Moving Words – Cutting Too Much
Timothy Brady
“There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.” John F. Kennedy
Yes, as a moving company owner you need to be constantly aware of every cost anywhere in your operation. And keeping costs down has been the subject of many of my blogs over the years. However, there is such a thing as cutting costs and expenses too deeply.
It’s becoming more and more difficult to do repairs and, in some cases, even the maintenance on your equipment unless you’re a very large operation with the budget to afford a fully stocked and staffed truck/trailer maintenance facility. Unless you have qualified, trained mechanics who understand the myriad of computer and electronic components that make up a modern-day engine, you will end up costing your business more money in the long run. It’s best to find a certified diesel mechanic shop, one who continues his/her education on a regular basis and stick with their repair shop forever. If you want, of course you can do the small stuff – changing wiper blades, refilling fluids – but every penny you pay the professional mechanic will be returned in less downtime, far fewer breakdowns and certainly less aggravation for you. Far better to have an aggressive preventive maintenance program that catches potential problems and repair them before they put a truck on the side of the road. That ounce of prevention is much less costly than a pound of trouble derived from ignoring a small problem that becomes a very costly one.The old saying about being ‘penny wise and pound foolish’ certainly applies in the trucking world in which we exist. For instance, if your trucks need major overhauls to meet the extremely strict California clean air regulations – should you go to that expense in the first place? If at least 75% of your regular shipments are going to or coming from California, then yes, you are going to have to buy new trucks or do maximum upgrades on your existing fleet. But if California freight makes up very little of your usual loads, then why even consider the costs of doing business there? If you don’t have five or more well-paying, consistent lanes to service year-round, your time is far better spent finding new customers or improving the lanes you now have that are outside of California.
Speaking of improving the lanes now in existence, do you have your van operators strategically placed at each end of your regular lanes? They need to be spending their ‘waiting for a load’ times at home, not OTR or in a truck stop somewhere. Their families will be happier, your drivers will be happier, and the faster and more thoroughly you cover each turn of every lane, the more profit your carrier can generate. Not to mention a happy van operator is one that stays with your company.
If you’ve decided some of your office personnel has to go, have you considered hiring college students part time to fill in the gaps? Filing, answering the phone and printing out letters and attachments for you to sign can all be done by someone just starting out in the work world. Also consider someone who is retired from the daily grind but needs some paid hours to help out with the bills.
The last person you want to let go is a van operator, so look at many ways to retain him or her before getting out the ax. Are you in a metropolitan area that needs regular deliveries in congested areas which are difficult for a semi to get into? Have you got a straight truck that’s usually sitting on the lot that could be employed too? Or would your driver become a trainer so you could take on another two or three ‘newbies’ and give them the training that only years of experience can impart? Or add him or her as a dispatcher, one who knows the ins and outs of the lanes in which you operate and the shippers and corporate customers’ idiosyncrasies that only experience can impart. If the van operator is played out from being on the road, don’t let years of moving experience go out the door. They are a valuable asset to your operation.
Sales staff of course is supposed to be impervious to economic downturns and sluggish cash flow. But if you’ve got a salesperson who isn’t busy enough or is having difficulty finding prospects, split that sales job and make it half sales and half marketing/PR. Tell him or her to be in the office half the day, working on getting attention on social media and making cold calls by phone or email, and the other half out in the field, talking to potential shippers and going to business events. Send that person to every event your local Chamber of Commerce stages, as well as trade shows, conventions and even sports tournaments if there’s a chance to talk to people. Any person may be a shipper at some point, or they may know someone looking for the services your moving company provides.
Keep your moving company running many profitable miles by watching your costs and expenses – but don’t forget to step back and look at the overall picture as well. You do not want to ‘save’ your operation into starvation.
“Profit or perish… There are only two ways to make money: increase sales and decrease costs.” – Fred DeLuca
