|
The trucking industry may be tremendously profitable, but it is also quite competitive. Every year, many truckers strive and fail to get into the industry. This generally occurs to folks who are excellent truck drivers but poor business owners. Learning how to operate and expand your trucking company is more than just knowing how to drive a truck and pick a route. These seven steps can help you get started. They guide you through the process of becoming a successful business owner. 1. Support the appropriate niche market The most crucial stage in becoming a successful owner-operator is to support the appropriate market segment. This step also impacts small fleet owners. The equipment you acquire, the rates you charge, and the freight lanes you can service are all determined by the market you choose. Owner-operators should generally concentrate on markets that major carriers ignore. Consider transporting specific loads, in other words. Making a living as an owner-operator with a dry van is quite challenging. There is an excessive rivalry between massive carriers and owner-operators attempting to haul "easier" loads. 2. Charge the right amount per mile As an owner-operator, you must decide how much to charge your clients to transport a load. Your rates must be high enough to generate a handsome profit while covering all of your operating expenses. Before you start phoning shippers and generating sales, you need to know your rates. When calling shippers, keep in mind that you want to compete with what brokers charge them. There is an easy method to achieve this: Choose your freight channel; Proceed to a load board; Find ten loads that are all moving in the same direction; Call the brokers and inquire about their fees; Obtain the average; Add 10% to 15% to the amount that brokers charge shippers; Repeat the procedure in the other direction. 3. Determine your operational expenses It is critical to understand your running costs in depth. Otherwise, you have no notion whether or not you will benefit. Establish your fixed expenses. These are charges that are constant regardless of how far you drive. Truck fees, owner-operator insurance, permits, and so on are examples. Determine your variable costs now. These charges are determined by the number of miles driven. Fuel, for example, is a variable expense. The more you drive, the more gas you consume. Determine your "all-in-cost per mile" by adding your fixed and variable costs. This value is quite significant. You may compute your profit by subtracting your "all-in-cost per mile" from your rates (estimated in step #2). 4. Use the proper fuel-purchasing strategy Fuel is the most expensive expenditure for owner-operators. However, both novice and seasoned owner-operators frequently purchase their gasoline inappropriately. They believe that the cheapest pump price gives the cheapest fuel. This technique is incorrect. This might cost you hundreds (or thousands) of dollars. The problem is one of taxation. Regular drivers must pay gasoline taxes in the state where the fuel was purchased. Truck drivers, on the other hand, are subject to IFTA. Truckers pay gasoline taxes as they travel across states, regardless of where they purchased the fuel. Because of the tax issue, you should purchase fuel at the lowest base price possible, regardless of the pump price. The base price is equal to the gasoline price less the tax. 5. Work directly with the shippers Load boards and brokers have a role in your company. When you have an empty vehicle, they may be really beneficial. They are, nevertheless, exceedingly pricey. Brokers often retain 10% to 20% of the load price. That's reasonable because they have to make a livelihood and offer a service to the shipper (and you). Reduce your reliance on brokers and load boards. Create a client list of direct shippers instead. If done correctly, you may build a list of dependable shippers that will keep you occupied. Charge them a price comparable to what brokers charge, but keep everything for yourself. 6. Maintain an effective back office If you want to stay profitable and grow, you must have an effective back office. As you begin to add leased drivers to your company, the relevance of the back office grows. You have several alternatives. One possibility is to do it yourself. You may do business from the cab of your vehicle. You only need a laptop, an Internet connection, and a printer to get started. Accounting software is also required to manage your firm. There are several alternatives available on the market. Truckbytes is a well-known solution that provides a free entry-level product. You may also outsource your back office to a dispatcher. They can, however, be costly. If you choose this route, have a comprehensive interview with them. The incorrect dispatcher has the potential to kill. This is why, companies like The Speed Bill, could help you have a work-efficient back office, that will maintain your business at best. 7. Avoid cash flow issues Trucking is a cash-intensive industry. You are constantly purchasing gasoline, paying insurance payments, truck payments, and so on. Shippers and brokers might pay bills in 15 to 30 days, unless you acquire quick-pays. They can take up to 45 days. This delay might cause cash flow issues for you, especially in the early stages of your organization. Freight bill factoring is one solution to this problem. Factoring solves your cash flow problem by advancing up to 95% of the invoice, frequently on the same day it is submitted. The remaining 5%, less a modest charge, is refunded once your shipper has paid. Many factoring firms also provide gasoline advances, credit cards, and other services. Here is an article where we have talked about how to maintain an effective cashflow. Check it out here. That's why, a company like The Speed Bill, could be the key in your truck business. Don't hesitate to contact us. 
