“Working harder is not always the answer.” –Jerry Osteryoung, professor emeritus of finance with the College of Business at Florida State University
It’s been a while since Professor Osteryoung (below, right) has graced this post with his perspectives on entrepreneurial business strategies – and let me tell you, trucking is home to more entrepreneurs and small business owners than you can shake a stick at, making his thoughts all the more welcome.
He recently penned a column about the need to be “brutally realistic” in the business world – something that is particularly vital for those in the “small shop” category to remember. That goes double for the small trucking business because this is a “mature” industry, meaning there are lots of very large, well-established competitors than can, in many cases, haul freight faster and cheaper than the little guys.
Yet that doesn’t mean small truckers need to throw in the towel and leave the big rig business behind … but it also doesn’t mean they shouldn’t think they can just lower their head and shoulders like an outside linebacker and smash their way to success. Indeed, sometimes – in Professor Osteryoung’s experience – simply working harder isn’t always the right strategy.
“Being realistic about what is possible and, more importantly, what is impossible, is absolutely critical when running a business,” he explained. “There come times in most entrepreneurs’ lives when they will not be able to accomplish the task they have set their sights on. Recognizing this is not a sign of weakness, but a sign of strength. Being realistic about what is achievable is important as it keeps you from wasting energy trying to move an immovable wall.”
For example, he pointed to couple who that had labored at their start up for four years only to stall out at $1 million in annual sales.
“They were struggling since they had not been taking much money out for themselves in the hopes that the business would gradually improve so they could recoup some of the dollars they had invested,” Osteryoung said. “But no matter what they did, their sales remained flat. So they came to us for help improving their sales efforts and a number of other areas of the business. They figured if we improved some of these other areas, sales would follow.”
Yet Osteryoung said trying to help them proved very frustrating – but not for the reasons you’d expect.
“These clients did everything I asked and had good results in every area except for sales,” he explained. “They were just working so hard without much to show for it. With clients that are both good people and hard workers, it is very frustrating to watch them give it their all and still fall short of the results we all are hoping for.”
Exasperated with the lack of results, he said the three of them engaged in what Osteryoung called “one of those serious and life-altering conversations” about whether the reason they couldn’t increase sales centered on something they were or were not doing or market conditions.
“We all agreed that the market was fully saturated and there was very little they could do now to improve sales,” he said. “But once they understood that it was impossible to gain market share effectively – there was just nowhere to go – we began discussions about other services they could potentially offer to differentiate themselves from their competitors.”
As a result, they determined they could add three or four additional products and services to their mix to revive their business. “I really believe that with some time and energy, they will be able to grow their business by concentrating on these additional areas,” Osteryoung noted.
There’s an important lesson in here for truckers – especially the small operators – for even though freight is (for many) flush now, this is a cyclic industry, so downturns are expected (though hopefully not as severe as the Great Recession, let me tell you!)
Indeed, lots of savvy truckers are trying taking advantage of things other fleets view wholly as impediments.
Take the Federal Motor Carrier Safety Administrations (FMCSA) new Compliance Safety Accountability or “CSA” rules. While many fleets think these new rules are onerous, the rules also are tying shippers more firmly than ever to the carriers they select to haul their freight.
As a result, many fleets are burnishing their safety profile like never before because they believe – and rightly so, in my opinion – that being truly “top notch” in terms of safety scores can lead to more business, giving shippers that “peace of mind” that they’ve chosen a fleet with rock-solid safety metrics.
That’s but one of the smart plays truckers are executing today – not just trying to haul more freight to make money, but by offering to put that freight under a well-documented “safety umbrella” to alleviate shipper worries concerning risk exposure. That's smart thinking, for sure.