Fear is griping the nation with everyone holding on to cash like it was, well, money. After years of living on various forms of credit in the shape of plastic cards and home equity, the whole shebang came to a screeching halt. Despite the astonishing downturn affecting everyone I know, I believe that the upturn will be just as dramatic so it is important to position your business now for when that happens.
Many carriers have never faced such an absence of financial support but there are alternatives out there if you take the time to look for them. Factoring your invoices can be a temporary way to free up cash flow that is tied up in receivables. At Freight Capital, we have a “Kick the Tires” program that lets you try out factoring for 30 days to see if it works for your business. Surviving a dry spell is a temporary situation that absolutely will end in the future, but you need to be ready to take advantage of situations when the business starts picking up again.
In the meantime, do not just control your expenses but eliminate the ones you can. If you allow Freight Capital to monitor and manage your accounts receivables, you can reduce back office staff. Or you can redirect your office staff into marketing your business to a wider net, essentially seeking out new opportunities where another carrier may have dropped out or a specialized need can be filled. Consolidate routes and optimize your personnel wherever you can.
Be aware that accepting a low-rate load or a quick pay trip has hidden cost in the discounted load and extra fees in the prepay process that only delivers smaller and smaller paydays. Negotiate for full-rate loads that pay higher even if they require extended terms because in the long run, servicing good-paying customers will keep your business afloat until the pendulum swings back.
Practice the very best customer service by contacting your present customers and making sure you are doing everything right by them. Personalized, heartfelt sincerity is appreciated everywhere so let them know that you value their business. Be the trucking business that is always on time, doing what you promised and providing courteous, friendly service.
Keep current on your bills and protect your credit by only hauling for reputable brokers and shippers. Some of these businesses have cash flow problems and unless you credit check every time, you may not realize that they are not keeping current with their invoice payments but moving from trucker to trucker to delay payment as long as possible.
Most all, believe that this downturn will end. There will be a pent-up release of consumer purchases as soon as the economy appears to be stable. A positive, optimistic attitude will carry your business through and telegraph to your customers that you are going to be there to deliver loads when they need you. Present yourself with confidence even if you do not feel it.
In this case, you have nothing to fear but fear itself.
A transportation industry expert, John Downing is the President at Freight Capital who specializes in financial solutions for the trucking business.
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