As experts in the freight factoring industry, Transportation Management Group is passionate about about giving you the financial help and industry insights to help your freight business grow—it’s been our mission for almost 20 years.
In this blog, we’ll discuss some of the best practices that lead to a successful trucking business so you company can reach its full potential.
Invest in quality equipment.
Spending money on quality freight equipment like trucks and storage facilities is the first and most expensive purchase you’ll make as you build your freight outfit. It can be daunting to spend this kind of money up front without any guarantee of financial returns, but it’s essential if you’re trying to get in the business.
A number of new freight companies will attempt to save a little money up front by purchasing lower quality or used equipment, but this strategy backfires more often than not. Used equipment will ultimately need more repairs—unexpected expenses that can destroy your operational budget.
Spending more money up front might sting at first, but you’ll have strong, dependable, and predictable equipment for years to come, which will make your expenses more predictable as well.
Understand your expenses.
When it comes to running a freight business, understanding your expenses is the ultimate key to success. You must be able to predict and manage the costs of maintenance and repairs, fuel, operational expenses, and employee wages, while creating enough income from freight jobs to make a profit of some sort. Ideally, you’d also have some sort of reserve fund to handle any unexpected or emergency expenses.
With this in mind, it’s important to bid for freight jobs in a way that is competitive with the market, but won’t put your budget in the red over time. As a new freight company, this can be a test of patience—it’s easy to feel like you must shortchange yourself by bidding aggressively to grow your customer base. But with some patience in the bidding game, you’ll find customers that are just right for your business and your budget.
Check back soon for part 2 of this blog to learn more tips that can grow your freight factoring business!