Liv­ing the dream

Plan­ning to leave be­hind your reg­u­lar em­ployee driver job and be­come a small busi­ness per­son? There are ques­tions that need to be an­swered be­fore you take the big step, Lynette Gray writes

Owner Driver - - News -

THE TRANS­PORT in­dus­try in Aus­tralia has be­come more ef­fi­cient and pro­fes­sional as cus­tomers ex­pect a higher level of ser­vice in a much shorter time frame. Freight for­ward­ing and con­tract lo­gis­tics con­tinue to be a growth in­dus­try.

At first glance, be­com­ing a part of this in­dus­try may seem like an at­trac­tive op­por­tu­nity to start your own small busi­ness, but be­fore you jump in – work boots and all – you need to be aware of some of the pit­falls and lim­i­ta­tions.

If you are you crav­ing the flex­i­bil­ity of be­ing an owner- driver, I com­pletely un­der­stand. But be aware that be­ing self-em­ployed can be chal­leng­ing. It can be very sat­is­fy­ing to know that ev­ery sin­gle day you are ac­com­plish­ing and build­ing some­thing for your­self. Even though you will prob­a­bly be work­ing from be­fore dawn to dusk to get your busi­ness up and run­ning for the first three to five years, at least it will be on your terms.

The re­al­ity is sim­ple. Your day job is just that: a job! Get­ting up each day to work in your own busi­ness, driv­ing your own truck, cre­at­ing your own ca­reer and future for your fam­ily is life chang­ing. How­ever, it does come with pit­falls.

You may need to mort­gage your house and put your fam­ily’s fi­nan­cial se­cu­rity at risk to pur­chase your rig. You may be work­ing more days and longer hours, spend­ing less time with loved ones, and you may find your­self ask­ing, “Why am I do­ing this?” But with the right plan­ning you can make your small busi­ness a suc­cess.

BUSI­NESS PLAN

Af­ter 20 years’ ex­pe­ri­ence in the in­dus­try, I have put to­gether the fol­low­ing ques­tions you should ask your­self. You must build your busi­ness plan know­ing you have got the an­swers to these ques­tions al­ready re­solved prior to get­ting in the driver’s seat.

Where is the money com­ing from to make the pay­ments on your truck? You can­not live month to month when you are start­ing a new busi­ness as the pres­sure will be too much. Bud­get for your truck pay­ments based on your an­nual busi­ness plan. When you pur­chase a new ve­hi­cle, you have some breath­ing space dur­ing the war­ranty pe­riod when all ex­penses are in­cluded ex­cept ser­vic­ing costs. It is wise to utilise this time to build a solid in­come and cus­tomer base.

Where are you go­ing to find a good steady stream of in­come? If you have con­tracts with par­tic­u­lar sup­pli­ers, this will help you with your bud­get­ing. The trick is to have con­tracts with dif­fer­ent sea­sonal prod­ucts or a prod­uct that is in con­stant sup­ply.

We car­ried ex­ces­sive amounts of seafood and choco­late in the months prior to Easter and Christ­mas and flow­ers in the spring. Meat was a con­stant freight item for us.

Are the prod­ucts you have cho­sen to cart sea­sonal? If so, what are you go­ing to cart in the off-sea­son? Lim­it­ing your op­tions with cargo may mean you are flat out for three to four months of the year, but your truck is idle and cov­ered in cob­webs for the re­main­der of the year. It is im­por­tant to plan for the full 12-month cy­cle. This may mean trav­el­ing fur­ther at times, but at least your wheels are rolling and you are still gen­er­at­ing in­come.

Can you hook on an ex­tra trailer when your run gets too big or run a B-dou­ble in­stead? This way you can in­crease your pay­load and, marginally, your costs.

Can you help a fel­low owner- driver and pull an ex­tra trailer for them? How about when they must hook and un­hook a trailer at heavy ve­hi­cle zones? Re­fer to www.nhvr.gov.au for more in­for­ma­tion.

Can you cart dry goods in your fridge van? Maybe you have a load of ba­nanas up and a load of elec­tri­cal freight back? Mak­ing your re­turn trips a rev­enue stream too is im­per­a­tive to mak­ing your busi­ness prof­itable in the early years. Plan your trips both ways ev­ery time; dead­head­ing will send you broke quickly.

