How to Develop a Business Plan for Your New Trucking Company
Updated: Nov 24, 2020
When you decide that you want to become an owner operator the first thing you need to do is put a business plan in place. It is one of the most important parts of starting your own business because it sets everything out that you want to achieve with your business. A clear business plan shows how you plan to operate your trucking company and sets guidelines for you to stick with, to become successful.
If you fail to plan, you plan to fail! Continue reading this blog for some help when creating a business plan for your trucking company.
Express your plan for your company in this section. Explain what your company goals are and why your company will succeed in meeting them. State the services you offer, your vision for your company, the corporate structure you plan to use, and the roles and responsibilities within the company. Focus on your mission, products and services, performance highlights, and the future of your company.
Write about the history of your business. What makes your business unique from its competitors? What are some key facts about your company? This is a good place to outline the way you will run your company and why it will make you. Use this section as a bragging opportunity. Brag about your new clients, your fleet expansions, and all the other things that deserve bragging rights.
Don’t be afraid of the financial planning aspect of the business. Some simple preliminary budgeting can go a long way in helping you know how much money needs to be coming in and going out of your business. It is important to prepare some type of pro forma statement so that you can determine what kind of revenue will need to be created to generate positive cash flow within a specified time period. Cash is king in this business and while Porter can provide the working capital, it is imperative that you go through a process to determine what amounts of cash flow and revenue are needed to get the business into a healthy position to compete and, more importantly, GROW! The following three costs are a great outline to build your Pro Forma around:
Capital Costs – these are 1-time costs incurred to start the business, typically the equipment and everything used to operate the truck and trailer for securement
Operational Costs – you will have fixed and variable costs that you need to account for in the business. o Fixed costs will be things such as truck/trailer payments, insurance payments, etc. o Variable costs will be things such as fuel, maintenance, tires, fuel tax, etc.
Include all the services your new trucking company is going to offer, with details about pricing, materials, and the industries you will serve.
Emphasize how well you know your business. Express how you are going to capitalize on customer needs and industry trends and give an overview of the industry. Know how large the segment is that you want to run in, who your competitors are, and your market share. Also make sure to identify your target market. It is important to know the size, customer base, the geographical region, and what market will bring you the most profits to run in.
Sales and Marketing
This is the time to identify your strategy to gain market share. This part will include how you plan to find new customers or load sources and how you will promote your services. It is also important not to forget to discuss your sales plan and how you will implement it.
Finally, present financial goals and how your company plans to meet them. It is critical that you understand the line items that will go into the income statement and balance sheet of the company. It is okay to miss the mark on your estimates when looking at the individual numbers, but the biggest mistakes in any startup business are the line items that aren’t included in the initial plan. Take the time to go over every cost item that you think will be incurred through the business. The revenue items are simple. It is the expense side of the ledger that usually causes problems once companies begin operating, especially those that have not properly projected. Give predictions of your profits, cash flows, and sales forecast. Make sure to include projections over the next 5 or so years to show how much your business will grow.
Great things take time, especially when it comes to developing your business plan. In business, your initial plans will probably vary greatly in relations to your final destination. Good companies become great companies by adapting to the market, using their comparative advantages and positioning themselves with customers that align with similar characteristics and cultures. Be patient and don't rush things to avoid making big mistakes when starting your own trucking company. Once your plan is in place, you're almost ready to make the next move to decide what type of business entity you want to become!
Stay tuned for the next blog of the series, Sole Proprietorship or LLC for an Owner Operator? to complete the next steps in starting your own trucking company.