For the trucking industry, this has been a harsh year. With the mortgage and housing collapse, the price of fuel increasing at unprecedented rates, and now Wall Street coming apart at the seams, we’re all afraid to travel around the next corner. It seems as one area starts to stabilize, another vital one begins to unravel.

In this unstable economic environment, we can no longer use the Christopher Columbus method of business management: Instead, we’ve got to know where we’re going; when we’ll get there, where we are when we arrive, and when we return, we need to know where we’ve been.

The idea that we can take the ‘fair wind’ approach to running a trucking business will no longer work. Just like you lay out a travel plan for a load by selecting the most efficient route possible (even though it may not be the shortest), knowing where the fuel stops and rest stops will occur and coordinating them to maximize the available hours of service, planning the schedule so to miss the rush hours of large urban areas, etc. We must now take that same care in how we set up our business, plan all our loads, and execute our business plan.

To develop a successful business model you have to know where you are, what route you’re going to take to get to where you’re going, and, equally important, where you’re going to end up. This is accomplished by creating a business plan. By creating a business plan, you develop a vision for your future. By reviewing that plan at regular intervals (monthly during difficult times, quarterly in normal times) you will know where you’re headed at all times and be prepared to make adjustments when necessary.

Create a vision of the future by answering these questions:

1. What is your main objective? What is the ultimate accomplishment you hope to achieve for your trucking company?
2. What does the future look like in the segment of trucking in which you plan to operate?
3. How stiff is the competition?
4. What’s your idea to beat the competition? (If your idea is a lower price, stop here and save yourself a lot of aggravation.)
5. Do you have funds to sustain yourself and your family for six months to a year while you build your business?
6. Have you included a salary or draw in your expenses, which covers you and your family’s needs?
7. What are the projections for expenses over the next year? Two years? Three years? Five years?
8. What are the financial projections for revenue for the same periods? Are they realistic?
9. Will the business revenue exceed your expenses? When?
10. Do you know your daily, weekly and monthly Break-Even Points?
11. Do you know how much money is required for your company to grow?
12. Have you set your hauling rates based upon your Break-Even Point, plus the money needed to grow?
13. What are the worst-case scenarios? And what solutions do you have for them?
14. Are you willing to put forth the effort to create the necessary solutions?
15. Finally, have you dug deep enough in your research (and been honest enough with yourself) that your expectations and projections are based in reality?

Once you have a good idea of where you are, and where you want to go, it’s time to lay out your route. Much like you’d take a road atlas and look at possible highways to reach your destination, you do the same with planning your route to financial success in the operation of your trucking company.

Just as in planning the different roads you’d traverse getting a load from origin to destination, you need to plan each step required to reach the plateau of where you want your trucking company to be each year. To pick the correct directions when driving to a destination, the most efficient and quickest route usually isn’t the shortest, most direct route. The same holds true when navigating up and down the business highway to reach your financial goals and grow your business. You can’t take that eighteen-wheeler straight up the mountain; you have to climb it one switch-back turn at a time.

Regardless of whether you are an Owner/Operator with one tractor, or a small motor carrier with a fleet of tractor/trailers, you must develop a solid business plan to succeed. By following these steps, you will leave all the Christopher Columbus truckers in your wake on your way to success.

About Timothy D. Brady

• A 20 + year award winning trucking veteran.
• Trucking Expert on Sirius Road Dog Trucking Radio.
• Trucking Expert on Sirius Road Dog Trucking Radio.
• Heard in podcasts on AmericanRigRadio.com.
• Author of best-selling trucking business books and columnist for top trucking industry publications.
• Join Brady in the Trucking Business Community at TruckersU.com. It’s where you can achieve business and financial success, by becoming a part of the solution.

Contact him at tbrady@writeuptheroad.com or call (731) 749-8567.