The Trucking Business is a tough one, but, also can be quite profitable if you know what to do. However, if you’re someone who is just stepping into the business, here are a few basic tips to help you get started on the path to success.
This is the first step towards making a profit in the trucking sector. Your business will not last long if you’re going to rely on shoddy equipment. So, make sure you invest in what works the best for your particular profile and is reliable so you can offer your customers good service.
Once you do that, the next step is to choose between leasing and purchasing the equipment.
There are pros and cons to both options. For instance, purchasing the equipment makes you the owner. You have full control, but, you will require a serious amount of capital. Leasing is more cost-effective, but, you don’t own the equipment which can bring in some restrictions.
Get long-term customers
Be careful getting customers from a load board because you may be forced to charge extremely low fees. Plus, the clients from a load board are never long-term. Though a load board is an okay way to start, focus on marketing your services directly in order to create a long-term customer list.
Profits are hard to come by in the first few years, but, as long as you stay in business through providing good reliable service, it will eventually happen. However, to stay in business, you need to have a consistent flow of cash in order to meet basic expenses. Now, the source of your cash flow is primarily the payments you receive from customers which are not always very prompt.
Sadly, customers have their own processes, and payments are rarely made on time. This is where you need to seek out effective solutions such as factoring. Factoring or Invoice Factoring helps you collect cash usually within 24 hrs to keep things running. It is basically a system where an invoice or freight note factoring provider buys your invoice for 80% (or sometimes even more) of its total value and brings in the rest after collecting it from your customer. You just have to pay a small percentage of the invoice value as fees for the service.
So look for good reliable invoice factoring loans or debtor finance providers that understand freight and transport. It might be different between success and failure in your new venture.