Six tips to help you become an efficient Contractor!
We hope all of you are doing well and staying healthy. It’s been very busy the last few months as Buyers are swarming to take advantage of the Cares Act. What is so special about the Cares Act? The SBA will pick up the tab for your first 6 months of payments and interest on businesses closed by 9-27-2020. This is a tremendous saving for new buyers to take advantage of! With this also comes the usual wave of people who are new to this. For those that don’t know my family and I owned FedEx routes for several years in the Atlanta area. Just like any business we had our ups and downs along the way. Looking back you can oftentimes find examples of what I would have done differently having the knowledge that I have today. If one person benefits from this then it’s all worth it.
Tip 1: Start with a solid business. There’s a lot of different types of routes for sale out there. I rank routes in three main categories, excellent, good, and bad. Don’t start with the fixer-upper business as your first start. From day one you are expected to perform no matter what type of business you buy. I’ve seen a few Buyers over the years come in and try to reinvent the wheel only to get spit right back out. Start with a quality operation where the only thing that’s going to change is the name on the check! This will allow you to come in to receive training from the seller to learn the ropes. Safety and performance will lead to future opportunities for you!
Tip 2: Always hire! This is one of the secrets of the business that is in plain sight. Over the last few years, companies have emerged to help contractors hire drivers. I would highly recommend checking into these services as they can help cut through the bad applicants and land good ones. Check with your fellow contractors in your area to see who they recommend. Your drivers are usually a great source for referrals. Offer them a bonus if they help land a good recruit.
Tip 3: Take care of the trucks and they will take care of your employees which will take care of you! In my first few months, I worked for a contractor who did not take care of the drivers, trucks, or the packages. Being in this position put me, and the other drivers in bad moods. Having a preventative maintenance plan in place is key to keeping your trucks running for the long term. Always have several mobile mechanics and local mechanics in your cell phone in case they are tied up elsewhere. Do not depend on one shop to do it all. Larger operations (over 20 trucks) typically have a full-time mechanic on duty.
Tip 4: Pay a few extra bucks more than everyone else. We always paid about $50.00 more per week for drivers. Why? We didn’t have the issues that other contractors had with employee turnover. With e-commerce growth, Smartpost integration, and express integration happening the routes are going to be denser which means more stops per hour. This is going to help drivers do more stops while driving less. Some weeks it would have been nice to have an extra driver on staff to lighten the load for us, but we pushed them to stay out late. Some weeks we paid our drivers an extra $200.00 each for the extra time. Overall, this saved our bottom line! Your payroll needs to be around 50% of your gross revenue!
Tip 5: Your one and only customer, is not your friend! It’s strictly business and you should always keep it that way.
Tip 6: You never poach drivers from another contractor! Read Tip 2 again!
I hope this article was very helpful to you. We hope to hear from you all soon! We wish you and your family a Happy Independence Day weekend!