Loading…

Top 4 Ways to Be Successful in the Trucking Business

file3941235005389Trucking businesses are one of America’s backbone industries. Without trucking, there would be no groceries in the refrigerator, no electronics in the stores, and no houses to live in. All the things we purchase and use are made possible by trucking companies, who move the raw materials and finished goods all around the country each and every day. However, not all trucking companies are successful. In fact, most are very small and go out of business in under 3 years. If you’re a small trucking company, the following tips should help you become more successful.

1 Reduce your factoring. Nearly all small trucking companies factor their invoices, which means they use a finance company to lend them money against their receivables. This is a VERY expensive way to operate. Most trucking companies operate at 10% margin or less, and most factoring rates are 3% or more. This leaves the very little profit for the business. If you must factor to get started or grow, just make sure it’s a temporary solution. Have a plan to reduce the number of invoices factored or the time you use a factoring company.

2 Outsource your payroll. Unless you have over 25 employees, it is often better to outsource your payroll to a payroll service than to do it yourself. A payroll service is going to make sure all your tax payments are calculated properly and made on time. And if they don’t, they are responsible for the penalties. The fees for payroll services are so low you can’t do it cheaper in-house. This is a no-brainer.

3 Use fuel cards. A fuel card account will streamline the billing, offer discounts, and allow you to spot fraudulent activities. It’s a lot easier to analyze monthly billing statements from the fuel card company than to enter receipts into a spreadsheet in order to find out which driver is misusing their fuel purchases.

4 Use owner operators. While there are good arguments on both sides of the argument, there are more positives than negatives for smaller companies to use owner operators. They don’t require payroll taxes, they are responsible for their own maintenance, and since their pay is usually a percentage of the load amount, you guarantee yourself a set margin and your business insure against losses. Additionally, it is easier to ramp up or cut back as business fluctuates.

Bad credit semi truck financing made simple

Most of the time as a truck driver, it gets very tiring to work for a truck company considering that one of the most tasking parts is truck-1239018-638x411ensuring that you meet delivery deadlines. Then some regulations and policies need to be followed and at the end of the day, you are a little bit worn out. Therefore, having your truck may not be such a bad idea as you will get to do as many deliveries as you want and the same chance to pick your clients. The other benefit of semi truck financing is that you get the opportunity to choose the most profitable freights enhancing your average income that you would normally get from working for a truck company. Below are some of the major requirements for semi truck financing:

 

Credit Score

 

A credit score is typically a number that is deduced from a mathematical algorithm formula which is based on your credit report in comparison to the credit reports of other people. In other terms, this is what typically determines your credit worthiness or capacity to honor your bills and the higher the score, the better the chances of getting a lower interest rate for your loans. As far as the semi truck loan is concerned the average rating is usually 550+ meaning that at least your credit scores have to be slightly impressive. So to understand your credit score below are some tips on how to improve them.

 

  1. Ensure that at least you have been paying all your bills on time and ensure that there are very few reports on late credit payment.
  2. Ensure that the outstanding debts are $10,000 at the most, otherwise, the lesser it is, the better.
  3. There are higher chances of scoring higher on your credit scores especially if have a long credit history which revolves around the same credit issues.
  4. It is also a good sign if you have revolving credit around credit cards and installment credits which could be an indication of your expertise in handling money.
  5. New Credit application do not augur well with loan applications considering that people who have fallen victims of bankruptcy are usually known for getting the applications.

 

Other Requirements

 

At least you are expected to a have a two-year working experience or more to qualify for the semi truck loans. The other requirement is that you should have a clean or a good driving record. It is important to note that some of these demands are detrimental regarding assuring the financial service providers have an experienced truck driver who not only drives well but has driven for a considerable amount of time.

 

Another factor that you may need to bear in mind is that some of the loan lenders will either offer to service a loan for a used truck or a new truck or even both. Otherwise, it is usually advised if there is a need to service a loan for a used truck it has to be less than five years or else anything more is likely to attract higher interests.