“I'm uncomfortable when I'm comfortable. I have to start something new -- in the agency or in my personal life – every two years or so. Taking risks gives me energy. I can't help it; it's my personality. I'd like to think it's not really a compulsion toward high risks, but the spirit of an entrepreneur.” –Jay Chiat
Trucking is a tough business, even in the best of times – and now is certainly about as far from the “best of times” as one can get.
Yet, despite even the enormous challenges facing owner-operators and fleets today, it’s still possible to eke out a good living by operating trucks – be it hauling freight, dirt and rock, refuse, you name it. The thing is, you’d better be fully committed – and have a business plan mapped out and thoroughly vetted – before you get behind the wheel and start shifting the gears.
Professor Jerry Osteryoung from the college of business at Florida State University offers some valuable insight on the whole issue of starting one’s own business – be it in trucking or otherwise – in today’s harsh economic climes. His bread and butter is the theory and practice of “entrepreneurship,” which is one of the big engines of business that drives the American way of life.
From Osteryoung’s perspective, even in these rough times, starting your own business might actually be less risky than you think – especially since so many “established” companies and the jobs they provide can be found on the shoals of fiscal trouble today.
“In today’s tough times, working for someone else is no longer considered secure,” he explains. “With an unemployment rate heading northwards of 10% and an economy that is not yet stabilized, now is the time to consider starting your own business.”
He freely admits that being in charge of your own destiny is both scary and rewarding. “It is scary as everything rests on you, yet it is rewarding for the very same reason,” Osteryoung says. “So many people say that entrepreneurs are born, but I am here to tell you that entrepreneurship is a learned discipline. Some people just learn faster than others. The best entrepreneurs that I have seen are those who are committed to learning continuously and really care about people.”
Osteryoung points out that starting a small business in a smart way significantly reduces the risk of such an undertaking. “Firstly, lack of adequate capital and lack of knowledge about the business are what kill small businesses,” he adds. “Both of these risks can be eliminated by approaching the task of starting a business with caution and knowledge.”
The best way to ensure that a start-up business obtains adequate capital, in Osteryoung’s view, is to start slowly and let the funds build up through operations.
“I frequently recommend that prospective entrepreneurs do not quit their jobs to start their businesses, but that they start in the evenings and on the weekends,” he says. “By starting on a part-time basis, the cost of start-up is much lower, and as an added benefit, you get the opportunity to see if it is really what you want to do before you go into it full time. Additionally, limiting how many dollars you want to put into the new venture reduces your risk and loss.”
A company driver, however, might find that almost impossible to do, since they function under set work day limits (and rightly so) set by federal hours of service regulations.
Yet while that means you can’t drive a truck during those off-duty hours, you sure can hone your business plan to a razor’s edge. Going over paperwork requirements, mapping out freight lanes, looking for potential customers, developing budgets and operating plans is all exceedingly important work – vital for anyone attempting to get a trucking business up, running, and thriving.
Timothy Brady, another one of my favorite trucking experts, offers a few insights those attempting to start – or expand – a trucking business in the current economic environment.
“First and foremost, you have to have a strategic growth plan,” Brady stresses. “This is a plan which lays out several things.” Those include:
• How much capital (money) is needed to sustain the operation in times of reduced business? This is called your Capitalization Point.
• How much money needs to be set back to acquire the needed trucks, trailers, other equipment and/or facilities to expand the business?
• What personnel will be needed, to bring the growth on-line and then to sustain it?
• What is the length of time from placing a new piece of equipment into service and when it will reach a sustainable positive cash flow?
Map those points out, and a trucker should find themselves better poised to make their business venture a success, says Brady – and, above all, never miss a chance to KEEP learning and fine tuning that business plan as time goes on.
That’s something Osteryoung also stresses. “In order to be successful, a potential entrepreneur has much to learn, but there are so many places to get help,” he explains. “The U.S. Small Business Administration has set up Small Business Development Centers (SBDCs) in almost all medium to large cities – usually attached to a university. At these SBDCs, counselors will guide you through the process of getting needed licenses, legal documentation and so much more. SBDCs are wonderful sources of help and assistance. “
He adds that there’s also a wealth of other assistance available out there, potentially more valuable due to the experience attached to it. “Just about every successful entrepreneur, if approached correctly, will be willing to help a potential entrepreneur – assuming that they are not going to compete with them,” he says.
Osteryoung also believes testing the waters to see if you like what you’re about to embark on first is also pays a lot of dividends. “Not too long ago, we were helping a couple who wanted to go into the funeral home business. We encouraged them to go to work in the industry, even if on a part-time basis or for free, to ascertain if they really liked it,” he relates. “They were able to get low-level jobs at a funeral home and rapidly decided that it was not the right industry for them. They really saved a lot of time and energy by not just jumping in without adequate knowledge.”
In short, Osteryoung believes entrepreneurship is a wonderful profession as you get to be in charge of your own destiny and help others at the same time – but without adequate planning beforehand, your risk of failure increases. “In order to be successful, you need adequate funding and significant knowledge about your business,” he says. “You simply can’t overlook those.”