Running a lean trucking business could put more money back in your bank account and allow you to grow more quickly. Here are sixteen strategies that can help you get a better return on the money you spend.
Maximize Working Capital By Running a Lean Trucking Business
Business owners that adopt a lean business strategy set out to spend less overall by ensuring that they are getting measurable value – and the most value possible – out of each dollar they spend on business operations.
The bottom line? Adopting a leaner business model could mean faster growth for less money. Below you will find sixteen ways to run lean trucking business operations in order to get more from each dollar you invest in growing your business.
Before you do, it is important to point out that lean businesses are not just organizations that try to cut costs.
Cutting costs outside of a business growth strategy could easily result in lost business when items that enhance the customer’s experience – and perception of the value of the goods or services of the business – are slashed.
A lean business model is an operating strategy that both:
- strives to eliminate waste in product and processes, while also simultaneously
- strives to satisfy customer wants and needs
A better understanding of the idea of a lean trucking business model might be the idea of creating more value for customers using fewer resources. It is about maximizing the value of each and every dollar spent in running and growing a business. The Lean Enterprise Institute shares a multi-step process for creating lean business operating tactics that boils down to this:
- Identify specific value prized by your customer
- Identify all the steps or inputs it takes to create that value, and eliminate any unneeded components
- Make the stream tighter; make the value-creating inputs occur in as tight a sequence as possible to get it to the customer as quickly as possible
While it might sound simplistic, tracing back all of your business processes to their elemental components might be difficult. Luckily, we found an Entrepreneur Magazine infographic (scroll down) which identifies sixteen ways to run a lean trucking business and make your company more efficient and profitable.
16 Ways to Grow Faster By Running a Lean Trucking Business – Infographic
1. Go Without
When it comes time to make a purchase or a hire, take time to be sure that it is necessary and eliminate the possibility that there are less expensive ways to fulfill the need.
2. Lead by Example
It can be difficult to get employee buy-in for a work environment that is too cold in the winter and too hot in the summer (for the sake of saving money) if you aren’t working in the same conditions. If you want others to remember to turn off lights and equipment when not in use, be sure they see that you are doing it too.
3. Source Creatively
You might be able to trade for goods or services with other companies at a lower cost than buying comparative goods or services outright. Network with other local business owner and Chamber of Commerce groups so that you can source more creatively. As a bonus, you will also be earning local goodwill as you create mutually beneficial networking relationships with other organizations.
4. Get Things in Writing
Eliminate unpleasant surprises by asking to have the details of your agreements with vendors, suppliers and clients spelled out in writing.
5. Recycle and Resell
Rather than throwing out old equipment or furnishings, see if there is someone willing to buy them from you, or whether some of the materials (such as metal) could be redeemed at a recycling center for money. Every penny recouped by recycling or reselling counts!
6. Max Out Available Discounts
Save money by taking advantage of discounts available to your company in business networking groups, industry purchasing groups or memberships in business office supply stores or big box retail centers.
7. Take the ‘Petty’ Out of Petty Cash
Petty cash funds are often made available to make it easier for staff to make change or to go out and buy miscellaneous supplies. In a lean business, there is no such thing as a “petty” – or unimportant – line item. Keep track of petty cash and any other slush funds and establish accountability.
8. DIY as Much as Possible
If you can save money by creating your own forms, printing and cutting your own business cards, picking up local supplies rather than paying for delivery and making repairs and renovations yourself, you may be able to shave lots of dollars off the operating budget. And do not forget to tap your staff, because they may have skills or connections that can be leveraged to help you grow that you aren’t yet aware of.
9. Ask Why
Take nothing for granted! Before re-upping or when auto-renewal windows arrive, make sure you are asking whether it is still essential to your business and taking the time to explore competitive quotes.
10. Hire for Core, Outsource or Train for Extras
Before hiring or refilling a position, consider whether you are hiring to a core business need or might be able to reduce costs by outsourcing or spreading tasks out among existing staff.
11. Waste Not
Save by buying in bulk when you can, printing on both sides of your paper, using waste paper as scrap for taking notes or phone messages, refilling print cartridges and other penny-saving practices. Pennies can add up fairly quickly when everyone is getting the most out of supplies and equipment on hand.
Going paperless and storing backup documents remotely can also help you cut office supply costs immensely over time, since you will not need to purchase as much paper or ink or storage units.
12. Get Professional Help Where It Matters Most
The cost of legal, marketing, accounting and other expertise might seem expensive, but it might be a drop in the bucket compared to the pitfalls you might encounter if you don’t pay for experts when it comes to doing your taxes, reviewing contracts, submitting trademarks and copyrights, writing business plans and completing other business activities.
13. Keep All Your Receipts
You may be unaware of all of the different business expenses that qualify, so to make sure you can take advantage of all deductions available to you, keep all your receipts, at least until tax time! You can save money and time by investing in a system for digitally scanning and storing all your receipts, eliminating the need to print and store vast amounts of single records of transactions and saving time by filing them digitally for easy retrieval when needed.
14. Use Plastic Money Strategically
Some credit and debit cards or banking activity can help you earn rewards, miles, and other perks. Look around for those that offer the type of rewards that would benefit your organization most and use your cards strategically.
15. Negotiate Everything
Ask vendors and suppliers for discounts on cash or early payments or negotiate for longer payment terms that will let you keep working capital on hand longer, whichever is more financially beneficial to your organization. Also, find out how factoring invoices with a top freight factoring company can put you in the driver’s seat when it comes to negotiating with vendors or extending better terms to your own customers.
We offer great freight factoring rates even to single truck and small fleet trucking companies, including small invoice, spot factoring and micro factoring programs that let you maximize the benefits of factoring only when it is best for your trucking company.
16. Buy Used Instead of New
Craigslist, newspaper classifieds, eBay and second-hand stores all make it possible for you to buy office furnishings, supplies and other items at a lower cost than new items usually require. Likewise, watch for local going out of business sales, surplus auctions, and other events where you may be able to save exponentially on the equipment, supplies and furnishings your business needs.
Featured image, @5m3photos via Twenty20