Fleet Trucking: The CEO Mindset That Generates Rapid Growth
Whether you’re an Owner-Operator or carrier company, putting core practices into action has the power to create real business growth in the fleet trucking business. We spoke with Matt Manero, President of Commercial Fleet Financing (CFF), to learn about the different options out there for growing your fleet.
Whether you’re just starting out or scaling, read on for real-world insights from the wisdom of an industry analyst and financial services insider. From box trucks and tow trucks to semi-trucks, Matt and the CFF team are passionate about helping fleet owners learn what it takes to develop a thriving trucking business.
DUKE.AI: We’re here with Matt Manero, trucking finance industry analyst and President of a prominent trucking finance company, CFF. You don’t just finance equipment; you also really love sharing industry perspective. Tell us more about your mission.
Matt: We certainly look at Commercial Fleet Financing as a finance company, but I do think that we go at it differently. We spend a lot of time educating clients as well. We have talked to 10s of thousands of customers and we go above and beyond equipment financing, deep into business topics owners are interested in. On our blog and videos at CommercialFleetFinancing.com, owners can learn how to hire and how to fire. We talk about how to manage a trucking business successfully. And what it takes to go from being a good truck driver to becoming a good CEO.
DUKE.AI: You have an audience similar to DUKE.ai, our all-in-one bookkeeping and accounting tool. Your ideal clients look like business owners who’re in the trucking business. So, if you’re an Operator in business a few years already with a handful of trucks and you’re interested in adding another semi, truck tow truck or box truck, CFF should be in your sights.
MM: Absolutely! Today trucking is such a tough business that without a new owner having a vision and a roadmap for success, the failure rate of startup trucking companies is tremendous. We prefer to finance customers with at least two years in business, just because we think it improves their level of success and therefore our level of success.
There’s a lot of reasons beyond credit risk that we start working with customers after two years in business: we’re not so sure we want to be the conduit that helps someone buy that first truck because a lot of times it just doesn’t work out.
DUKE.AI: And we’re fans of the additional education you’re making available to truckers too. We’re seeing that many DUKE.ai customers, whether they’re starting out with their first truck or expanding a fleet, there’s a huge need in the marketplace to quickly get a handle on business and financial processes – it’s precisely what we are here to help owners and carriers address. We’re at the forefront of bookkeeping and accounting for all aspects of the trucking business, through a mobile app: a tool truckers use every day to make managing a business on your own very possible. Likewise, if you’re learning the ropes of authority over many vehicles, DUKE.ai is the tool for ensuring successful financial management expands with you.
From your perspective, how does a tool like DUKE.ai make adding a new truck more realistic for individuals who are dreaming of managing a fleet?
MM: We talk to thousands of truckers and small trucking companies every month. When you’re a good driver, but maybe dislike working for the company, you can choose to go out on your own. Well that sounds good, until you have to actually run it as a business.
Handling receipts and keeping track of books: these are things that create tremendous efficiencies that every trucking business needs to succeed.
DUKE.AI: We started out in the trucking business and realized quickly that an efficiency tool didn’t exist for company drivers or Owner Operators. And that’s why we created DUKE.ai – we designed it to scan receipts and be your trucking company’s all-in-one bookkeeping and accounting app.
The kind of efficiency you’re recommending is what DUKE.ai is tackling. It has eliminated the need for drivers to organize paper receipts and places all their financial information at their fingertips – using the DUKE app means immediate CEO-level insight into how their business is doing at any point in time.
MM: These are all things required for trucking clients to get good at. And the only way you pick up more profit is through efficiencies. You certainly don’t have to pay a big CPA firm or a bookkeeper to be supported in your business.
DUKE.AI: From your perspective, when is it a good decision to establish a line of credit or request working capital from a lender?
MM: Trucking is a highly capital-intensive business, right out of the gate. We’ve seen way too many customers buy inexpensive trucks because that’s all they can afford and they’re afraid to get into debt or start a line of credit. So, they’re buying an older $20,000 truck with 800,000 miles on it – that’s how many start a trucking business. Maybe it sounds good, but the reality is despite fear of the new truck payment, they end up spending the money anyway. Why is that? It costs $1,000 to get a truck towed and the odds of a $20,000 truck breaking down sooner rather than later are tremendously high. So, we think that the new $150,000 truck is a smart play right out of the gate.
