You do not need to be in business for long in order to pick up some bad debt. No matter how well you think you screen your customers, it is inevitable to find companies that even though you delivered an acceptable product or service to them, they either can not or will not pay your invoice to them.
It was a combination of these problems that a Nevada USA Temporary Employment Agency found itself in. They had a few accounts that had been hit by the recession and filed for bankruptcy protection and a couple others that just decided that they were not going to pay. All invoices were supported by the proper sign offs so the customers had no grounds for non-performance or non-delivery of services but the Placement Agency was still sitting there with bad paper.
It was after this happened 3 times that the owner of the Placement Agency decided to look into options to stop this problem from really getting out of hand. They had already depleted their cash reserves and they could not withstand another customer not paying their Invoices or they would be looking into bankruptcy protection themselves.
The part of the solution to the problem was for the company to look at Insuring its Receivables. But what about the Cash Flow problem?
The owner of the Employment Agency decided to look for options using a Commercial Finance Broker because they had the best options available on the market plus it would not cost him anything for the service because the Business Finance Broker is paid by the lender.
The Broker was able to liquidate their current bad debt, put them into a Commercial Factoring program which was insured so that they now had a Non-Recourse Invoice Factoring and the advance they took on their Accounts Receivable would never come back against them.
When you begin a transportation company, a sturdy cash flow is just as critical to your business success as your faithful semi truck. As you may be familiar with, freight factoring can be a perfect financing option for a trucking business. Unlike the long process of securing bank loans after deep dives into your credit record, a factoring company can find you started right away, giving you quick cash when you need it.
Actually, savvy truckers often advocate that new truckers secure a factoring company right away. That way, you’re all set up and prepared when you require it.
How to begin a Hot Shot Trucking Business
If you’re gravely thinking of starting a trucking company, before you buy your rig believe through what type of hauling as well as deliveries you want to make. Another thought will be whether or not you plan to make your own customer base as an owner worker. This takes time, and time is cash when it comes to hauling loads, particularly when you have truck payments to create. If you previously have connections to get you started, though, you can make your hot shot trucking business into a self-governing and profitable venture.
The faster route to getting your business going is to rent your services or sign on with a trucking business looking for hot shot truckers. This choice not only takes the pressure off for discovery loads to haul, but it also removes the liability of paperwork and billing from your shoulders. Naturally the trucking business finds the loads to haul for a cost. Usually this arrangement puts about 70% of the freight charge into the pouch of the trucker, and the other 30% goes to the trucking corporation.
Purchasing Your Truck
If you don’t previously own a rig and your desire to start a hot shot trucking business, it is most excellent to buy a used truck to get started. Buying used over fresh will save you thousands in initial costs. Sites offer a great inventory of in the past owned hot shot trucks. However, a word of concern must be extended with buying a second-hand truck. Take the time to investigate manufacturers and models. Learn what’s reliable and look for a truck that can be elastic in regards to what type of load it can bring.
The most ordinary features for trucks used in hot shot trucking comprise of tandem axle, dual tire and 24,000 lb gross weight ranking.
Getting Financial Support
The transport industry has a low barrier to entrance at the bottom of the market, meaning that anybody with a bakkie or a minibus can begin offering transport services. This results in a flood of opposition at the bottom end of the market.
In a lot of instances, the entrepreneur starts a business with small to no capital, relying instead on income derived from the business to cover every overhead from day one. This lack of funds curtails marketing actions that may result in increased income.
Where To Locate A Mentor To Assist In Launching A Transport As Well As Logistics Business
The Transport as well as Logistic industry is extremely competitive and because this over-supplied marketplace, mentorship will be extremely useful when opening a new business.
As a beginner, you will have to surpass your competitors and research the market cautiously to find a gap that will aid to successfully establish the business.
Many mentors have exact knowledge of specific types of businesses for example a transport or logistic business, a restaurant, bakery, hotel, butchery, garage, supermarket, or businesses in security, manufacturing, trading, or services. Don’t worry too much about it, as time will definitely tell you exactly what you have to do to succeed in this business with everything that you can learn.