I sometimes receive e-mails asking for advice on how to start a trucking company. That was covered in the first three Truck News columns I wrote, so we can’t rehash it again.
Since this industry is a continuous learning experience, I felt a little out of place offering opinions as advice in the first place. I don’t have enough grey hair to qualify as an expert on anything. Please check out the online archives though, at Trucknews.com. No matter how much experience you have, sometimes the best research you can do is to see what was ‘breaking news’ two years ago.
There are, however, a few pointers I can share on what to do after you have started the wheels turning in your business. By now, it should be obvious that I’ve never taken a business course. Everything I write in this column is based on opinion or personal experience.
Ask advice from any other small carriers you become acquainted with. You’ll end up with a lot of well- rounded advice. No one person has experienced every business circumstance, so you need to ask around and compile your own ‘best of’ list. If you want to get in the refrigerated, livestock, or tank business, for instance, I’m the last guy you should ask for advice.
Of course, you must not believe everything you hear. If what you hear sounds a little outlandish, maybe set that aside.
“Penny wise and pound foolish” is an old phrase that often described me. Buy equipment that is properly spec’d, and doesn’t require changes. On paper, it looks easy to mess around with tire sizes to change improper gearing. Sure. On paper, a bumblebee can’t fly, either.
We started our business with no loans or credit, so starting off with a 20-year-old truck seemed wise. My previous profession was turning wrenches, so old equipment didn’t scare me. The truck worked fine, but when it was replaced with a five-year-old the following year, I realized my initial mistake. The new truck’s better fuel mileage almost covered the payments.
Driving old equipment had gained me little. Some of my other mistakes included: buying flatbeds with softwood floors. They were almost as light as aluminum, but you couldn’t drive machinery on the deck. Once, I added rub rails to a 96-inch wide trailer to make it a 102-inch. Dumb, and likely illegal.
The best advice I was given was from a former employer who said ‘When buying used equipment, buy it at a price as if it had bald tires, dead batteries, and empty tanks. In the life-cycle of that equipment, those factors become insignificant. It’s foolish to pay extra just for good rubber.’
He also had specific spec’s in mind, for trucks and trailers, and refused to stray from them.
Poverty and paranoia have been my best friends in this business. Wishing to grow the company, I was horrified if a day went by where I had nothing to do. Not much scares me, except the thought of financial insecurity.
Every time I had a day with no load, I would fill my pockets with business cards and start beating on doors. It’s ridiculous to think someone would give you a load that day, but most of these one-day sales trips netted at least an occasional future load. On that note, don’t grab at a temporary ‘get rich quick’ job. Any financial gain will turn into a loss if you lose good, consistent customers because you went AWOL for a month. If you’re a really good salesman, be careful your sales trips don’t have you biting off more than you can handle.
At some point, you will need to accept freight from other carriers. If you don’t know them, Google their names. If you have a bad feel for the carrier, don’t deal with them.
We refused to deal with a reputedly slippery operator, until they hired a well-known, well-respected dispatcher. He wouldn’t work for an unethical carrier would he? Apparently, yes. No pay, no return calls, and that will never change. In this case, you will be disappointed in how expensive and terribly ineffective your legal choices are; usually not even worth pursuing for a small amount.
In such cases, use your constitutional right of free speech. Tell your story to whoever wishes to listen. By the time word of mouth travels (and this industry is smaller than you may think), the deadbeat carrier will lose reputation and revenue that will dwarf what they owed you. They may find it difficult to load their own trucks with brokered freight.
If you don’t have sufficient financial experience in the business, be wary of what you read. In most standard media, statistics, and industry quotes regarding revenue and profit margins apply to large carriers , not you. If your per-truck-revenue, and associated profit margin is the same as a mega-fleet, you won’t make it through the first year. Surviving on volume with a minimal profit margin is what I call ‘The numbers game.’ If your grasp of the financials is that slim, you aren’t ready to start your own business yet, and our current business atmosphere is not friendly to learning by trial.
Last but not least, if you share your wife’s office computer, be sure to let her know in advance if you’re researching to bid an overdimensional move. It saves a lot of explaining later as to why you were doing a Google search for ‘Escorts’.