Make a Business Plan

Always make a business plan and write the plan yourself, from the first word to the last.

In the early 2000’s I received one of my most valuable business lessons. During a business meeting I had dressed in nice slacks, shirt and tie and was armed with several copies of my formal business plan anticipating to share it with all the individuals attending the meeting. There were a half dozen company representatives attending the meeting. All entered the conference room wearing jeans and casual shirts. They politely took the formal business plan I had prepared. Without even opening the front cover the CEO held up my formal business plan and said to me – “Joel I have learned that these mean nothing. I want to know that you know, what you are doing, what you need and that you know what to do with what you need.” The meeting was very successful and we did use the business plan. However if I had used a general business plan from the Internet that I had not written myself I would have been lost attempting to present it. I encourage everyone, always make a business plan yourself.

Just like going to an interview first impressions matter! Opening statements in a formal business plan are not an autobiography. They are to introduce your knowledge, research and plan to successfully own and operate a trucking business to anyone reading the business plan. No details or personal information (sports, politics, religion, likes, dislikes, opinions, etc.) should be included in an opening statement. Some exceptions may apply such as if you are planning to transport a sports broadcasting trailer your knowledge of sports venue locations and procedures would be significant.

Using your simple or rough draft business plan create an easy to read, professional income, expense and profit expectations report. Your lender will thoroughly dissect and evaluate this section of your formal business plan. Be prepared to answer his/her questions on the spot without hesitation and with confidence. In doing so you will be projecting to your lender everything you have in writing but with all the passion you can’t put on paper. This includes everything from your knowledge, experience, commitment, dedication, hard work ethic and never say die attitude. Since anything can be claimed on paper, what a lender hears in your voice, sees in your eyes and confirms with your body language means more than what is in your formal business plan.

Being prepared for setbacks or disasters (read my personal experience with my first truck in the “EVERYTHING ELSE” category) can be the difference between succeeding or failing. Surprisingly to me this is the one part of planning that the majority of all new truck owners overlook. Have contingency plans! The one thing that is certain is that everyone needs a contingency plan sooner or later. So including it in your formal business plan shows the lender you know and are prepared for the adversity that is part of trucking. There are many ways to establish a financial contingency plan and they are easier than you may expect. Above the borrowed amount for your equipment you can requested a line of credit as part of your formal business plan. That is my preferred plan as it does not include placing any additional assets at risk. However most lenders will require that the line of credit is secured against the truck (if the line of credit does not exceed its value less the borrowed amount), real estate, savings account, personal asset or other personal property. Other options may include intentions to borrow from an IRA, 401K, personal savings account or other such investments.

Once you are able to agree to terms with a willing lender it is time to find your equipment. Above all shop wise. Do not buy the first truck and trailer you see. Have several to compare and choose from before making your purchase.

Choosing insurance has become one of the easiest steps in starting a trucking business. Agents call insurance brokers and insurance brokers get quotes from a multitude of insurance companies such as National Casualty, Great West, Carolina Casualty, Northland and many more. So no matter which insurance agent you choose in most cases they all are receiving the same quotes back from the insurance broker. The one type of insurance I discourage truck owners from using is insurance provided by national trucking organizations or associations. The quotes I have received from these organizations or associations has been dramatically higher. In fact almost double in most cases! That said, you should still ask for a quote if you belong to one of these groups because there is always the possibility that, for you, they are competitive.