By: First Union | Date:
Scale Your Trucking Business
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Many small businesses are suffering right now because of the market and COVID-19 scares. Although, a select few industries could be getting more business than ever before. One of these industries is trucking. Due to panic-buying, people are flocking to stores to stock their shelves. This could be a big business for anyone involved in the transportation of goods. As stores hustle to restock, there is another line of work behind the scenes. If your trucking business is taking off unexpectedly right now, follow these steps to scale your growth.
The first step of successfully scaling any business is planning. Seeing as things are happening fast, you may have not had time to actually sit down and think about the growth and potential happening for your trucking business right now. While it can be hard not to get caught up in the excitement and rush, the most important thing you can do right now is taking a deep breath, sit down, and do some basic planning for the growth you are facing. That is the only way you can turn this opportunity into long-lasting success.
Now is not the time to get tripped up on something basic. If you are looking to grow and make industry connections then you first must make sure you have the basics in order. Make sure you have all the legal requirements and have everything for your business up to date. Prevent fines and delays by having all your paperwork in order, no matter how small your fleet is at the moment. To scale, you have to already be working with a successful model. So if there are any kinks in your paperwork, payroll, or other seemingly minor details, take time to iron them out before moving forward as it will save you valuable time in the future.
Another seemingly basic task that will pay off big time in the future is having your costs in order. No one likes a surprise bill, and when you are working to scale your business you have to know the ins and outs of every cost on your expense sheet and make sure it's working for you. First, calculate your hard costs. These are things that you have to pay on a recurring basis, like your insurance, and office rent, and permits. Do a little shopping and make sure you are getting the best rates possible to help your bottom line. Any money you can save here will go straight to making your profit margin look healthy. Sometimes it seems easiest to go with one of the first options presented to you, time is money, right? But, if you can allow just a little time to shop for rates it will greatly help in the long run of your business.
Once you have your regular costs set up for success, take a look at your variable costs. Of course, the biggest of these will be fuel for your trucking company. As you grow, this will be the expense that will have the greatest effect on your profit margin. It is essential to the success of your business to make sure you are buying fuel in the most efficient way for your fleet. It may not always be best to buy fuel based on the cheapest price you can find at the pump. Trucking companies are dealing with different taxes on fuel, you will be taxed on the amount of fuel used on the journey through every state. The International Fuel Tax Agreement is valid in the continental US and Canada (Alaska and Hawaii are excluded/) and you should be well versed in it to make the most of your fuel dollars. This agreement is meant to make it easier for trucking companies that will report fuel usage in more than one jurisdiction. Simply put, you will be taxed for fuel based on each individual state-driven through on the journey. So, when you are filling up remember not to simply look at the lowest pump price, but the lowest base price before the state tax is applied. It seems tedious but if you make this a practice as you grow it will save a great deal of money.
Now that you have all your basics and your costs in order, it's time to grow smart. If you have more demand than you can handle, it may be time to grow your fleet by investing in a new truck and hiring another worker. This is a big step and should not be taken lightly. Hiring the wrong person or someone who is unqualified could unravel all your hard work and put your company at risk. Of course, you will make sure they have their Commercial Drivers License (CDL/), but there are some other things to look out for when hiring a new trucker. Remember that some states have special requirements, check with your state to see what they are. Also, there are different requirements depending on the type of trucks and materials being transported. Some insurance agencies will only cover new employees with at least 2 years of road experience. Take care to talk to your agent about this before you bring on anyone new. Taking a little extra time to verify all of this now will save you time and money in the long run.
When you hire a new driver, keep in mind that this person will be representing your company. Good representation will be the key to success in maintaining the growth you are experiencing now. Look for someone who is honest and has integrity. Also, they will need to be able to handle stressful situations when they arise. If anything may go wrong they should be able to troubleshoot the issues and come up with solutions on the fly. Use your personal experiences and turn them into interview questions. Ask prospective hires what they would have done in situations you have faced, and use their answers to gauge if they are a good match taking all these things into account. It seems like a lot to go through but this will pay off exponentially in the long run if you can hire and retain great workers to grow with your company.
Follow these steps to make sure you are effectively scaling your business for sustainable growth. Taking some time now to make sure you have every little thing in order may seem impossible but it will pay off in the long run to have a sustainable growth model. If you need funds to aid in the growth of your trucking business First Union Lending can help. Click here or call 863-825-5626.