Looking to drive growth in your transport company? You can compete with the big fish if you make some tough decisions.
Growing your fleet is a high-risk, high-reward situation. Ensure careful evaluation of all the different scenarios before jumping in with both feet. “Fleet managers are constantly under pressure to bring down costs, even as operations grow, so they don’t need to be reminded of the importance of increasing efficiency in fleet operations,” says David Molapo, Head of Standard Bank Fleet Management
As the owner of a small trucking business, you know larger fleets are tough to compete with, but your growth is guaranteed with the way business has been going lately. More trucks means you can offer more aggressive pricing, hire drivers more quickly, get better discounts from suppliers. A larger fleet also means faster delivery, so what steps are you taking to make that happen?
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Creating growth is not based on luck, says speaker and business coach Timothy Brady. “Growing a trucking company requires dedication and leaps of faith, but most of all it requires a solid business plan. This plan looks at the company's potential, projects its revenue needs (over the next 10 years), and then determines where growth plateaus will occur, thus being prepared with both cash and assets as each plateau is reached”
1. Choose quality over quantity
A few shiny new trucks may seem like the first logical growth step, but while additions will help you in your growth plan, they don’t have to necessarily be new. The moment you drive the new truck off the lot, it will lose up to 40% of its initial value, “The growth in demand for both heavy and medium commercial vehicles has put new truck dealers under pressure,” says Riaan van Wyk, Sales Executive, Volvo Used Truck and Bus Centre.
“There are long waiting lists and with new contracts being signed, operators can't afford to wait several months for new stock to arrive from abroad and now readily consider buying a quality used truck in order to meet service level agreements.”
This isn’t to say you should be running a fleet full of second-hand vehicles, but you ought to keep in mind the purpose of your growth isn’t to spend more just to make more.
2. Combat staffing challenges
A big issue facing all fleets – big and small – is the very real shortage of dependable drivers and your current size may not allow a bigger fleet’s pay structure. Consider other ways to make a job attractive, like more weekends off or incentive plans. These can be just enough to keep a good driver in your stable long enough to enable growth.
“In addition to drivers, when you grow your fleet, you’ll also need to have someone at the home office to handle operational duties such as dispatch, accounting, or payroll,” advises Long. “A good office manager who can play the role of ‘Jacks Of All Trades’ might be the best route to take while getting started.”
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3. Stabilise your cash flow
Looking for the best options to grow your business faster? You’ll be glad you read this far, because here they are: Free up your cash flow and get faster access to your working capital.
If you’re a small to midsize fleet, immediate cash is often needed to fuel your trucks and pay your drivers. Having financial resources in reserve means that even if clients take up to 90 days to pay on an invoice, it won’t cripple your business.
Once your cash flow is steady, you can then look at areas of growth that will bring you even more business success.
DID YOU KNOW?
During the course of running and growing your business, you will need access to both short-term and long-term cash savings. This could come in handy for paying salaries, suppliers, or even saving for a future project. Standard Bank provides a range of flexible Savings and Investment solutions with competitive interest rates, to help you meet your business’ savings and investment needs.