t track your income and expenses, you may not realize that you need to budget more for certain categories or take action to reduce those expenses. The lack of a financial plan will also prevent you from meeting financial goals like saving up for equipment and software purchases instead of financing it. Plan your growth, and be strategic with every acquisition.
Focus on Service, Not Lowest Price
Small trucking firms can’t leverage the economies of scale that the larger firms have, nor can they afford to cut their margins to nothing to try to win business. The solution is to focus on service; you’re more flexible than the big firms. Treat every client like they’re important, and do the same for their cargo. Deliver items on time or early and in perfect condition. Consider giving them a little extra, whether it is more information on the status of their order or free priority shipping. You could work with freight boards to find loads that need to be moved and use this opportunity to build relationships with shippers who clearly aren’t getting the service they need.
Trucking business owners need to work smarter, not harder, to grow their business while protecting their profit margins. It is possible to grow and thrive as an independent operator or small business in today’s market.