Thinking About Owning a Trucking Company? 8 Tips to Increase Profitability

Ali Raza September 18, 2020September 18, 2020

In the United States, there are 1.2 million trucking companies.

If you’re thinking of starting and owning a trucking company, you’ll have a lot of competition to fight off.

Because of how much competition you’ll have, you need to find new, creative ways to make a profit and stay on top of the competition. Here are a few strategies you can try!

1. Figure Out How to Buy Cheaper Fuel

One of the most expensive costs of running your business will be buying fuel and gas to keep your trucks running.

One way to cut costs is to buy fuel cards. The fuel cards might be more costs upfront, but in the long run, you’ll get a discount on the price you pay for fuel.

You can normally use these at most gas stations or fueling stations around the nation.

2. Get Funds You Need for Your Business

Before you start your business, you should make sure you have some funds to effectively start your business up. It’ll be hard to make a profitable business if you don’t have enough funds to get you on your feet.

Trucks are expensive to buy, and you most likely won’t be able to pay for it all on your own. Instead, you’ll need to apply for a bank loan or borrow the money from somewhere else. Find out if you qualify for the loan and make sure you get all your documents together so that the approval process goes as smoothly as possible.

In addition to the trucks, you’ll probably need other equipment as well. You do have a cheaper option to lease it, but you’ll have to decide if that will be a good investment in the long run.

3. Minimize Your Insurance

In addition to buying the trucks, you’ll also have to invest in trucking insurance.

This insurance can vary depending on all kinds of factors, but you may end up paying thousands of dollars a year for it. Before you go with one company, make sure you try and save some money and shop around for all the other insurance costs.

To increase your profit, you should also try and keep those insurance rates as low as possible. Hire people with good driving records and make sure you keep your credit score relatively high.

4. Mentor and Train Your Drivers Properly

While you should make sure that your drivers have good driving records, you should also make sure that they maintain those records.

Driving a truck can be very difficult, and they’ll need a license and training before they can start working for you. If they don’t have those, you should make sure that they get the proper training and that they renew their licenses when the time comes.

If you have knowledge, experience, or any tips that you can offer them about figuring out how to drive, park, or unload the truck, make sure that you share it with them. Any way you can help them will help you in the end as well.

5. Choose the Right Market

When you start your truck business, make sure that you chose a market that you can actually make a profit off of. For example, some companies specialize or focus on freight forwarding. Others specialize in delivering a specific product.

Find a market that isn’t too saturated and start there. You’ll also want to find a market that gives you work year-round so that your trucks aren’t sitting by making and making you no money.

Depending on what market you’re in, you’ll know how many people you should hire, what rates you should charge, and how many deliveries you’ll be able to complete.

6. Invest in Good Tires

Having good tires on a truck, like Low-Rolling Resistance tires, can be good for the environment and make your trucks more efficient.

With good tires, you’ll be able to drive more miles without having to spend as much money on gas. And the worn-down tires won’t end up taking a toll on your truck, which will save you thousands of dollars in maintenance costs.

7. Do Some Brainstorming

If you feel like you’re getting stuck, call a team meeting and do some brainstorming together. You might come up with some ideas that you never would have thought of.

These ideas could include:

Growing your business and client list
Visit local manufacturers
Host a networking event
Build relationships with clients
Offer rewards or deals

All of these ideas could potentially help to bring in more money to keep your business running.

8. Charge Your Customers Per Mile

To increase the profit your trucking company brings in, make sure that you’re charging your customers the right rate. They need to be high enough to cover your costs of running the business as well as ensuring you’ll still have some profit left over.

You need to find out what other companies in the same market are charging. This way you can be a little bit more competitive and get a rough estimate of what you should be charging.

Before you start talking to potential customers, do a little bit of math and budgeting to find the right cost. A good rule of thumb is to charge customers by the mile.