Do you really need a business plan?
You’ve probably heard people say, “Write up a business plan.” Most are well meaning, but some might be inferring you’re dumb and don’t know how to run a business without one.
But the truth is, there are successful hotshot operators who don’t have a formal business plan. Sure, they’ve learned along the way and figured stuff out. They’ve done some things wrong and have grown from it. But for the most part, a “business plan” is useless.
A Formal “Business Plan” is Mostly Impractical
What do we mean by that? You know…
- Define your vision
- Set your goals and objectives
- Define your unique selling proposition
- Know your market
- Know your customer
- Research the demand
- Set your marketing goals
- Define your marketing strategy
To get this formal business plan written, you also need to complete the following sections:
- Executive Summary
- Business Description
- Market Analysis
- Competitive Analysis
- Sales and Marketing Plan
- Ownership and Management Plan
- Operating Plan
- Financial Plan
This is all good in theory. But I’m not sure if those who advocate having those business plans actually have real businesses. Those formal business plans are not too relevant for small companies, small businesses, first-time sole proprietors or first-time single-member LLCs.
Most sole proprietors in hotshot trucking use an app, website, or some kind of service to get their customers. Most freight transporters get their loads from Truckstop, DAT, and Central Dispatch (for cars) — the three biggest load boards for freight and cars.
The Only 3-Step Business Plan You’ll Ever Need
You’re probably familiar with the acronym KISS (Keep it Simple, Stupid!). If you are interested in a hotshot, there are three simple steps that are absolutely crucial for you to know intimately:
- Contract the load
- Transport the load
- Get paid on the load
You can boil down every single trucking company into those three steps. The operations of each of these steps is how your business will be successful.
1. Contract the Load
You can contract a load many ways. You can contract it from Truckstop.com. You can contract via direct customer. You can contract a load from a broker. So that’s still a contract. Your rate confirmation is a contract of the load — how much you’re gonna get paid for taking something from point A to point B. That’s a rate contract. There are many ways of getting this contract, but you have to figure out which one is the easiest for you.
2. Transport the Load
This step is crucial. Some recommend using Enterprise Rental because transporting the load means you have to have equipment — the most reliable and the easiest equipment to maintain. An Enterprise Rental almost never needs any maintenance. You’re almost never breaking down. And when you do, they take care of you (a little bit). As in the previous step, you have to figure out what’s the most reliable, cheapest possible way of doing that.
3. Get Paid on the Load
How are you going to get paid? Is it COD? Factored? Is it invoice direct?
The Bottom Line
Really breaking down how you’re going to do each of these three steps, and understanding them well, is more important than any business plan. Figure out how each of these steps will happen on a repeated process, and streamline that process. Figure out how to do those three things well, and you’ll be a more successful hotshot than you could ever plan for.