Haulage business is one of the fastest growing businesses in Africa and I strongly recommend this business for anyone who has up to N4 million to invest. This is a business that is guaranteed to earn you nothing less than N400, 000 monthly, exclusive of expenses.
A lot of people make way more than this monthly. Recently, I read a write-up by someone in the business who claims that he makes nothing less than N100, 000 monthly just from haulage business. However, to make any money at all, you must be armed with some tips for success.
The first tip that I would give you is that you should see yourself as more than a contractor to your clients. You should see yourself as a partner who is interested in their success and therefore, you must always strive to add value to their business. A lot of haulage contractors handle their client’s cargo nonchalantly causing delays and losses for them.
If you train yourself and your employees to believe that you are partners to your clients and you are interested in their success, it would show in the quality of services that you offer them and you would be able to retain and get more clients. Ten tips which would help you manage a haulage business successfully include-:
Top 10 Tips for Running a Trucking Business Successfully
1. Avoid Debts-: Don’t start this business with too many debts as it may ruin your business at the end of the day. Haulage business is capital intensive and because of this, a lot of people run into debts in order to raise capital for the business. If you must borrow funds to start this business, ensure that you have a guaranteed contract at hand and you are sure that you can start working immediately to repay your debts.
Don’t just go to the bank to obtain loans without detailed planning and feasibility studies. Also, if you are borrowing funds, you should have a proper financial forecast done. Your forecast should include the interests that you would pay on the loans acquired and you must be able to ascertain that you can earn enough to pay off your loan and the interests within the loan term. I also always advise people to consider hire purchase as it is more flexible than bank loans. You should also consider long term saving for the business as it is saver than any type of credit financing at all.
2. Manage and Monitor your business closely-: There are too many people out to swindle you in this business. From the unfaithful driver to the unscrupulous mechanics and the ‘task force’ agents who stand by the road to sell tickets. Therefore, you have to keep close watch on this business and closely monitor what is happening.
First, you must have a detailed business plan which would be your first control mechanism. Next, you should employ strict budgeting techniques; you should be able to forecast your income and expenses and build a monthly budget for your business which you would adhere to strictly. Your business and financial management skills should also be in full force if you must make money in this business.
3. Advertise your business-: You should not fail to leave out some of your earnings for advertising your business. You can always find cost-effective ways to advertise and increase awareness for your business.
4. Join Associations and Trade unions-: You can also increase your chances of success in this business by joining trade unions and networking with other people in the business. You would be able to learn a lot from people who have been in the business before you and understand how they handled some of the challenges you may be facing. Also, you may find that some of them have jobs which they cannot handle alone and would need other haulage contractors to partner with them.
5. Install security and Tracking Features in Your vehicles-: One major problem that haulage contractors face is not having trustworthy drivers. Installing security features in your vehicles can help you check your drivers’ excesses and reduce recklessness. With the right security and tracking device you can monitor fuel usage, prevent theft, know the routes taken and where a driver is at a particular time, monitor speed limits and prevent vehicle theft.
6. Employ Professional Drivers-: Another tip for success is that you should employ drivers that are properly trained and are licensed to drive large vehicles. Also, you shouldn’t place your drivers on salary but on a per-trip basis so that the amount they earn depends on how serious they are at their jobs.
7. Motivate your drivers-: The drivers are very crucial to your success in this business. Drivers can make or mar you and you have to be careful with the way you treat your drivers. A little bit of motivation here and there would definitely go a long way. Always reward them for good performance like accident free records, non-violation of traffic rules and adhering to company rules and regulations. On the other hand, you should not hesitate to punish bad behavior and recklessness.
8. Buy Insurance-: This business though profitable, is highly risky. There are risks of fire, theft and damage. A lot of things can go wrong so if you must maintain your peace and confidence while running this business, you must be covered by your insurance company.
9. Buy more Vehicles-: First, you must purchase good vehicles and then, you must continue to increase the number of vehicles in your fleet as your business grows. You can always set aside some money from your profits on a regular basis and in no time, you would have more vehicles in your fleet.
10. Keep an eye on your costs-: Lastly, you must keep an eye on your expenses. You must know how much each job brings in. This means that for each trip, you must know how much you have left after expenses. This is known as activity-based costing in accounting.