by Timothy Brady
Being in the game to win, what are the goals you need to set? Do you have the facts and figures which support what you’re doing according to your plan? This is how you determine if it’s working. Should you stay the course? If it’s not working, to what extent do you adjust the plan? Do you scrap the portion that isn’t achieving your goals, or make small changes? How do you know the best course of action?
The big mistake:
One area in which many micro-carriers make their biggest mistake is failing to evaluate what they’re doing. Is it actually moving the carrier forward toward its goals? In over 20 years, in the thousands of articles, in a multitude of trucking publications, I’ve discussed several different evaluations, truckers, and carriers need to conduct to monitor their businesses. You need a predetermined set of goals for your operation to attain. Then following up to see if you are on track to achieving those goals.
Are you playing in the right game against the correct opponents?
Think of trucking much like a basketball game. The first thing you need to make sure of is that you’re playing in the correct arena with the right tools. In basketball, that means a regulation court and regulation basketball and of course the goals at either end of the court. Trying to play the game with only the ball and no goals would be pointless; same with having the goals and no ball. So it is in trucking. Trying to run a flatbed operation with a box trailer would be as pointless as the basketball descriptions above. Of course, it would be nice if it was all as simple as these examples. But as reality would have it, it’s not quite that easy.
What are the goals you need to set?
- Have a definitive plan of action that includes a target revenue goal for each month and quarter. This is calculated by knowing your costs and how much money you’ll need to sustain and grow your operation.
- Have a defined freight lane for each truck you operate. This entails knowing all the freight that you can haul that travels within that lane, and who the shippers, receivers or brokers are through which the freight is scheduled. Who are your direct competitors for this freight? What percentage of this freight are you capable of hauling now, and how will you expand to gain a greater market share within this lane?
- Have a program in place that determines if a tractor or trailer has outlived its usefulness and is starting that profit-drain from your operation, so you can have the funds to replace it when required.
- Have a maintenance program in place that keeps your equipment in top running condition, reduces on-the-road downtime, keeps the DOT out of your business and maintains the lowest CSA scores.
- Track the revenue and costs related to each customer for whom you haul freight. Make sure they’re paying you a rate that covers costs and moves you towards attaining your monthly, quarterly and annual revenue goals.
- Have a value goal, one which constantly and continually helps you to increase your value to each shipper, receiver, a broker who contracts with you for your freight. The same can be said about the value you provide your employees, drivers, contractors and anyone from the mechanic who maintains your equipment to any other vendor with which you do business. Remember value is always a two-way proposition.
Being in the Game to Win
Staying on top of your business by constantly monitoring and evaluating each aspect of the operation is what will keep you in the game and hitting net, instead of just dribbling down the court. It’ll keep you running in the green-lighted lanes of profit, instead of parked in the breakdown lot off the highway.
© 2020 Timothy D. Brady
The Introduction to Trucking Business
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