If you’ve had experience as a company driver, then you understand how a trucking company works. Over time, you figure out what to do and what not to do run a successful business. At some point, then, it’s inevitable to wonder if it’s possible to become a trucking owner/operator.
After writing a business plan, getting a loan to buy or lease your own truck, and setting up a legal company, three of the most important things you should do is to get your trucking authority, find a good freight factoring company, and promote your trucking business.
Trucking Authority to Carry Loads
One of the most important things you will need to do is to get a trucking authority. You can get one either as a common carrier or as a contract carrier. As a common carrier, you’ll be able to get hired by a broker or a shipper, and as a contract carrier, you’ll be able to haul loads for a particular company, taking care of loads that aren’t available to other truckers.
Freight Invoice Factoring to Avoid Negative Cash Flow Problems
Getting a reliable freight invoice factoring provider will help you solve one of the biggest problems in trucking—negative cash flow.
Since you won’t get paid for a trucking job for 30 to 60 days because customers will expect credit, you will basically have to pay to do the job out of your own pocket. Since you have to pay before you receive money, this can cause all sorts of problems–from fueling up your truck to paying employee wages.
The way to get around this is to find a lender who will buy the invoices from you and then collect the money from the customer when the invoices are due.
Even if you manage to borrow plenty of money to start your business, it’s a good idea to use a factoring service. There is no point in dipping into your capital faster than you need. Use the money you have in reserve to handle emergencies or for future growth plans.
Promote Your Trucking Business to Get More Clients
Two big mistakes new business owners make is failing to actively promote their business. Instead, they end up relying on load boards and brokers.
Why It’s a Mistake to Rely on Loadboards
Loadboards may be a quick and convenient way to get work when you’re just starting out but its only good as a short-term strategy.
It’s simple enough. Go to a free load board online, which you can even do on your mobile device. You’ll get millions of loads to choose from every month and even the ability to view the credit score of brokers and how long they take to pay. Moreover, you can contact them directly from your loadboard app.
Unfortunately, while work may be plentiful, there are also plenty of people willing to do the work for a ridiculously low rate. In fact, by finding a regular client, you’ll immediately double what you would be paid on a loadboard.
Why It’s a Mistake to Rely on Brokers
The problem with jumping from one broker to the next is inconsistency. Sometimes, of course, you’ll have plenty of work. Unfortunately, the work with also dry up, and you will have long spells without any work at all.
As a result of insufficient loads relying only on loadboards and brokers, many promising new companies go out of business. They just don’t get enough work to cover their costs.
What You Should Do Instead:
You can find good clients by advertising in Yellow Pages or trucking magazines. Find a big, well-established shipper with lots of regular loads who pays well and on time. Find someone who is proud of their reputation.
One more closing tip, especially if you’re a first time business owner, be sure to plan ahead for state and federal taxes. With a good business plan and estimated tax payments you’ll set yourself up nicely when tax time comes along. Using a good income tax calculator can be a big help in preparing.
In conclusion, there are many advantages to starting your own trucking business. You’ll be able to create your own work schedule. You’ll get to decide when it’s a good time to take a break. And, of course, your income will at least double.