By Karen E. Klein Q: My husband and I own one commercial truck and make deliveries for freight companies. These firms split delivery fees 60-40 with us. The 40% we get has to cover all our expenses, including maintenance, insurance, oil and gas, tolls, and salary. We'd like to expand our business, buy more trucks, and hire employees. How can we get a direct contract for delivery service?
-- R.C., North Bergen, N.J.
A: Like all small-business owners, you and your husband need to brainstorm about what value-added services you offer that will differentiate your company from other small outfits as well from your larger competitors. Can you provide more personalized service? Quicker deliveries? Lower-cost guarantees? Increased safety? These advantages will become your selling points as you grow.
That said, consider that now is a tough time to break into the independent trucking business. With gasoline prices skyrocketing, even the large, established hauling corporations are struggling to stay profitable. Think realistically about what you can afford and where you must set prices to make a go of your expansion. Write up a business plan that details all this information. You can find downloadable templates by searching online. One good one: the Small Business Administration's free guideline.
SELL YOURSELF. If you decide that you can sustain a business working directly for companies that need pickups and deliveries, you need to offer your services in person, bypassing the freight forwarders you currently contract with, says Gary Green, manager of member assistance for the Owner-Operator Independent Drivers Assn. (OOIDA), an industry group based in Grain Valley, Mo. "What you're doing now is too scattered -- you need to look for a niche market to serve," he says.
Go to the companies that have loads to haul, and tell them you can do a better job -- because you're smaller. "Everybody has trucks," Green says. "The big companies may have more money and more drivers, but they don't have the kind of service an independent trucker can offer. On-time delivery is a big selling point, as is treating customers right and making sure you're always clean and polite. Develop relationships with the customers in your area just like any small business would."
You may want to position your company as the transportation solution for other small businesses. But don't rule out serving big corporations also. "If you get a couple of big boys on your schedule, like Purina, and they like your attitude and the way you do business, you'll get all the delivery loads you ever wanted," Green says. Keeping a varied client mix helps ensure your company's longevity -- so you won't go out of business when one of your clients cuts its shipments or shuts down entirely.
GET CONNECTED. The size and class of your truck may limit clientele and contents. And you'll need to get your own hauling authority for the states in which you'll drive. Make sure to update your licenses, insurance policies, and other business documents before you start soliciting customers directly, Green says.
Joining an industry association like the OOIDA, which has an annual membership fee of $45, can also help. It will give you access to the group's publications and answer your questions about the business aspects of trucking. (You can request advice via OOIDA's Web site, or call on its member services department directly.)
"I can give background information to members or find answers to their road-transport questions directly -- that's my job," Green says. The group's membership includes 121,000 independent truckers who operate an average of 1.7 trucks each. Another industry organization worth checking out: the American Trucking Assn., a lobbying group based in Alexandria, Va.
Have a question about your business? Ask our small-business experts. Send us an e-mail at Smart Answers, or write to Smart Answers, BW Online, 45th Floor, 1221 Avenue of the Americas, New York, N.Y. 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally. Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues