Building a successful fleet business requires a great deal of dedication and sacrifice.
You need to do thorough research to help you understand the ins and outs of fleet management. Additionally, you need to develop a smart business plan and set aside financial resources, which you’ll be using when you start the business and when managing it for the first few months before you break even.
When it comes to fleet business operation, several dynamics come into play. Read below for deeper insight on how to build a successful fleet business.
Improve your credit score
A credit score is a number that depicts your creditworthiness. It’s essential that you know your credit score, especially if you’re planning to get a loan to start your business. Some of the things that can significantly impact your credit score are the amount of debt you owe and whether you pay your debts on time.
That said, to get a good credit score, ensure that you pay all your debts on time, if you have any.
Buy your trucks and vans from an established company
There are many places where you can purchase vehicles for your business. However, it is best if you buy vans or trucks from well-established brands. This will give you an absolute assurance that the vehicles will serve you for a long time without significant mechanical issues.
When buying the vehicles, you also need to check the warranty. This will enable you to take the vehicles back to the manufacturing company in case you encounter any major problems within the specified time.
You don’t have to go to a physical auto shop when figuring out which vehicles to buy. Conveniently, you can research the features of the trucks or vans you’re eyeing or their current prices online.
Have a plan in case the vehicle breaks down
When managing different vans and trucks, consider taking insurance policies to cover them. This way, you’ll get compensated if one of your vehicles gets involved in an accident or if they get damaged.
Additionally, it’d be good as well to you familiarize yourself with common maintenance tips such as:
- Ensuring your vehicles are serviced and fit for use
- Looking after your vehicles’ tires
- Getting regular driver reports
- Keeping your vehicles clean
Regularly doing this can help lower your vehicles’ chances of malfunction while on transit.
Furthermore, ensure that you have an extra vehicle on standby, which you can use in case one of the vehicles on transit breaks down. When that happens, you can quickly transfer the goods to the other vehicle for delivery, and then take care of the affected vehicle afterward. Having a backup vehicle can ensure that your deliveries won’t get interrupted, despite having unfortunate mechanical problems.
Use a GPS tracking solution
GPS tracking solutions allow you to remotely monitor the location of all your vehicles. This is critical for your operations, as it can give you information about the whereabouts of your drivers at any given time. Without such monitoring, drivers can easily engage in misdeeds that can negatively affect your business’ reputation and income.
Additionally, incorporating the GPS solution in your fleet business can be essential for cost control. This is possible through route optimization. In other words, such tools can help you select the fastest route to your destination by intelligent analysis of the different route options. This way, you can reduce fuel costs by approximately 20 to 25%. And that’s a significant saving on operating costs.
In addition, here are other ways in which tracking solutions can be useful:
- Reducing fuel costs by alerting you on idle time per vehicle
- They enable you to monitor employee performance
- Improving customer satisfaction by guaranteeing on-time deliveries
- Increasing productivity of drivers as they’re aware that they’re constantly under your watch
Hire qualified drivers
Since your entire business is anchored on vehicles and driving, it is a must that you hire qualified and experienced drivers who can do the job.
A good driver must possess sufficient technical skills, such as navigation, knowledge of traffic laws, basic vehicle maintenance, and more. Additionally, a good driver must also know how to practice safety measures while on the road.
You can also consider a more hands-on approach when gauging an applicant’s driving skills. You can set up a driving test, wherein you can observe first-hand how the driver works. This way, you can also coach them on driving dynamics, such as avoiding over-speeding and following road signs. Thus, you’ll get a rough idea of what working with the driver will be like. You’ll also know whether or not they’re teachable before you decide to have them on board.
Know how to pay your drivers
You’ll need to establish in advance whether you’ll employ full-time drivers with monthly salaries or if you’ll hire independent drivers on a contract.
If you employ independent contractors, you’ll have to agree with them on the terms and conditions of their contract. This includes when and how you should pay them. You can align either to pay them daily, weekly or monthly, depending on the mileage they’ve covered.
On the other hand, if you’re hiring full-time drivers, you need to pay them according to your agreed terms. You can do it on a monthly or a weekly basis. Also, you’re required to give them allowances, leaves, and all other benefits according to the law.
Know where you can get loads
Just like any business and transaction, connections are important to your fleet business. You can choose to deal with clients directly and deliver their goods to their rightful owners. On the other hand, you can partner with an existing carrier business and share the delivery tasks. Working with another company can be good, especially since you’re just starting. This can give you the opportunity to market yourself to your partner’s already established client base.
Moreover, you can decide to lease out your vehicles at a fee to clients who prefer to do their deliveries on their own.
Starting a fleet business can be a relatively challenging venture. It requires a lot of effort and commitment. However, it’d be good to note that success doesn’t come overnight. That said, you need to exercise patience, especially when dealing with the day-to-day operations of your business.
With these tips in mind, you can slowly build your way towards a successful fleet business that can bring you a handsome income for years on end.