Debt is a big part of the business truckers have chosen to get into. So, we think that educating customers about what it takes to access lines of credit, and other financing like factoring relationships to get paid faster to maintain cash flow, are important. Owners must learn to run a business that supports a monthly payment, handles repairs and gets the job done and without breakdowns leading to their end customer’s dissatisfaction.
DUKE.AI: And in trucking, keeping your customers happy is highly important! I understand that you have a sister company, Fresh Start, that may be an option for someone who’s getting started in trucking and may have a credit challenge or may currently have only one or two vehicles in their fleet. Can you tell us more?
MM: Fresh Start is a very structured program we started out of necessity. We found a way to help those who need additional help getting equipment to take them to the next level along with a bit of education with it. In time, the Fresh Start customer can be in business and repair the credit while working their way to qualifying for prime lending.
Fresh Start is a program where we’re helping those turned down by our primary business due to the risk – It’s a larger down payment and higher interest rate in the short term; so we help them get more equipment that takes them to the next level and hopefully improves cash flow. Fresh Start is offered as an opportunity for them to get their credit cleaned up and start to move to prime financing.
DUKE.AI: So, if a trucking company has had a prior truck repossessed, what does qualifying for a new truck look like?
MM: If it’s just a matter of getting negative items or inaccurate items removed, we refer business owners over to a credit repair affiliate with a lot of success there.
Revenue solves a lot of the problems for a trucker. When a business owner goes into a deal with tough, challenged credit and then gets tough financing, but then they don’t grow their revenue, there isn’t a fundamental change there that’s going to change their business outcomes. So, they have to purchase trucks.
Trucking is fundamentally a revenue versus fleet-size equation: the more trucks you have with good contracts, the more money you’re gonna make. That’s why we like to educate truckers on becoming business owners.
DUKE.AI: So your core message is that truckers have got to become true business owners to earn better, but also to keep it up year after year. What can a trucker with a dream start to focus on, when they decide they want to grow their fleet?
MM: We provide education that looks like: do you know how to get great contracts? Do you know how to sell? Do you know how to hire the right people? Are your finances in order so that you can get the debt service to grow your fleet? It’s not just about getting credit so you can get approved to buy a new truck — it’s about making these fundamental changes to become a great trucking CEO.
Someone from a difficult background can go into the trucking industry and really make something of themselves, but they have to do it differently today than they have in the past. The old cowboy truckers could just run a lot of miles; we can’t really do that anymore with ELDs (Electronic Logging Devices), so we’re in an era where you gotta learn to run efficiently. You gotta run a trucking company like a real business. And we’re seeing a lot of younger people who get this; they really do run their trucking companies like a real business. The dinosaurs of trucking wish for the old days, they hate ELDs but we’re not going back – now, the only way you make it in trucking is to be a great CEO and be a trucking company using true standard business practices.
DUKE.AI: So, becoming a successful business owner is not just about getting your credit fixed. It’s about changing your mindset about running a great trucking company. We’re not focusing solely on credit repair or just on adding that next truck. Where are you seeing this in action?
MM: All over the country, we’re starting to see new guys, including foreigners, come in who really get this. For example, down in the valley of Texas, we’re seeing guys start with two trucks. Five years later, they’ve got 200 trucks. They’re making it in trucking. Why? Whether you have one truck, or you have 100 trucks, running your business like a CEO and not like a trucker is the secret to their success and sustainability. It’s all the same with our construction equipment customers, our towing business customers and our delivery business customers: you gotta get good in business to get ahead.
Learn more about CFF at https://commercialfleetfinancing.com
Follow Matt Manero for insightful business tips at https://commercialfleetfinancing.com/podcast
Join us soon for Part 2 of this interview with Matt Manero, President of CFF, one of the top trucking finance companies in the nation. To get more information about truck financing and tips on becoming a stronger trucking business owner, head over to www.commercialfleetfinancing.com, and get to know the CFF team better.