Capital & Cash Flow
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Before you begin your transportation business, you need to first take a serious look at your bank account. You should realize that starting and running a trucking company is very costly and it only gets more expensive each day that goes by. If you have not yet started your trucking career, you will soon come to find out all the costs and expenses that are involved when it comes to running a transportation company. Let’s start off with talking about diesel fuel. Unless you are driving something that runs on gasoline, propane, or electricity then you are most definitely pumping that greasy green stuff into your fuel tanks all the time. Am I right? Also, the last time I checked, the price of fuel wasn’t that cheap and the miles per gallon these steel ponies are getting isn’t that great. While you should understand that there are times when your fuel expense might be close to equaling 50% of your gross revenue for that week; you should further understand that fuel is only one of many things you will be forced to shell out your hard-earned cash for, in order to keep the wheels turning on your truck and your trucking business. Here’s another thing you should bear in mind, whether you are hauling freight for a company, a manufacturer, or a freight broker, the industry standard for the average time it takes to receive your money is 30 days from the day that you invoice for any given load. This means that you should be expecting to wait up to a month before you are paid for any of the work that you have done. If you aren’t comfortable with that fact, then I would sincerely recommend that you do some research on partnering with a financial provider such as a factoring company and think long and hard about whether you can afford to start a logistics business or not. I can promise you one thing you can’t afford, and that is starting up in this industry and not having the capital and/or cash flow to keep it running. We all see it happen every single day, another commercial motor carrier goes bankrupt and out of business. We have folks that aren’t making it out here on these roads, simply because they didn’t take the time to carefully and properly plan out their business strategy. The number one thing that they all underestimated was what it really costs to be a trucker. Please, don’t let this happen to you and your family. I want you to read the statistics, not become one.
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