Roughly 45% of businesses don’t make it past the five-year mark. One of the most common reasons for this failure rate? A lack of business funding.
Now, this isn’t to say that money isn’t available—the chances are that if you’re got the fundamentals of your business laid out, the money is out there.
Ultimately, it comes down to how you manage to acquire it. And that’s exactly what this article is going to cover.
How I Raised $1.07 Million for My Trucking Business
2020 showcased a remarkable accomplishment for Pierre Laguerre, the founder of Fleeting, who became the first Black man to raise the maximum amount possible ($1,070,000) through crowdfunding opportunities in the span of 12 months.
Fleeting is a platform that connects companies with experienced and qualified CDL drivers. Since trucking is a critical part of the supply chain, which constitutes the backbone of the economy, many investors quickly took the chance to weigh in.
How to Raise Capital for Your Business
When it comes to the trucking industry, entrepreneurs might find that they need more than just dedication. Starting a trucking business is an excellent decision because the trucking industry isn’t going anywhere, but it often always requires high capital investment for startup and operations.
That said, there are still several ways you can finance your business:
1. Use Equipment Lenders
With a well-managed business plan and some existing capital, you stand a higher chance of getting financing from equipment lenders. Many lenders provide tailored solutions that you can use for your trucking business, which will eventually help you bring in more investors.
2. Crowdfunding
When compared to other methods of raising capital or financing a business, crowdfunding is definitely a newer option. Despite being new, however, it’s quickly risen in popularity as a way of funding, and we’re no exception to this.
Crowdfunding functions much like a loan, pre-order, or investment—just from several people instead of one person or entity. As an entrepreneur, it will be your responsibility to sell your business on the crowdfunding platform, including your goals, plans, amount of funding required, etc.
3. Enter a Franchise Agreement
Entering franchise agreements with interested parties can be extremely useful to grow your business quickly. This arrangement allows other owners to use your name for their business while paying you a franchise fee as well as a portion of their profits.
4. Look into Freight Bill Factoring Financing
A problem you’re likely to run into in the trucking industry is delayed revenue. In some industries, this may not be a problem, but a trucking business will rack up operational costs that need to be paid off.
If you’re just starting out and don’t have an immediate cash flow, freight bill factoring financing can help. Freight factoring companies essentially buy your invoices for immediate payment, and then wait to be paid by the clients.
Ultimately, there are several ways to grow your business, depending on your needs.
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