As a small fleet owner, you might feel like you’re always being outrun by your competition. It can be difficult to compete with carriers that have hundreds of trucks in their fleet and years of experience behind the wheel. However small fleet owners actually have unique advantages that can help them both scale rapidly and become more profitable in a year or less.
The secret is a business plan, but not the typical model you’re likely familiar with. When you started your business, putting together your objectives, buying your first truck, and setting up shop was a challenge, but your business plan guided you.
Now that you’re operating, you need to modify that plan in order to grow and start bringing in more business while saving money and optimizing your fleet.
If you’re new to the industry, that’s okay, too. This article is the perfect place to start learning exactly what you need to start building a client base from day one.
In the fleet management world, there is far more to success than simply owning a truck and being able to haul cargo. Customer service plays a huge role in retention, which ultimately affects whether you get long-term contracts or are constantly having to prospect new clients.
Your routine budgeting and management can provide an accurate depiction of where your business is headed, what your greatest challenges will be as you expand, and what you need to change now to see immediate results.
For example, if maintenance is costing you too much, then you need to strategize how to improve truck performance. This may include improving your preventative measures, revising your vehicle maintenance schedule, and having greater communication with drivers.
Think about how to optimize the delivery performance of one truck, then find out how to replicate that success across your entire fleet. If you’re new to the industry, this means understanding how finances will be dispersed through your business, and how to space apart your costs to stay profitable between payments.
For example, new authorities should ensure they can operate for at least 90 days before receiving payment. There is often a gap between shippers and receivers issuing payments, and your company will likely have several weeks without any compensation between your first jobs.
If you’re starting off as an owner-operator, make sure that you are fully aware of how different your experience will be from driving to running a business.
Many drivers lease or buy a truck and expect their career to essentially be the same as being a company driver but with better hours and pay. This couldn’t be farther from the truth.
While owner-operators do get more freedom and say in their jobs, they have an entire business to manage in addition to performing well behind the wheel.
Expanding your business skills, including business administration, accounting, and planning, will help you grow and perform better in every facet of your company.
Starting a small trucking fleet starts with you bringing your greatest knowledge, skills, and experience to the table. Even if you hire the best drivers available, a trucking fleet business needs to have the greatest talent at the helm to succeed.
Take some free online courses in business administration. This course from Saylor Academy is a great resource. A strong foundation will allow you to take what you learn about the industry and apply it in the most effective ways.
Scaling a fleet takes streamlined processes, and the faster you perform without error, the easier it will be to grow. Trucking fleet business automation solutions include fleet management, driver tracking, telematics, invoicing, and more.
Automated fleet data analysis software can make business management easier and more accurate. If you’re starting a small trucking fleet, you’ll want as much data as possible to identify trends, modify your business plan, and optimize your fleet for the greatest performance.
Don’t focus solely on profit. Efficiency is key to higher retained earnings for a small fleet owner. At the end of every accounting period, you want as much in your pocket as possible. More trucks mean higher costs in every facet of your business.
This is why operating a trucking fleet business is all about balance — you need to grow to earn more, but you also have to ensure you can financially accommodate the added expense of more vehicles and drivers.
Continually review and refine processes, make it easier to hire compliant and reputable drivers, and increase revenue to expand your fleet.
You’ll need to build profit into your rates when starting a small trucking fleet. This is crucial to scaling sustainably, something that many people overlook when they search how to grow their trucking fleet.
Rather than simply acquire as many clients and vehicles as quickly as possible, you need to think about long-term growth and ongoing costs. From insurance to driver compensation, vehicle maintenance to fuel, every facet of your business will become more expensive as you grow.
In order to offset this trend, you’ll have to factor profit into your rates to ensure you take home more than you spend. As you learn how to optimize your budget and driver performance, you’ll be able to grow your small fleet without falling into debt.
For newcomers curious how to start a fleet company, focus on financial stability, including your credit score and starting capital. You’ll want as little debt as possible when you start driving, so this may mean saving up or cutting costs in your personal funds to avoid having major loans or huge outstanding balances from day one.
For owner-operators or small fleet owners already in business, focus on optimizing your vehicles and improving relationships with your drivers. The better you can run your daily business, the more effective you’ll be at handling new vehicles, more shipments, and additional drivers.