The start of the new year often feels like a blank slate, inspiring folks to start over and make better choices. It’s like a second chance at improving your quality of life by starting or maintaining healthy and productive habits. While resolutions to lose weight, exercise more, or begin a new hobby are typical, you can also make professional resolutions. For example, find ways to mitigate risk for your business or improve profitability. Take advantage of the new year’s motivation to implement change to elevate your trucking business.
To help you get started, we have 12 new year resolution suggestions that are perfect for truck drivers & owner operators. Think about your current operations and any gaps you’d like to work on, then select 1 or 2 new year’s resolutions that can make the biggest impact on your success in 2023.
1. Begin tracking your cost-per-mile
Margins in the trucking industry are tight and monitoring your cost-per-mile (CPM) provides data that can help you remain profitable. For example, knowing your CPM enables you to negotiate a fair and profitable rate-per-mile with shippers and brokers. Knowing your CPM can help you estimate the profits for every haul, ensuring your business stays in the black. In 2023, start using a cost-per-mile calculator to ensure you include all your fixed and variable costs in your calculations to produce an accurate cost-per-mile rate unique to your trucking company.
2. Develop a financial plan to prevent a cash crisis
Economic predictions for 2023 indicate another year of volatility. Cash flow management will remain difficult – many trucking companies will struggle to keep paying expenses on time. It is advisable to mitigate this risk by developing a financial plan to keep your cash flow healthy. Consult with your accountant or business coach for help. A more direct path to effective cash flow management is to reach out to a freight factoring company to access working capital quickly and maintain dependable cash flow.
3. Start calculating your profit and loss before you haul
To make good money in trucking, you must keep your truck(s) moving with paying freight. Making quick commitments to haul cargo may win you the load, but will it be profitable? This year, consider using a profit and loss calculator before accepting a load to ensure it will contribute positively to your bottom line – not lose money. This simple practice will help eliminate hauling loads that need to pay more to cover all operational costs, including the expense of driving the empty miles associated with the haul.
4. Build a backhaul strategy
A backhaul strategy helps keep your truck(s) full of paying freight on your return route. Empty miles increase your cost-per-mile and cut into your profitability. Operators who focus on filling the backhaul often do a much better job maximizing their trucking company’s profitability.
5. Develop strategies to save on the cost of fuel
Fuel is the most significant operating expense in the trucking industry. Any savings on the cost of diesel or improvements to fuel efficiency will pay big dividends! Start the new year right by finding a fuel discount program that can provide you with huge savings every month. Plus, to improve fuel efficiency, maintain a lower average highway speed, and investigate the many technological solutions designed to help reduce fuel consumption.
6. Step up your networking
Building and maintaining a solid network of shippers and brokers is critical to having a reliable stream of cargo to haul. Strong industry connections can help improve your chances of being hired to transport a load. After all, keeping your truck full and on the road increases profitability. While cold-calling shippers and brokers to get on their list of service providers may sound nerve-wracking, the more you do it, the easier it becomes. Learn more ways to network to build load volume and help grow your trucking business.
7. Manage credit risk carefully before you haul
Every time you take on a load and issue an invoice, you extend credit to the shipper or broker and run the risk of delayed or nonpayment. You can mitigate the potential threat to your cash flow by managing credit risk. Use a simple credit search tool to verify a customer’s ability to pay before you haul. This free service includes access to a database of active companies in the shipping industry, providing the credit information you need to make an informed decision.
8. Select a quality load board and monitor closely for loads and freight rate trends
Load boards are an excellent resource for finding cargo and operating an effective backhaul strategy. However, not all load boards are created equal. Use a quality load board, which includes robust filters, real-time posts, and credit checks to help truckers make informed decisions about which loads to bid for and pick up. A high-quality load board can help keep your truck full and keep you updated with freight rate trends.
9. Up your data game with a dedicated accounting software program
Independent owner-operators and trucking companies have unique bookkeeping needs. Look for accounting software that can manage industry-specific operations like mileage tracking, fuel tax agreements, flexible billing, and traditional accounting functions. In addition to investing in the right software, you must enter your financial data regularly to keep your records up to date and avoid a troublesome backlog of administrative work.
10. Start conducting regular month-end accounting reviews
Month-end reviews are an essential part of monitoring the profitability of your business – whether you’re an independent owner-operator or a small fleet owner. Take the time to ensure all the transactions have been recorded and verified at the end of each month. Then produce reports to monitor your company’s financial performance and determine if you made or lost money that month. Keeping your records up to date will also ready you for tax filings or audits.
11. Protect your trucking company from double brokering
Involvement in a double broker scheme can devastate your business – whether your involvement is intentional, or your trucking company is a victim of the crime. Double brokering exposes you to multiple risks, from nonpayment to reputational damage and the possibility of losing your FMCSA authority to operate. Take steps to protect your trucking company from double brokering. For example, you can check the freight broker’s good standing by checking their credit score and verifying contact details before scheduling a load. Clear communications with the shipper or broker before, during, and after the haul is good business and will help lower your risk.
to improve your credit score
12. Work to improve your credit score
Your business may need more cash reserves to support growth. Maintaining a solid credit score will help you get approved for any necessary leases or loans. Working with a freight factoring company can help you boost your credit score by reducing your risk of cash shortages, providing access to working capital, ensuring funds for timely debt payments, and elevating credibility.
Top Tips for Keeping New Year Resolutions
While New Year resolutions provide an initial boost of dopamine-fueled focus and dedication, around 91% of resolutions fail. So, what can you do to stay motivated once the initial rush wears off?
First, set specific actions. For example, if you resolve to have month-end accounting reviews, your action could be to schedule a meeting on the last Thursday of every month to review and update all financial records. By including a day, time, and specific tasks to complete, you know exactly what you need to do.
Another tactic may be to involve someone else in the actions. In the case of the above example, working with your accountant or bookkeeper to review month-end results creates a degree of accountability. Knowing that someone is expecting you to do something with them can prevent you from putting off the task.
Similarly, having a timeline for your resolution, like “90 minutes on the last Thursday of the month,” enables you to schedule time in advance and ensure you have enough time to complete the task.
And finally, make sure your resolution is relevant. The suggested resolutions outlined in this article apply to the trucking industry in general. Choose a resolution that will create a noticeable difference for your business. Whether you’re an independent owner-operator or a small fleet owner, we hope the suggestions above inspire you to commit to positive change in 2023.
eCapital’s roots are deeply grounded in the trucking industry. With over 25 years of experience in transportation financing, our organization is based on industry knowledge. Building relationships based on integrity and trust, we deliver cash flow you can count on, every day, every month, and every year we remain partners in your success. To support that success, eCapital provides innovative, forward-thinking solutions to even the most complex situations. Adapting resources to respond to your company’s working capital needs, our team of industry experts is thorough, expedient, and extremely easy to get along with!
To learn more about how our team of industry experts can help your trucking business elevate to the next level, visit eCapital.com