When getting to this step, the salespeople will not always tell you the best option for you because they want to make a profit for their company instead.
This is the time when you need to make a plan ahead of time.
Buying an equipment is straightforward and you can get a loan for the rest of the sum.
Remember that as long as you pay the loan, you own the truck equipment, and when you make the last payment, the equipment is entirely yours.
On the other hand, leasing an equipment is a rather complicated process.
There are cases which bring lower payments. In fact, leasing an equipment is more considered as a rental where you pay a fee to use the equipment on a monthly basis.
You could find yourself in a labyrinth of depth even if you own a profitable company.
So, ask yourself again: Should I lease or buy?
There is probably no correct answer because it depends strictly on your situation, mostly economically. Each of both options has advantages and drawbacks.
However, you need to choose wisely since it may lead your business to disaster. In case you cannot make a choice then the smartest way is to hire a CPA specializing in small transportation companies and help you with the choice.
They Always get the Best Customers
Most of the new owner-operators get their first customers in shipping from load boards.
Although it may not be considered as a long-term solution for your freight, you can get good shipping clients.
The thing with the load boards is that you need to search for new customers often.
It is one of the smartest ways to start a trucking business and get it going.
Further, my advice would be to start making calls and build your own clients list – this is a long-term transportation that will actually start making your real profit.
Making the clients list would be hard work, however, it is the smartest thing to do in order to make your company profitable.
I once talked to a transportation industry veteran and he told me that the owners and owner-operators that use load boards earn $10,000 per month.
What is important to remember here is that not all transportation companies make the same profit.
For instance, the grocery stores generate $20,000 per truck on a monthly basis.
Considering it, that is double the money. To illustrate, you can find high paying loads in order to make your business profitable.
They Know Well Their Expenses
There are a lot of company owners who know only the basics of running a company. Once you decide to take this big step, you need to know what your biggest expenses are, same as the victorious transportation companies, and they are:
- Truck maintenance
- Trailer payment
- Fuel costs
- Truck Insurance
- Insurance expenses (health, dental etc.)
Do not forget to involve road and transportation costs.
For instance, if you haul cross-border loads then the transportation not only will last long but it will be more difficult to haul it and they even cost more.
The best thing to do when it comes to expenses and transportation is to hire the best freight brokers in the United States.
Run The Back Office Efficiently
If you want to run your company successfully then you need to know how to run your office smoothly first.
The type of office you run and the work and the environment you create strongly reflects on your company’s reputation and service you provide.
To put it in a different way, you need to know what type of office you want to run.
For example, you could stop your office staff to drive each other crazy because their behavior is a mirror of your business running.
Notably, a business runs on efficiency making it the key to making transportation companies grow.
Things to remember: The knowledge of your employees is not enough, their mentality is also part of their capabilities to do the work.
They Avoid The Cash Flow Problems
Most of the transportation companies find in a situation to experience cash flow problems at specific times.
Usually, cash flow problems appear when you least expect them to and often, they appear because transportation companies do not always get paid on time.
What they actually do is pay on a 40 to 60-day terms. In other words, if you deliver a load today, you will have to wait for 2 months to receive a payment.
If you grow your company fast, you may face expenses way ahead than the revenue.
In that case, you find yourself running out of cash and pull specific loads until your clients start paying.
While this happens, your rivals get a chance to steal your customers.
As shown above, in order to prevent this, you can use freight factoring.
Freight factoring companies are providing you with an advance to start paying your freight bills on time.
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This type of financing provides an advance for your slow-paying freight bills.
Further, the factoring companies are offering you a chance to turn your invoices into cash and get paid immediately for the cargo you hauled today.
Find Loads to Haul
As shown above, loads can be hard to find, especially the top-paying ones. If you are new in the industry, the load boards are the finest start to haul.You can try using free load boards like the following:
Besides finding loads, the boards can also help you create, as well as establish relationships with brokers and shippers. Once you create a solid base of customers, you will start building loyal relationships and get to a level of stable income.
Transportation Companies Check Credit Regularly
Same as the above-mentioned, checking the credit on the customers before each freight is a great factor of the successful transportation companies.