Starting strong: Building a strong foundation as an owner-operator
Like any business, building a strong foundation is vital for an owner-operator, but getting it right can be tricky. You can find the right strategies here.
Every successful business begins with building a strong foundation; the same applies to owner-operators, especially given the business's operating style. As of 2022, there were 3.5 million truckers in the US, and 48.5% were owner-operators. This makes an owner-operator's business critical to the trucking industry and the economy.
Unfortunately, a significant chunk of owner-operator businesses fail because they do not invest in getting it right from the foundation. Building a strong foundation as a business owner is more than coming up with an idea and looking for ways to fund it.
Information and technology are your greatest allies in building a strong foundation as an owner-operator business. Before starting out, do your due diligence on the industry and demand, choose the niche you are comfortable with, and find out what you can leverage in the industry that will give you a chance at success.
Building a strong foundation as an owner-operator business
Strong foundations determine the strength of any structure. It's not far-fetched to expect the same in your business, regardless of size. Building planned-out operational workflows will help the company scale up without hiccups.
1. Plan now, benefit later
Planning and strategizing are a must for any good business. The more time an owner-operator spends planning, the more prepared the business is for the market. Planning may not be fun or come easily to you, but the benefits far outweigh any resulting fiasco.
You are better prepared for crisis or volatility in the market, and you are more equipped to take advantage of opportunities.
2. Better efficiency and profitability
When you start off with the right foundation, you have a faster and more streamlined operation with none of the extras. This will save you time, resources, and money which also equals a profitable enterprise.
3. Awareness of the risk
Although risks are common for any business, we do not have to let them impact the business. Starting strong is a great way to do that. Your business becomes more compliant and can avoid issues with regulatory bodies. You will also have a better chance of mitigating any risks that may come up.
Strategies for building a strong foundation
Starting out strong is important, but sometimes the ‘how’ is not readily apparent. In this section, we will work on changing that. There are strategies that can help you make a strong start:
1. Start with the ABCs
Starting strong requires getting the basics right. There are a few things you may need to tick off before you start -- like registration, equipment, insurance, and invoicing and factoring. You don’t have to go at it alone though. At TrueNorth, we can help with these.
Before starting out, there are certain concepts you want to familiarize yourself with. Some of them are fixed cost, variable cost, and breakeven points. As an owner-operator, you want a clear vision for your business, which is usually a great way to avoid playing guessing games in the business.
2. Build up network and reputation
Your reputation in the trucking industry is everything. It is similar to what marketers call branding. Customers use trucks to transport goods worth hundreds of thousands of dollars. They want to know that they can entrust these goods to your care and you can get them to their destination without much hassle.
Consistency and reputation mean a lot in the logistics and supply chain industry, which makes shippers weary of new owner-operators. A small delay can negatively impact their business operations, impacting profitability, so they can get picky about the truckers they use and how they use them.
However, this can also work in your favor because they won’t hesitate to sing your praise and refer you to other businesses if you can deliver. Lean on your experience as a truck driver, be respectful, and act like a professional even in stressful situations. Take networking seriously, as it allows you to meet prospective customers, link up with other businesses in the trucking industry, and gain exposure to industry best practices.
3. Stay up to date with industry news and trends
The trucking industry changes rapidly, and new technology solutions have made huge strides in a few short years. Owner-operators can change their operations much faster than large fleets can, which you can use to your advantage. Stay on top of emerging technologies and products for a leg up against the big incumbents and other small carriers who prefer to do things the old-school way.
Leveraging information and technology to build a strong foundation
Technology and information work hand in hand, and they are your best friends when setting up an owner-operator trucking business. Technology provides you with all the information and helps you operate the technology to your advantage.
TrueNorth brings you technology that helps build a solid foundation in your owner-operator business, and gives you all the information you need to stay one step ahead of the competition.
On the TrueNorth platform, you will get access to solutions like load management, financial insights(including fixed and variable costs), document management, and access to factoring companies. It is the perfect mix of both worlds and helps you start off with the right strategy, giving you a better chance than 90% of the competition. Click here to get started.