Building a successful company is the goal of most business owners. There are many schools of thought on the right and wrong way to grow. In the end, it takes planning, hard work, and tough decisions.
For over 25 years, TCI Business Capital has worked with hundreds and hundreds of fleet owners and operators who all shared the goal of success. Each of them had ideas they wanted to pursue and a vision of how they would make it happen. From this experience, there are three consistent keys to successful fleet growth.
To grow successfully takes planning and resources. Developing strategic business relationships makes planning easier. For many fleet owners, using a CPA with trucking industry experience is crucial. A knowledgeable, experienced CPA will be current on tax laws, provide advice on equipment purchases and leases, and guidance on all financial matters.
A strong relationship with a bank or finance company is essential to the successful growth of a fleet. This is a lot easier said than done. Securing financing can be difficult even for established companies. A CPA will assist with the application process and provide any information a bank or finance company requests.
A relationship with a bank or finance company is a two-way street. As with any relationship, what you get out of it is often equal to what you put into it. Establish an open line of communication with your lender. Let them know what is going on, both good and bad. Be prompt when responding to requests and ask the same of them.
Just as a CPA with trucking experience is crucial, a banker or account manager with trucking industry knowledge can be very beneficial. They will know the up and down nature of freight rates and loads. The more understanding they have of your business, the better they can serve you. After all, they want to keep you as a client too.
The last critical strategic partner is your insurance provider. With the number of nuclear verdicts against trucking fleets at an all-time high, insurance costs are rising out of control. Talk with your insurance provider about ways to reduce rates. Just like with your banker, keep them informed of changes to your equipment and drivers. Let them know of your needs and work with them to get the right policy for your company.
Decisions on whether to buy or lease, do I have the adequate cash flow to make these new payments, what terms do I need, how is this new equipment going to affect my insurance premiums, and other questions are critical. In my 27 years of transportation financing, I cannot emphasize enough how important it is to have the right partner in accounting, banking/finance, insurance, and how essential they are for your growth.
Over the years, we have seen many companies with a shotgun strategy when it comes to booking loads. They will take a load anywhere and figure out later how to get home. This strategy does not typically end well. In ten days, trucks end up scattered across all four compass points, and chaos ensues. Between the weather, load availability, road conditions, and more, it is a recipe for losing money.
Fleets that only use load boards to fill their trucks take the same risk. Yes, load boards and brokers have gotten much better over the last several years, but nothing beats a direct customer. A direct customer has lanes you can use to train drivers, test equipment, and more.
Profitable and consistent lanes lead to better service and driver retention. Find that direct customer and build that relationship. Teach them what makes you different and fill that niche for them.
You can get by with good drivers and staff. To be successful, you need great drivers and staff. So, where do you find them? It is simple, make the ones you have now great. There are many things a fleet owner can do to improve the work environment and make their employee’s jobs easier and more fulfilling.
Hiring drivers is an expensive and risky venture. All drivers are representing you and your customer everywhere they load and deliver. Setting expectations of conduct, having a driver training or mentoring program, and understanding what their strengths and weaknesses are out on the road, is an investment in their success.
New technology is great if everyone understands how it works and the benefits of using it. Think about your trucking software system; does it integrate well for everyone? If the drivers have trouble using it, it is not doing any good. Training and demonstrated competency on software will pay for itself.
The same idea holds true for your office staff. Are they compete and well-trained in their roles? Investing in office software training and other tools the staff uses daily is an investment in your team.
No matter the business, employees want to feel they are valued and appreciated. Creating an environment where people think they are a vital part of the company’s success and making a difference should be a goal. Retaining good employees and making them great is much less expensive than continually hiring and training new ones.
Now comes the BIG question: Are your drivers happy? If not, why? Is it the lane of traffic you decided to run? Is it the age of your equipment? Is it driver comfort and home time? Transportation Associations are an excellent resource for these questions. Drivers talk! They know what Company A has, what they are offering, and want it too, or they will be gone!
Association events are great places that showcase new and existing products and services. A lot of times, this is where you can meet your strategic partners. Association events are an excellent place to talk to your industry peers about what works or not working for them. The more you get involved in your local and national associations, the more you will get from them. It pays off.
Why wait any longer? For trucking companies needing stability and control, accounts receivable financing provides a reliable, cost-effective financing option for the road ahead. To get started contact TCI Business Capital by calling (800) 707-4845, or complete the contact us form on the right side of this page.