It’s that time of year, when we start to get our financial ducks in a row. The end of Q3 is the perfect time to look back at the past year and ahead to the future. This period provides a critical opportunity to assess performance, identify areas for improvement, and set strategic goals.
The transportation industry has endured a lot in these past few years, but a wise colleague of mine once said, “Prepare to endure, endure. Prepare to thrive, thrive.” In a fluctuating market, this mindset is crucial for navigating challenges and seizing opportunities.
As we prepare to thrive in 2025, here’s what my clients and I look at:
Taxes: In an asset-heavy industry, staying on top of taxes is make-or-break. Proper tax planning involves not just meeting estimated payments but also strategically managing depreciation schedules and asset valuations.
Have you paid enough in estimates? There will likely be a big difference between accounting reports and tax reports, depending on depreciation. Now is the time to get ahead of that – and avoid any tax-time surprises.
When we look at taxes, we also want to look for opportunities to lower our clients’ tax bill, for example saving money through retirement planning.
Operations: Do you have growth plans – overall, or for a specific segment of your business? Are you planning to stay the same or to contract? Any interest in selling on the horizon?
An audit of operations involves looking at:
Equipment: Do I have enough to meet my growth goals? Am I maximizing what I have? Is selling excess equipment a consideration? Evaluating equipment efficiency involves considering both current usage and future needs. Remember lead time on new trailers can be six months, so advance planning is key.
Personnel: Do I have the people to meet my goals? Are my people being trained efficiently, are they performing to standard, and are they remaining on the team for a good length of time?
Hiring, onboarding, and training can take 3-6 months – then you need to continue to invest in talent in order to maintain operational excellence without overdoing it on overhead.
Technology: Is my technology at a high enough level to support a larger operation? Do I need to vet new software, upgrade what I have, or maximize what’s already in place? Am I able to detect and – preferably – deter fraud? Technology assessments should include cybersecurity measures and system scalability to support business expansion.
Processes: Are my processes streamlined enough to support growth? The last thing you want is to get more business and not be ready to handle it. Review your workflows for efficiency to ensure that systems are in place to manage increased volume.
When you review personnel, technology, and processes, it gives you a better sense of where you stand with equipment – which is one of the biggest challenges you’ll face as an owner: Do I invest in new equipment now, sell off excess equipment, or make the most of what I already have? And, if you decide to buy, what about securing a loan? Can you get favorable terms – which means you have to answer yet another question: Are your finances in order?
With a huge amount of capital on the line, it’s essential to balance short-term needs with long-term goals. An owner needs to answer a lot of questions before making a decision around equipment – and those questions can best be answered with the right KPIs as well as a financial expert to help you choose and monitor them.
Here’s to thriving in 2025. Let’s navigate these challenges with a strategic approach and turn them into opportunities for growth.
If you need more assistance with annual planning, feel free to check out our virtual CFO services for transportation and logistics companies or talk with one of our virtual CFOs by scheduling a consultation below.
