Trucking companies are in high demand, as there is always a need to move goods around the country. Yet many trucking businesses fail because they try to be all things to all people, and end up growing in a haphazard and unsustainable way.
Business Planning 101
A written business plan will keep you on track by providing a road map for sustained, organized growth. In addition, trucking businesses are expensive to start, requiring you to navigate a minefield of permits and licenses in addition to acquiring one or more trucks. Outside investors and lenders look to the business plan to determine whether your company is a solid financial risk.
The business plan provides a snapshot of your trucking company as it is today, and lays out its growth plan for the next three to five years. It explains your business goals, potential obstacles, and plans for reaching your goals. It is a living document that should be updated frequently as your trucking company grows and changes.
Your executive summary provides an introduction to your business plan, but it is normally the last section written. Financiers will decide whether to read more based on the contents of the first page, so make this section count. Provide a clear and concise description of your trucking company, a market analysis summary that shows a need for your services, and an explanation of your company’s unique qualifications to fulfill that need.
The company analysis describes your trucking business as it currently exists. Explain its founding, the current stage of business, and your legal structure. Talk about past milestones, such as securing key funding or forging an important partnership with a large manufacturer. Expound upon the unique qualifications mentioned in your executive summary, such as a fleet of refrigerated or oversized trucks.
Trucking companies are in high demand, and thousands of companies have risen to meet the need. Yet your industry analysis only needs to focus on your relative market, which is your segment of the trucking industry. Do you handle the business side and subcontract drivers with their own trucks? Do you provide the trucks and help drivers become licensed? What sorts of goods do you transport? Figure out where your trucking company fits into the market, and then research the trends and future projections that affect your niche. Create a solid plan for meeting any challenges that you discover.
Who are your customers? Are they major manufacturers who fill your trucks or small companies that use just part of your truck space? Do you distribute food products, hazardous materials, furniture, or something else? How do they decide which trucking company to use? Do they shop based on price, service, or something else? Narrow down your customer demographics as specifically as you can, identify those people’s unique needs, and develop a plan to fulfill those needs.
Your direct competitors are other trucking companies that meet the same need for the same target market as yours. Your indirect competitors are air transporters and similar companies that target your market, as well as trucking companies that target a different market. Name your direct competitors individually and talk about how your trucking company stands apart. Categorize your indirect competitors together and discuss them as a whole.
Your marketing plan should be based on the four P’s: Product, Price, Place, and Promotion. Product is your shipping service. Price is the amount you charge to transport each type of cargo, along with your reasoning for selecting those price points. Place includes your fleet storage and operations building, your online presence, and the locations you serve. Promotion describes your methods for attracting new customers. A fifth category, Customer retention, explains how you will build customer loyalty.
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Everyday short-term processes include all of the tasks involved in running your trucking company, from permitting and licensing through physically handling and distributing goods. Long-term processes are the ways in which you address your business goals, such as expanding to a new state or adding new specialized trucks to your fleet.
To demonstrate your trucking company’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. An advisory board can help fill in gaps, but you must show how the board will directly affect your company’s growth.
Writing a financial plan can be tough for trucking companies, which are subject not only to the whims of manufacturers, but also changing fuel costs. Yet this is the section most closely scrutinized by investors and lenders. Your financial plan must disclose all sources of outside funding, separate your revenue streams by relative importance and implementation timeline, and summarize your past and projected Cash Flow Statements, Balance Sheets, and Income Statements. You also need a strong exit strategy that demonstrates a clear understanding of the market and desire to capitalize on profitability.
Attach your full financial projections in the appendix, along with any supporting documents that prove your claims. For example, you might include letters from strategic manufacturing partners.
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