Working hard and doing your job the best you can are good practices to follow. However, is that all you need to do to succeed in your trucking business? There are more general business practices that should be followed to achieve success.
- Have a plan. A business plan is a solid foundation for any business owner. You don’t have to spend long hours and a lot of money to develop your plan, but it should contain the basics:
- What is the feasibility of the business idea? What can you reasonably expect in revenue and what is your cost to operate? Then determine what profit margin to expect.
- Know your breakeven point (or breakeven miles). Your business typically has to pay for its own costs and support your personal needs. Your business plan should communicate at what revenue point (daily, weekly, monthly, or at how many miles) you have covered all these costs, known as the breakeven point or breakeven miles. Factor in your personal costs as part of your business plan and re-evaluate costs at least every six months or whenever there is a significant change in your business or personal life. For example, consultants at ATBS work with small business owners on this process regularly and help customize their client’s plans to become their personal “profit plan.”
- Manage time and produce efficiently. Simply generating more business or running more miles and producing more top line revenue does not always translate to more money in your pocket. Managing your time according to business cycles will help you to predict when a slow time is approaching so you be prepared with savings to back up your business. Slow times are also good to know for personal time and vacation. Taking a vacation during a busy season is probably not a smart business decision.
- Keep good records and have an accounting system. Record keeping is not only vital for a less stressful tax time, but provides a good base of information to make informed business management decisions. Basic accounting statements, like a Profit and Loss Statement (P&L), compile revenue records and business expense receipts into an easy to read snapshot of your business operations. This accounting report should not only communicate the gross revenue and net income of the business but also identify strengths and weaknesses of your operation as compared to your business plan. This will allow you to place your efforts where they will have the most impact on the bottom line.
- Respect your customers. As a small business owner, you have complete control over your relationship with the customer. Trust is an essential element for business success. Develop trust early to watch your business flourish. Do a good job for your customers and don’t make excuses.
- Comply with laws and regulations. Even the most well run and profitable business can fail if its run outside of established industry laws and regulations. Many of the laws and regulations, especially in the transportation industry, seem cumbersome and can even be annoying, but they are part of every industry. Ignoring laws and regulations will affect your bottom line and possibly put you out of business quick.
- Work with industry experts. Seek the professional advice of business consultants and counselors within your industry. This is the best way to improve your company’s chances of success.
You may be the best trucker in industry, with many years of experience, but the chances of being successful are improved dramatically when you also utilize good basic business practices.