Instant Factoring Quote

As low as 1.5%

Article: How To Grow a Trucking Company

Growing a successful trucking company takes a lot of hard work and dedication. But above all, it takes a disciplined approach to make the right decisions and take the right actions.

This article helps owner-operators and small fleet owners accomplish this goal. It summarizes the three key steps to take to grow your trucking fleet effectively.

Step #1: Build your fleet

The first thing you need to do to grow your company is to get the right equipment. Most truckers run into a hurdle when they try to get equipment because they require financing. Securing financing can be difficult.

Fortunately, there are a number of financing options for owner-operators. Even those with “less-than-perfect” credit can get some type of financing.

Most truckers use one of two options: they either buy a truck using a loan or they lease a truck. Loans and leases can be structured in several ways. Each of these options has advantages and disadvantages. You need to make a decision based on their merits, your available resources, and your objectives.

Our best advice is to consult a CPA with experience in trucking. They can help determine the best choice for you. A CPA visit may cost you $150 but it will save you much more than that in taxes. The advice of a CPA is critical if you plan to build a fleet. Don’t skimp on that expense.

Note that Commercial Capital LLC does not provide financing to purchase trucks.

Step #2: Find profitable loads

Finding shippers and loads is the toughest part of running a trucking company. Many owner-operators look for loads using a loadboard. This approach has some advantages, since the loadboard allows you to choose loads that match your equipment and your preferred routes.

However, loadboards are usually not worthwhile for truckers in the long run. Loadboards are extremely competitive, especially for popular routes. As a result, you need to charge low rates per mile. You need to be very careful to ensure that pulling a particular load will be profitable.

Also, using a loadboard usually does not lead to a long relationship with the shipper. Consequently, you are always working with new clients. This process can be time consuming.

The better strategy, especially for owner-operators, is to use a loadboard only as a starting point. Start making sales calls so you can build relationships with direct shippers. This last point is critical. In our research, we have found that:

  • Truckers who use loadboards earn about $10,000 per truck, per month
  • Truckers with shipping relationships earn about $20,000 per truck, per month

As you can see, you can double your revenues by building the right relationships with shippers. The numbers should convince you that building relationships is the right way to grow a trucking business.

Step #3: Handle the day-to day-issues

Many owner-operators and small fleet owners get bogged down in the day-to-day running of the business. Moving loads involves a lot of paperwork and coordination. The same goes for running an office. The truth is that it can be tedious, but it’s necessary.

Having good processes to handle operations is critical if you are going to grow your business. You cannot manage a small fleet the same way you manage a single-truck operation. One simple way to develop good processes is to ask a more experienced trucker for advice. Most small fleet owners are happy to share advice as long as you are not competing against them for loads.

You also need to manage your cash flow carefully. New truckers often experience cash flow problems when they get started in the business. Cash flow problems arise because most shippers pays their bills in 30 to 60 days. On the other hand, you need to pay for fuel, drivers, and repairs immediately.

This delay in payments can create a problem if you don’t have a large enough cash reserve. Basically, you run out of cash. And without cash, you won’t be able to take more loads until shippers start paying you. Your company will be stuck in neutral.

You can solve this issue by factoring your freight bills. Freight factoring can be an ideal alternative to finance a new trucking company. Factoring provides you with an advance for your slow-paying invoices. Instead of waiting 30 – 60 days to get paid, you get paid shortly after delivering the load. This upfront payment gives you the money you need to run your business.

Many factoring plans also offer fuel advances. This add-on feature provides you with funding when you pick up the load. You can use these funds to pay for fuel and other delivery expenses.

Instant factoring quote

We are a leading factoring company in the trucking industry. We can provide you with high advances at low rates. For an online quote, please fill out this form. You can also call us toll-free at (877) 300 3258 to speak with an expert.

 

Return to the Freight Bill Factoring Resource Center