trucking business plan

trucking business plan

Trucking Business Plan

1. Introduction

Welcome to our business plan guide. In this article, we will be sharing with you all the necessary information to help you with the essentials you need to know in creating an effective and exceptional trucking business plan. No matter how professional or novice you are in creating a trucking business plan, it is highly recommended to read this article thoroughly and take notes while reading to greatly improve the quality and nearly assure the chances of being a success. A trucking business plan is of no worth if you don’t know what the procedures necessary to make things happen. And without knowing what needs to be done, the likelihood of making a mistake which might affect the business and wasting an unrecoverable amount of time is very high. A well-structured business plan will give a detailed picture of what needs to be done, whether it is a marketing plan, sales plan, logistic plan, or any type of plan which involves several tasks to be done. If this were to happen, it would be very difficult and stressful once you come across a problem and not know the solutions because you would then realize that a clear strategy plan for the matter was never conducted. This will cause bigger implications in the future and may result in the first and final business transaction made. A business plan will also be your blueprint on how to run your business for the future. Without a plan, you will feel like you are not making any progress, which will only make you frustrated and will cause you to make more irrational decisions.

2. Market Analysis

Trucking industry is a massive $200 billion industry in the United States alone and there is plenty of market opportunity for new players. “The US trucking industry…revenue will increase to over $182 billion by 2013, a 67 percent increase from the revenue at the recent low in 2009.” (Trucking Info, 2010) Although our business will be solely within the province of Ontario, there is no shortage of market demand for trucking services, and all signs are pointing to an increased demand in the future. With the recent economic uncertainty and decline, there has been some movement in the market: many small owner-operators are leaving the industry, the number of company failures has increased, and there is slower growth in certain sectors of the industry. That being said, the Ontario trucking industry has proven to be relatively sustainable during economic turbulence and able to adjust to changes in the North American market, and there are potential opportunities that may arise from any shifts in the industry in the next few years. The industry we have an interest in is general transport. According to a recent study by the Ontario government, general freight is the most common commodity shipped within Ontario and the number of tons shipped is expected to increase over the next few years. This is for the most part recession-resistant freight, and there are a high number of small manufacturers and distributors producing goods who rely on trucking services but do not have the capital to maintain private fleets. This means there are plenty of potential customers. The same study indicates that the vast majority of freight within Ontario is moved via U.S. border, which suggests that regardless of any changes to the North American Free Trade Agreement, there will still be much freight to move both into and out of the province. This too represents further market potential.

3. Business Operations

Business operations are an important part of the trucking business plan. This is a subsection that describes what we do and how we do it. It is critical to have a fundamental understanding of the industry as well as making sure that there is a clear and cohesive plan about how goods are moved from location to location. Any business with a good plan will stay in business. Businesses that have a vague idea about what they are doing are the first to fail. But in an industry such as trucking, failure could mean devastating financial loss. With costs of trucks and maintenance reaching well into the six-digit range, not having a clear operational plan could put the business in debt. It is for this reason that we are able to describe a specific method to how goods will be moved from location to location. Because some facets of the trucking industry tend to specialize in certain types of trucking, there are various ways in which goods can be moved, and each requires a different setup and plan. This will be followed by a comprehensive analysis of the trucking industry as it pertains to our specific market. All of this will lead us to develop a model to show how we expect to be able to move goods, enforce our position in the industry, and how we can bring in profits.

4. Marketing and Sales Strategy

The most efficient form of advertising for this customer will be networking and a good word-of-mouth referral. Business owners typically do business with others who are of a similar mindset and often have a similar orientation. This is why a target market customer will make a referral to the service provider if the customer feels the service to be a good match. We will do quality work on each job to maximize the referral of business to new customers. Providing an incentive to current customers for every referral can also be an effective way to build a network of referral business.

Advertising will be a very important part of gaining customers in the targeted market. Advertising will be used to let potential customers know how we are different from our competitors and why we will be more beneficial. Once the customer has a firm understanding of our service and its benefits, we will need to close the sale by identifying a customer need and matching the service to that need. This is why understanding the needs of the customer is so important.

Thus, we intend to segment the market into small to medium-sized businesses and into home office businesses. The size of the target market will support a growing business activity level as it supports a business who provides a transportation service. Once these entities have been identified, we intend to develop a customized service for these businesses. The markets identified specifically have special needs that are not being properly addressed. These needs are largely unnoticed in the larger market, and the service providers are not well-suited to provide these services to the business target. We are going to find out exactly what these needs are and how they can best be addressed. This information will be used to formulate an effective marketing campaign and sales strategy. It is also used to customize our service to the exact needs of our customers.

5. Financial Projections

As a rule of thumb, if you’re not comfortable with the profit that is estimated, lowball the income and highball the expense. These conservative projections will ensure that the success comes as planned. When generating revenue, always be wary of the accounts receivable. It is not uncommon for a profitable company to fail due to a lack of cash flow, and unrealistic credit terms are a primary reason for this. The cash flow statement is invaluable. If projections show a net cash flow is negative, changes can be made before the problem becomes a disaster. It is arguable that these projections are the most useful piece of the business plan. After the company is operational, the analysis of these projections should occur monthly. This will identify any deviations from the original plan, and provide an understanding of the reasons for such changes.

– Profit and Loss Statement – Cash flow statement – Break-even calculations – Year-end balance sheet – Projected Financial Ratios – Fixed and variable expense – Cost of goods sold – Truck Utilization

Here, you will develop financial projections for your company. Projections should cover a two-year period. Although lenders may want to see five-year projections, it is wise to start your business on monthly projections for the first year, then switch to annual projections. Planning for opening day is only as far as most trucking companies have previously thought. Planning for future development is imperative, and solid projections can provide confidence and foresight. Develop a spreadsheet that computes the following (you may want to use the sample income statement provided in the appendices as a guideline):