It might not be the most glamorous of industries, but the economy could not survive without logistics companies. These are the companies that move products from farm to table and they ensure that we have food on the shelves at the local grocery store, gas at the gas station, and just about everything else you can think of.
So, how can you cash in on one of the most important sectors of the modern economy? The good news is that you do not need a mountain of cash. The industry is known for its low barriers to entry and getting guaranteed semi truck financing is relatively straightforward.
However, with the easy of entry comes competition and as such those who wish to succeed in logistics need to have a keen eye for keeping costs down while providing world-class service. If not, they risk losing customers and ultimately their business.
If you don’t want this to happen to you, then here are some tips on how to build a business empire in logistics.
1. Service with a Smile
While you might think that logistics is just moving goods from point A to point B, and there is a fair bit of that, the reality is that it is a service industry. This means that the most successful operators need to have good people skills as they not only need to connect with the customer, but also the customer’s team, and in some cases the customer’s customer.
This might not be for everyone, but if you are starting with your delivery fleet you need to keep in mind that getting shipments to their destination on time is only part of the equation. Another part is how you interact with everyone along the chain. This includes the people you meet at the loading dock, to how you communicate that a shipment has been picked up and is in transit, and finally the people you meet when you drop off the delivery.
Your team might grow beyond one truck to a fleet of trucks and a dispatch office, and this means that you will also need to develop a good rapport with your team. Remember logistics is more than just moving goods around and if you want to build an empire in the industry, then you need to focus on delivering service with a smile.
2. Focus on Sales
Don’t assume that customers will come your way just because you have your first delivery truck. You will need to get out there and find business, or you will end up out of business. Fortunately, several apps have emerged to help those in the logistics industry find loads to carry, but don’t assume you are the only one bidding for shipment.
As such, you need to focus your efforts on sales. This includes developing relationships with customers and forwarders in your area in addition to registering on any apps or marketplaces.
Also, refine your process for answering RFQs – Request for Quotations. While these tender offers can be time-consuming getting one or two of these contracts can help grow your business significantly.
You can’t build a business empire without a strong pipeline of the customer, so focus on your sales efforts as this will help you to reach your goals.
3. Invest in Maintenance
While the inclination for some truck owners is to drive their trucks into the ground, this is not the right way to make money in the logistics game. Sure, if you are not carrying a load, then you aren’t earning revenue. But there is also a cost associated with every mile you drive – not only in gas and tires but also the wear and tear you are putting on your equipment.
As such, you need to invest in a solid maintenance plan for your equipment. If you are not adept at turning wrenches there is no need to worry as you can find a local mechanic who can help.
Another thing you can do is to set aside a maintenance reserve. This is a portion of your revenues that are earmarked for any major repairs which might come down the line. Failing to do so might leave you with a massive repair bill and no way to pay for it.
As such, work with your accountant or bookkeeper to breakdown the lifecycle cost for every major piece of equipment you own. From there you can determine the cost per mile driven and use this in your pricing model. Only in this way can you ensure you have the money needed to pay for major repairs before they happen.
Logistics is a highly competitive industry, but if you deliver top-notch service, focus on building sales, and invest in maintenance, you can have a business empire in no time at all.
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