In starting a trucking business, there are plenty of business aspects and operational activities that should be diligently followed and implemented to ensure a smooth flow in your day to day activities. If you want to be an owner-operator, a truck seller, or simply enter the trucking industry, there are several common mistakes that you can avoid to be able to start your business on the right foot.
Common Startup Mistakes in the Trucking Industry and How to Avoid Them
To run your trucking company smoothly, here are the biggest mistakes startup companies usually commit and tips on how you can avoid them.
Not Having Regular Maintenance Checks
Regular maintenance is required for any type of machine, including vehicles. Semi-trucks also require the same. Unexpected machine troubles can be prevented with regular service maintenance and check-ups. You’ll be able to save hundreds, even thousands of dollars if you opt to have your semi-trucks regularly maintained.
Old semi trucks for sale are also perfect examples of vehicles that require regular maintenance and servicing. Preventive maintenance in these big machines can help eliminate downtime for your truck, as well as keep it in its best shape possible, ready to be sold at any time. Tucking industry professionals recommend annual repairs and tune-ups to keep your semi-trucks, both old and new, running in their best condition.
A major engine repair on a truck can cost around $22,000, even more, for severely neglected semi-trucks and vehicles. The number alone clearly depicts how important and how cheaper preventive maintenance is compared to a major repair in the long run. Although some may say that regular maintenance checks can be too mundane, simple, and not necessarily significant, not doing so builds up issues and problems that can be quite too expensive relative to time. Thus, regular maintenance for your old semi-trucks or new ones can be concluded as a much cheaper alternative compared to an unexpected, major repair.
To be thorough, the most basic and common maintenance checks required for semi-trucks and bigger vehicles are as follows:
- Wear and tear on tires
- Regular Oil Changes
- Vent Cleaning
- Brake Checks
- Radiator Issues
Overextending and Lack of Cash Flow Monitoring
Cash flow can be quite tight during the first few months or years of your start-up business. If you do not pay close attention to details concerning your company’s finances, you might find yourself in deep trouble.
Starting a trucking business, even a small one, can consume a huge amount of capital, with a return of investments quite slow during the earlier stages of the business. A tractor can cause you anywhere from $130,000 while trailers start anywhere from $50,000 to $100,000. On top of the cost of your fleet, the cost of maintenance, old semi truck insurance, and day to day operation of your business can add up to a huge amount of capital. Having a full account of these details keeps you on top of your cash flow and better control of the finances of your business.
Another challenge is in maintaining and ensuring that payments arrive timely for your business. Customers usually pay 45-60days after a delivery. Be on top of your invoice and ensure that you have enough cash available to run the business while waiting for payments from your clients. Regularly update your clients to ensure that your invoices are paid in a timely manner. If possible, find trucking clients that have a good reputation in the industry.
Tracking software can help you monitor your cash-flow and finances.
Lack of Proper Service Pricing
If you are in the trucking industry, the lack of proper costing and pricing may cost a lot of issues for your cash flow and your business as a whole. You should have a concrete idea of your cost per mile before you submit your quotes to your clients. This cost should include the cost of your fuel, maintaining your truck, your driver’s pay per mile, insurance cost, operational costs, and many more. Your cost per mile should be available in your business plan, as well as the contingencies and adjustments that it may require the changing cost of fuel and other operational costs.
Ensure that you have complete information on what to include in your service prices. When selling a truck, you should also include other costs – maintenance, advertising, marketing, admin costs, and the like, to ensure that you are indeed getting the best possible ROI for your capital.
There are plenty of other operational, financial, and day-to-day challenges for trucking companies and start-up businesses. However, failing to pay attention to the details above can cause a lot of potential losses for your business. To make your startup trucking business or buying and selling trucks, paying close attention to these areas can help your business significantly in the long run.