In an industry with razor-thin margins, deluges of paperwork, and what seems like a never-ending parade of tax & registration deadlines, it’s no surprise that even the tiniest of mistakes can put a small carrier out of business.
When one tiny misstep can have such monumental consequences, it’s essential for owner-operators and small fleet owners to stay two steps ahead just to avoid falling behind.
Ultimately, the fate of all transportation companies rests on this: good habits. Cultivating good habits is the only thing that will keep you profitable and compliant in spite of your over-saturated schedule and lack of sleep. And there’s no better time to start upping your game than now.
We’re still in the first quarter of 2015! This is prime time to start incorporating healthy habits into your daily operations. Follow these 7 tips, and you’re guaranteed to be firing on all cylinders while staving off some of the industry’s most common and costly mistakes.
Organize to Prioritize
1. Your Compliance Records- This one goes without saying. Being lax with your maintenance, mileage, and fuel records will only lead to pain in the end. Fines, penalties, and revocation of your authority may ensue. None of these outcomes are good for your reputation or for your wallet either. It’s critical to get in the habit of updating your trip sheets daily, regardless of how little time you have or how tired you are. This not only saves you much more time in the end, it also eliminates the stress of last-minute recordkeeping and ensures fewer errors.
2. Your Finances- Diligently updating financial records is the only way to avoid digging your business into a deep hole of debt. If you don’t know the status of your bottom line and what you’re taking home on each load, how can you know what you have to charge clients to remain profitable? Logging your income and expenses and running frequent profit & loss reports is the first step to avoid this problem and more, but it’s not enough just be aware of your financial status–you need to be actively taking measures to change your financial status for the better.
Creating an emergency fund is one of the best ways to achieve this. Without an emergency fund, you may end up needing cash advances or factoring services just to be able to run. This creates a vicious cycle in which you only lose more and more of your hard-earned money as time goes by. Stabilizing your cash flow allows you to be self-reliant and keeps you in the driver’s seat.
3. Trip Planning is a Must- In addition to booking loads in advance, it’s critical to optimize your route and find the shortest way to get from point A to B, and back again. Using a professional routing service like ProMiles will help you avoid backtracking and out-of-route mileage caused by hidden surprises like road restrictions or construction detours. This not only wastes time and delays deliveries but also burns your precious fuel. Which leads to the next good habit.
4. Increase Fuel Efficiency- Managing fuel costs is the number one problem in this industry. This alone can make or break a business. And here is where the little habits repeated daily add up to a huge difference. Maintaining proper tire pressure isn’t the only way to ensure you get decent MPG. There are other, silent MPG killers, like chrome. Having chrome in every nook and cranny may look slick, but it drives up maintenance costs and, since it weighs more, drives up your fuel use too. Slowing down is another way to keep money out of the pump and in your bank account. Driving fast may get you there quicker, but it will ultimately reduce your take home.
5. Streamline Communication- Find more efficient ways to check-in with clients and drivers. Using an app is far more efficient than making multiple phone calls, and there are several free apps available. And the payoff here is greater than just saving time, because good communication is essential for building strong relationships, the key to growing any transportation business.
6. The Up’s and Down’s of Load Boards- If you’re just starting out or if you’ve hit a dry spell, load boards like dat.com can be a great resource for snagging a few loads on the fly. Sitting back and waiting for business to come to you is a surefire way to keep the drought going longer. Put yourself out there and offer a competitive price to break the cycle and get hauling.
However, don’t make load boards your bread and butter. When you find a client this way, you’re likely to only ever work with them once, which is not going to sustain your business. Moreover, you’re less likely to get high-paying loads since load boards are extremely competitive and force you to drive your prices down. To ensure a steady and healthy income what you really need are relationships with shippers. This will ensure regular loads, and typically, higher-paying loads.
7. Ask for referrals- Another way to get more business is to ask your current clients for referrals. You can even create incentives to spur your clients to recommend you. If there’s a little something in it for them, perhaps a slight discount on their next order, they’ll be much more likely to pass your information along.
Start incorporating these 7 habits each day, and you’ll be laying the groundwork for a successful, profitable transportation business. But don’t stop there. There’s always more you can be doing to ensure your business is running at its peak.
So head over to Part 2 with 7 More Tips for Maximizing Your Trucking Business. We’ll discuss more ways to get high-paying loads, build relationships with clients and drivers, and increase your credibility.