What else can you cart in your tip­pers that will not dam­age them? If you are cart­ing grain from a prop­erty, can you cart feed into the prop­erty to utilise the run­ning ex­penses you will in­cur any­way? Back­load­ing is of­ten quoted at a re­duced rate.

Is there a de­mand for the ser­vices that you of­fer? This is an im­por­tant ques­tion to an­swer. If you’ve ever watched an episode of Shark Tank you will know that hav­ing a great idea is a good start, but there also must be a need in the mar­ket. If you can’t sell your ser­vices or prod­ucts, then you won’t make any money.

As an owner- driver, your prod­uct is you. You are what your clients are buy­ing; they must have faith in you to take their cargo to their des­ti­na­tion with­out dam­ag­ing it.

How will you dif­fer­en­ti­ate your­self from your com­peti­tors? In our busi­ness, we began an on­line book­ing sys­tem that al­lowed our clients to make in­stant book­ings with­out hav­ing to tele­phone our of­fice, sav­ing them time (and time is money).

An­other key to your new busi­ness suc­cess is get­ting your costs and quotes right. Go­ing to work each day to lose money is no one’s dream, right? So don’t just un­der­cut the next per­son to get the job; all that will hap­pen is you will both go broke, and no-one wins. You must know what your over­heads are and this in­cludes the costs in­volved in plan­ning to re­place your ve­hi­cle. You should have a value per kilo­me­tre and per minute for load­ing so that you know ex­actly what you need to charge. Don’t be the cheap­est, be the most con­sis­tent and reli­able – these are the things that mat­ter in trans­port to­day!

In our busi­ness, I found an im­por­tant strat­egy to our growth and prof­itabil­ity was our abil­ity to an­a­lyse our cus­tomers’ lo­gis­ti­cal needs and to re­spond quickly with a so­lu­tion. Work­ing closely with your clients, you can ad­just your busi­ness plans to en­sure you max­imise your rev­enue per cus­tomer.

Win­ning new busi­ness is not easy but grow­ing your share of your ex­ist­ing cus­tomers’ busi­ness is, pro­vided you meet your agreed tar­gets (and hope­fully ex­ceed them). But make sure you main­tain a strong cus­tomer base of vary­ing types of freight. As the old say­ing goes: don’t have all your eggs in one bas­ket.

SMILE ON YOUR DIAL

My fi­nal piece of ad­vice is ‘smile’. Smiles are pretty darn at­trac­tive for more rea­sons than one. When you have a smile, it sug­gests that you’re per­son­able, easy-go­ing and em­pa­thetic. The more com­fort­able peo­ple feel when they are around you, the more likely they are to want to give you more work. More work equals more money equals less stress.

So the next time you want to get loaded and hit the road, slap a grin on your face and you will be tak­ing ad­van­tage of the many ben­e­fits smil­ing has to of­fer.

Trans­porta­tion and lo­gis­tics com­pa­nies will need to deal with nu­mer­ous is­sues in the years ahead, how­ever freight for­ward­ing and con­tract lo­gis­tics con­tin­ues to be a growth in­dus­try.

It is hard work, but you will reap the re­wards if you plan for an en­tire 12-to-24-month pe­riod, un­der­stand the real costs of run­ning your busi­ness, stay cash-flow positive, spend wisely, and grow at a steady rate. Go ahead … live your dream!

If you want to know more, I am pleased to of­fer you a 30-minute free dis­cov­ery ses­sion where we can talk about who is pack­ing your para­chute in your life and busi­ness. Or we can go deeper into your busi­ness, your fears, your story or your bat­tles within these 30 minutes. And guess what? It’s ab­so­lutely free!

You can con­tact me via the web­site www.load­so­lu­tions.com.au or on Face­book at www.face­book.com/ load­so­lu­tions.com.au

Feel free to share this ar­ti­cle if you think it can add value to your fam­ily, friends or col­leagues. Thank you and I hope you learned some­thing new from this short read.

LYNETTE GRAY

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