Businesses fail every day for various reasons, the main one being money or lack thereof. It is usually small trucking companies that fail due to less knowledge of the industry, the larger companies are larger in the first place because of their superior understanding.
That being said there are some cases of large companies failing, New Century being one example. Even so, it seems that trucking businesses are struggling in recent years, particularly with the driver shortage affecting multiple countries. With that in mind, let’s take a look at three of the biggest reasons why trucking companies fail.
Poor Management
This refers to the management of the staff within the company. Many trucking companies fail because they aren’t utilising experts in business management. Poor time utilisation comes into this as well and a system of organisation processes needs to be implemented to make sure all areas of the business have the same attention.
Simply being aware of loads coming in and going out and the money it generates is a great example of where many companies fail. This is also where adoption of advancing technology could help with the organisation process, saving time where previously manual input was frequently required.
Bad Planning
The ability to plan for the future efficiently can be the crucial mistake that businesses make when trying to survive. Gathering advice and information from other professionals is important in understanding the industry and where it is going. Not looking to the future to identify potential changes is naïve and something you wouldn’t expect from business owners but it does happen.
By creating a simple SWOT analysis, you can identify opportunities and threats for the business. If you were to then plan around this, you could develop a contingency plan for things that may go wrong as well as a plan to improve business operations.
Monitoring of Cash-flow
This issue can be related to the previous two, however, it is important to discuss because many trucking companies struggle with understanding their market. When trying to come up with a strategy for fixing a cash-flow problem, you must be aware of different factors like unpaid invoices, level of business and cost of operations.
This is where it may be useful to enlist the help of professional services to help identify issues with cash-flow and ways to combat them.
All businesses are prone to many of these issues but it is trucking businesses that seem to be particularly vulnerable. Whether it is to do with the industry they are in or the lack of general expertise in business management, they remain a prime example of how easy it is to collapse quickly. For more information on the HGV driver shortage affecting many trucking companies, check out this infographic from Return Loads.
