Waynes World - January 2009
NEW COMPREHENSIVE SURVIVAL COURSE
FOR TRUCKERS THAT TEACHES...
HOW TO HAVE A SOLID
TRUCKING BUSINESS
by Wayne Schooling
A trucking career isn’t for everyone. Trucking can be a very hard job to do and, lately, equally as stressful. All anyone has to do is read the headlines: “Half-Million More Lose Jobs.” Some analysts predict 3 million more jobs will be lost between now and the spring of 2010. Right now the economy is in a free fall. Starting a new trucking company (or saving the one you have) will require a good business plan.
Too many people get into the trucking business without any kind of plan. To give you an example, I recently got a call from a man in Arkansas who wanted to get into a drug program. While gathering all of the details, to my amazement, I found out that he hadn’t filed for his authority yet because he needed insurance. And he couldn’t get his insurance because he hadn’t brought a truck yet. And then he wanted to know if he could get financing through us. Believe me, this happens more times than I would like to admit. So, it was no surprise when I found out that about 40,000 small motor carriers go out of business each year.
If you can remember your high school course on economics regarding supply and demand, you will have to agree that the trucking industry is a good one to get into because everything you and I have comes by truck, in one way or another, along the supply line. As the population grows, it creates the demand for goods. So you say to yourself, I’ll simply start a trucking company to help fill that demand and bingo I can make some good money. Although this logic is correct, you still need to have a solid business plan to succeed. When deciding whether or not to get into the trucking industry, you should really think about it. Truck driving is not just a job – it is a profession and a lifestyle.
To illustrate what I mean about having a plan, here are a couple of companies that started with a solid plan. Swift Transportation in Phoenix, AZ started with one truck in 1966 and now has 17,900 trucks and nearly $3.2 billion in revenue. Their plan was to target retail and department store merchandise for big stores like Wal-Mart, Target, Lowe’s and others. Over the years, these stores have done very well and Swift has prospered right along with them. Another example is Knight Transportation, also based in Phoenix, AZ. Started in 1990 by four cousins who had the ambition to become one of the best truckload companies in the industry, Knight was always been a company focused on safe, sensible growth. Today, Knight owns and operates 3,600 tractors and more than 8,500 trailers from 27 Service Centers nationwide. This company was built on financial strength and a commitment to working together with their customers to achieve mutual goals.
The point is, you cannot just go out and buy a truck, get insurance and an authority, and then say, “What do I do now?” I know that a lot has been written on this subject and you can find it all over the internet, but no one to my knowledge has put together a total, comprehensive survival guide for new entrants into the trucking industry except for one company in Tennessee. Unfortunately, they only put on their program once a month. On top of that, you have to fly to Tennessee and pay over $250 for the one-day course. This is fine if you live in or near Tennessee, but if you live anywhere else in the United States the plane fare, hotel room, food and rental car could quickly add up to a $1,000. Well, now you have another option.
By the time this article comes out, NTA will have a comprehensive survival course for new entrants getting started in trucking. This material would also benefit those people who already have a trucking company and would like to manage it better (or not lose it). You will be able to get the complete package in hardcopy form or be able to download it from the Internet (www.ntassoc.com). This survival guide is designed to go beyond the FMCSA compliance regulations and delve deeper into all of the facets and challenges you will be face as a new entrant company. I have always said that if you put ten brown horses in a row and then put a white one in the middle, the white one will stand out from the rest. So, the question is, how is your new startup company going to stand out from all the rest out there? What can your company offer that the others will not? Well, this guide will help you with that, too.
The study materials will include a real trucking company business plan so that you can apply for a government-funded loan (SBA loan) instead of a conventional loan. The interest rate for a government-funded loan is the current rate plus 1.75 to 6.5 points (depending on your credit history). Even if your credit history is not perfect, you have a much better chance to get approved for an SBA loan than a conventional one, which may have up to 4% higher rates. After all, the government is bailing out big business – why not get some of it for yourself and create your own business.
Some other topics the course will cover include accounting, cash flow, contracts, cost-per-mile, financing, log auditing and data management. Additional subjects will include drug and alcohol testing, finding and keeping good drivers, fuel management and growth management, as well as legal issues, lane analysis, truck registration and licensing, safety compliance, SBA loans, technology, tractor-trailer maintenance and commercial truck insurance, just to name a few. Over the next few months, I will be reviewing many of these topics in this column, so stay tuned.
~ NTA remains a name you can trust. Our website (www.ntassoc.com) is your official U.S. DOT Internet Training Site and we are administrators of a Nationally Accredited Drug and Alcohol Program. If you have any questions, call me at (562) 279-0557 or send me an e-mail to wayne@ntassoc.com. Until next month, “Drive Safe – Drive Smart!”