THURSDAY, FEBRUARY 25, 2021
Trucking companies face a variety of risks day in and day out, especially if they are new to the landscape of operation. While you stand a lot to gain by starting your own trucking company, you also stand a lot to lose.
Knowing the common reasons that other trucking companies fail can help you prevent being one of them.
1. Lack of Resources
Cash-flow and resources are crucial for all businesses. A lack of cash-flow and customers is often the reason for trucking companies go out of business within the first few years. Transporting low-paying freight can cost more money than it profits. Not to mention that trucks themselves are expensive, between payments, insurance, maintenance and gas. Be sure to understand the business opportunities in your area and identify the higher paying freight.
2. Poor Planning
While the idea of starting a business can be exciting, the actual process cannot be rushed. No business should be started without a definitive plan in mind. Every trucking company needs a firm foundation to build upon, as well as applicable strategies and techniques to operate efficiently. Understand your client base and collaborate with professionals to come up with a comprehensive plan.
Know the market. Low-paying freight will not stay profitable, so be sure to calculate weight surcharges and the cost of fuel into quotes you give customers.
3. Management Failures
Managers are one of the most important aspects of a business when it comes to day to day operations, and for good reason. Hire professional bookkeeping services or management teams to keep track of money flow, bills, operations and more. Know where money is going compared to how much is coming in so your business doesn’t overextend. Make sure to vet managers and employees carefully so that you know you can trust who is running your business.
4. Failure to Comply
Starting and running a trucking company also requires you to follow certain laws, regulations and maintenance. Every state has its own requirements when it comes to trucking insurance depending on freight, weight of the truck and distance being traveled.
The company must keep up its CDC and all drivers should maintain valid licenses. It’s also important for maintenance on the trucks to be kept. Failure to keep up maintenance can cause accidents and lead to the trucking company to be shut down or cited. Have all trucks serviced and maintained regularly in order to comply with regulations.
When in doubt, make sure you have a comprehensive and reliable trucking insurance policy geared to protect you, your employees and assets of the business in case of an accident.
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