The trucking industry is a vital industry and there is always demand for good, reliable, on-time and quality services. Starting a trucking company can be satisfying if you know your market, your capabilities and your customers. Also, a solid and tailor-made business plan will be a good supporting document to find your way, to make your decisions, to overview your business. Writing a business plan for your trucking company will help you make strategic decisions, and will guide you to reach the revenue and profit goals and ensure your survival in the competition. In this article, we will write the key components of a trucking company business plan, exploring each section’s importance and providing insights specific to the trucking business.
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Executive Summary:
Although the executive summary is the first part in a business plan, it is written last, because it is a summary of your whole business plan. In the executive summary, provide a brief overview of your trucking company, describing your focus; such as on long-haul routes, or short local deliveries, your location, your services, your organizational view, your company type (LLC, sole, Inc, etc.) management, operations and financial forecasts for the upcoming three to five years.
Company Description:
In the company description section, provide in-depth information about your trucking business. Write about your location, your legal structure, your service area, your trucks, your fleet, your team and their experience, your history (if applicable) and give information about what makes you different from others. This can be your service quality, service speed, reliability, etc.
Point out the differentiating features and value propositions of your trucking company, list your competitive advantages against your competitors.
Services:
In this section, provide the details of your trucking services. List the different types of services that you will offer, give details about each service. Also describe additional details if any, such as warehousing, etc.
Market Analysis:
Market Analysis is an essential part of every functional business plan. As an entrepreneur, you need to know your market and the factors affecting your market.
First, research the trucking industry and analyze industry Dynamics, industry trends, challenges, opportunities, etc. Provide statistics about the industry such as its current size, growth potential, annual growth rate, any risks in the industry, how many companies there are in this industry, how many people work in trucking industry, what are the average margin and profit rates, etc.
Describe your potential customers and their demographics such as population, age, gender, location, income. Give information about your customers’ choices, consumption habits, etc.
Describe the area that you will offer your services. Make a robust analysis of your area, location and spot the advantages and possible disadvantages of your service area.
A good market analysis will build a basis for your trucking business and for your strategies.
This section is also a good place to include your SWOT analysis. A SWOT Analysis is a strategic tool which helps you identify your business’ Strengths, Weaknesses, Opportunities and Threats. While doing your SWOT Analysis, be aware that Strengths and Weaknesses refer to internal factors, i.e., things you have control over and can change. In contrast, Opportunities and Threats are external factors, i.e., things you cannot control, but you can potentially respond to.
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Competitive Analysis:
Competition can be both your advantage or disadvantage. If you analyze your competitors well and find out the fields/services which they are weak or lacking, you can fill-in the gap and use the competition to your advantage.
For this, you need to analyze your competitors very well and figure out your strengths and advantages against your competitors.
Make a comparative list of your competitors’ strengths and weaknesses and define the differentiators that will make your trucking business a preferred company.
Sales and Marketing Plan:
Construct a well-defined sales and marketing plan to attract your customers and to gain the profits you need. To build this plan, first, concentrate on your target customer profiles. Develop unique and attractive sales propositions for your target customers. These can be the factors like speed delivery, affordability, quality, reliability, etc.
Positioning: Describe how you plan to position your business in the market.
Pricing Strategy: Detail how you’ll price your services in relation to competitors.
Promotion and Advertising: Set up and define your marketing strategies considering social media, local ads, trade events, on-line platforms, etc.
Describe your sales channels, including your sales process, techniques, and activities, including your payment collection processes.
Discuss how you will acquire and retain customers and any incentives or programs aimed at increasing customer loyalty.
Management and Operations Plan:
Equipment: Equipment is the most important asset in a trucking business. So, list the types and number of trucks you have and also write any other equipment which is vital for your trucking business.
Suppliers: Mention any third parties you work with, like fuel suppliers.
This section is also the showcase of yourself, your team (if any), the illustration of your organization, the description of your Daily and weekly operations and details of staffing and routing plan.
Write the details about your background (and your partners’ if any), provide information about your past experience, include any additional info which might be useful to Express your professionalism and business acumen.
Write down your day to day and weekly operations plan. This may include:
- Routing plans & optimization
- Equipment Management and maintenance
- Customer onboarding and communication platforms
- Safety protocols
- License and permits
- Insurance
- Cash collection, AP-AR Management, etc.
Provide a personnel plan as a list, write the headcounts for each role, starting from the highest level to the lowest. Indicate the monthly and annual salaries of each personnel.
Financial Plan:
A viable financial plan is a vital for a successful business. Therefore, spend extra time to deliver your financial plan.
First, start by estimating your startup costs and startup expenses. These are the basics of your trucking business and your business depends on these startup capital.
Startup costs are “one-time” costs that occur when you setup your business. They are different from startup “expenses”. They are not fully recognized as expenses in the year they occur, they are usually depreciated or amortized in several years. These cost may include:
Equipment Purchase, License & Permits, Branding, Deposits (Rent/Utility), Office Furniture & Equipment, Remodeling/Leasehold Improvements, Website Development, etc.
On the other side, there are startup “expenses” which are recognized at the year they are incurred. They are recurring expenses such as rent, insurance, wages, Office supplies, etc.
Startup costs and startup expenses will give you the initial costs. In other words, the sum of startup costs and startup expenses is your required funding amount to open your trucking company.
After defining your initial costs, you need to construct a reasonable financial plan for the next 3 or 5 years.
Start with estimating your sales for each month for the first year. Then, estimate annual sales for year 2 and year 3. Make your assumptions according to your prices, segments and number of the customers that you are anticipating to sell your products.
After estimating sales, estimate your expenses. Again, monthly for the first year and annually for the second and third years.
At the end, your sales minus your expenses will give you a rough estimation about your profit for each year. (you can consult with a Professional for taxes also).
Appendix:
When organizing the Appendix, include the materials that are referenced in the main sections of your business plan or those that provide significant additional insights or context.
Provide the necessary documents such as proforma financial tables, projections, assumptions, location maps, charts, graphs, images, cv’s of founders, etc.
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