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
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.
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
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