0 Comments
Money, for some people, is something usual, for someone and an instrument for pure growth. Today, we will discuss one of the significant fears of the trucking business, which is the fear of not being paid for the work you have provided. Consumers do not pay invoices on time (or at all) for a variety of reasons, ranging from missing bills to unforeseen additional charges that customers realize they cannot afford. Many small business owners are unsure of how to politely request late payment. Regardless of the reasons, an unpaid invoice is harmful to your organization. If you want to maintain your cash flow strong, you must act; being honest with clients and having some backup measures on hand are essential. These methods may be applied to other companies, so let’s hop on and overpass one of the possible nightmares, the money problem. 1. Before offering your service, discuss all fees and payment terms Putting everything on the table straight immediately not only establishes your client's payment expectations but also develops the trust required for a healthy, good customer relationship. Before beginning a project, ensure that your client understands the estimated costs and that you take the time to answer any queries upfront. 2. Bill for work in advance If you believe that using an invoice method is too dangerous, request complete payment before beginning any work. According to Mat O'Flynn, co-owner of Gilded Agency, the best method to reduce nonpayments is to bill for the work upfront. Some customers may be hesitant to pay before receiving work; it's a two-way street. Encourage them to study testimonials or contact prior clients for comfort. "If you have a spotless track record and continuously take care of clients, you will gain more and more right to receive payment before work," stated Ben Giordano, owner, and founder of FreshySites. "If someone has any questions about our policy, I advise them to phone any of our clients, any day, any time, and inquire about it." You can also request a deposit before beginning any work, and turn down customers who do not appear to be a suitable fit. This is typically obvious from the start; if there is a problem with down payments, there will almost certainly be problems with subsequent invoices. "If a client refuses to pay a deposit, I immediately know not to engage with that client, even if they subsequently beg you to," O'Flynn stated. 3. Send invoices ASAP With so many responsibilities as a small business owner, it's easy to lose sight of a client invoice. You might even forget to send one in the first place, and pursuing a client for payment on a bill you never sent tarnishes your reputation. To avoid falling behind, Waldorf advised sending your invoice as soon as a job was completed - and staying on top of it until it was closed out. The Speed Bill is one of a kind company to take care of your invoices, check it out here. 4. When dealing with late customers, be persistent If a consumer does not respond to electronic correspondence concerning their bill, phone them every day until they do. "Don't be aggressive; just keep asking," advised Hunter Hoffmann, head of communications for small business insurer Hiscox in the United States. "Insist on settling the accounts so you may both focus on more essential things." It will become much easier for them to pay you if they continue to avoid your calls and make excuses." 5. Charge late fees No one likes to pay a late charge, and having them in place ahead of time can help discourage consumers from paying their invoices late. Create a system that is supported by a policy or set of terms of service. For example, if you don't pay within five days, you get a warning; after ten days, you get a late fee; and after twenty days, you lose service, according to Giordano. Let’s imagine the worst case scenario, where the customers are not willing to pay. The first step in collecting payment is to send a courteous reminder that a customer's bill is past due. Most of the time, a late payment was unintentional, and receiving that first follow-up is enough to convince a client to pay as soon as possible. Waldorf admitted that discussing money isn't often easy, so you might want to start slowly. Some clients try to avoid paying by claiming they lost the bill or that they need to reconcile their records to establish the right payment amount, according to Hoffmann. If this is the case, Hoffmann recommends immediately sending an updated invoice - even if you know the customer has the original - to eliminate this excuse. If your client still refuses to pay, be willing to listen to their reasoning. Giordano advised inquiring about their pleasure with your work, their financial difficulties, and anything else that would lead to their refusal to pay. Create a demand payment letter to demonstrate to the customer that you mean business. A demand letter is a formal written letter that describes the amount owing to you and specifies what will happen if the debt is not paid by the due date. That’s being said, if you want to avoid some of this, The Speed Bill is your solution, because we offer the best financial services to your business. We take care of your finance while you manage your business. Not convinced? Visit our site.  We all love doing business, be your boss and be the ONE. However, we all have to follow some rules and guidelines to be clean, one of them being the audit period. Internal audits are an excellent quality management tool for assessing and improving mission-critical processes. They identify what is working well and what needs to be improved. Private companies are required to undergo the dreaded financial audit for a variety of reasons. A financial audit is an effective way to gain a better understanding of your company, whether it's to provide reporting to investors, lenders, or creditors or to make better decisions on regulatory actions or succession planning. However, a company's preparation leading up to the audit can help or obstruct the process, and the outcome is dependent on a combination of adequate preparation and knowing what you need to know going in. That being said, here are 7 tips for successfully passing the audit: 1. Hire "the right" auditing firm. The first and most important step is to locate and hire the appropriate audit firm. There is no one-size-fits-all solution. The right audit firm understands not only the business and industry but also has years of auditing similar companies. Have you met the group? What is their audit strategy? What is the company hoping to gain from the audit? The auditing process is a team effort. It is critical to select a firm that is closely aligned with the business. And, of course, price matters — make sure the price is reasonable in light of the questions raised above. 2. Ensure a thorough understanding of the business from the start. If the audit team gains a thorough understanding of the business from the start, it will be able to develop a stronger risk assessment and audit framework. This may eventually result in fewer audit hours and fees. 3. Understand the audit strategy. Make certain that auditors are focusing on high-risk sectors and firms with more complicated structures, such as many income streams, locations, and segments. During the planning phase, meet with the auditors to share their understanding of high-risk areas. To seek information, auditors often create a prepared-by-client (PBC) list. Examine the PBC list for non-applicable items, and don't be reluctant to question the auditor's findings. 4. Appoint a contact person. This is often the controller or another financial executive with extensive knowledge of both finance and business operations. They can and should use members of their team to acquire information and carry out specific PBC list items as needed, but the majority of contact and information should go through this individual. This ultimately streamlines workflow and removes version control issues. 5. Make information easily accessible. Delays in information sharing lengthen the audit process and can increase costs. Request papers from the archive center. Obtain documents from third-party sources (like banks or vendors). Before the audit begins, provide the audit team with as much information as possible. 6. Take the initiative and treat auditors as valued partners. Consider your auditors to be trustworthy company colleagues. When you are proactive and transparent, you benefit yourself. This includes bringing up and discussing any problems as soon as possible. Throughout the audit, make yourself and your team available to answer inquiries. 7. Maintain audit records. Set up a weekly update call to discuss the audit's status, open items, and any issues. Frequent status meetings with the auditors will keep the audit process on track. These sessions will assist management and auditors in determining whether extra resources or time are required to complete the audit. At The Speed Bill, we can help you keep your financial record and status clean, always available and up-to-date with all your truck business activity. In the end, an audit is necessary, even if it is difficult. However, with planning and patience, it may become a streamlined, if not joyful, procedure.  |
Archives |
RSS Feed
Photo from focusonmore.com