Many entrepreneurs are starting to see the value of operating a business within the industry of truck driving. However, startup companies suffer from high failure rates, and new establishments survive on thin profit margins. On top of that, the trucker’s ongoing requirement to maintain equipment, buy fuel and do payroll can sometimes leave the short-term fiscal strength of a company in a precarious state.
So how does a business owner plan for growth in such a tumultuous situation? Increasing loads/deliveries could be an option, but it comes with the risk of employees getting infuriated from the increased workload. Luckily, a better solution exists. And the best part? You don’t have to take any drastic measures – like reorganizing your setup – to see a significant improvement in your bottom line.
You just have to reduce costs.
Here are four easy and straightforward cost-saving strategies that you can implement right away:
1. Save Money On Operating Authority (MC Number)
It takes a good amount of money to run your business. Expenses like operating authority licenses and state permits can disrupt cash flow if you don’t plan them right. That’s where trucking authority bundles are a blessing in disguise. Companies like TBS can help truck business owners get started with their BOC3 and MC/DOT# for free. Also, leading compliance companies can eliminate the confusion associated with state permits and truck licensing procedures, expedite the process, and improve the client’s cash flow. Some companies even allow clients to build their bundles and add Consortium Enrollment, UCR and more.
2. Look for Ways to Enhance Fuel Efficiency
Did you know that fuel represents the most significant share of overall average marginal costs for transportation companies? In other words, trucking startups will spend more on fuel than on any other part of the business. Hence, enhancing fuel efficiency is one of the most effective ways to slash costs. It can be achieved through proper training of personnel; make sure the drivers gain knowledge about the benefits of efficiency by highlighting idling times and acceleration rates. Also, founders can re-analyze their routes to see if there is an opportunity for better route organization, as well as conduct vehicle inspections to identify cost-reduction opportunities.
3. Outsource Where Needed
Outsourcing represents a significant cost opportunity. While entrepreneurs often prefer having control over every task, spreading yourself too thin across processes that aren’t your forte won’t only hurt your profits, but make you less productive. It’s therefore smart to focus on your core competencies and utilize outsourcing for other tasks. While subcontracting tasks depletes funds, the return on investment is high in the long run. Smoother day-to-day operations and enhanced efficiency mean increased productivity and customer satisfaction, which offsets the expense associated with initial investments.
You can outsource great talents online, such as job portals. Just simply create an employer account and be able to outsource freelance workers. Outsourcing companies also exist to help bring you the right people you need to handle some key tasks. For instance, you can outsource your accounting and bookkeeping or customer services.
When outsourcing some key tasks, make sure to set clear terms. You don’t want to compromise your business data because of hiring the wrong people. Deal with a reputable outsourcing company or worker by checking their portfolio and reviews. Avoid handing in highly confidential information, which when leaked, can ruin your trucking business.
4. Train Staff Members to Do More
On the other hand, truck company owners should know what not to subcontract. For instance, anything that involves direct contact with clients can be sourced in-house – e.g., customer service or lead generation tasks. Doing so allows you to control brand messaging and understand how target audiences perceive your brand. Give staff members time to gain valuable skills – e.g., customer service or content marketing – so that they are capable of carrying out more tasks in-house. This is going to save expenses in the long-run.
As you grow your trucking business, you might want to invest in training your staff members to use technology to hasten your trucking operations. As early as possible, hire ones who are tech-savvy because you might need to use this skill soon when using trucking business systems. Moreover, online courses are available to make training new and experienced staff members a lot easier.
You can start a trucking business by ensuring you have all aspects covered, like this checklist. When you have everything checked, then you’ll be more confident to run your business on a day-to-day basis.
Hopefully, these four expense trimming tips will get you headed on the right path that leads to an improved bottom line.