Micheli Transport Strategic Business Plan · Web viewMicheli Transport is committed to self-investment to ensure the potential growth of the business. The Market . Trucking has

Micheli Transport Strategic Business Plan 1

Micheli Transport Strategic Business Plan

Stephanie J. Altpeter

Bellevue University

Micheli transport business plan/executive summary 2

Introduction

Throughout the centuries there have been many different types of freight transportation.

According to Merriman Webster, freight is defined as goods transported by truck, train, ship, or

aircraft; the compensation paid for the transportation of goods (Merriman Webster, 2018). For

the first years, goods traveled by the way of horse drawn wagons. Due to time and knowledge,

moving freight by the way of horse drawn wagons was not ideal. When the introduction of

railroads were created, businesses now had the availability to ship goods across the country in a

timely manner. From there the types of freight transportation expanded, including airplanes,

steamboat, and lastly trucking.

Goods such as clothing, food, cars, and heavy machinery are some examples of goods

transported by trucks. Trucking became a type of transportation back in the 1930’s, around this

time many developed roads were being improved. In the later years, the Interstate System was

during this time the trucking industry boomed. Today trucking is the most popular type of freight

transportation for moving goods back and forth across America.


Executive Summary for Micheli Transport

Micheli Transport is a newly started family owed freight transportation company. Micheli

Transport was established in November 2017. Headquartered in Fort Worth, Texas Micheli

Transport operates in one of the biggest trucking lanes in the United States, helping to meet the

demands of freight transportation of needed goods.

Our Vision & Mission Statement

The vision of Micheli Transport is to be one of the largest U.S. preeminent logistics and

data insight companies for various types of freight distribution needs. The goal of Micheli

Transport is to expand our services and freight support to a larger area in The United States.

The mission of Micheli Transport is to take freight transportation and customer service to

a new level with using the various modes of technology innovations. Micheli Transport is

committed to self-investment to ensure the potential growth of the business.

The Market

Trucking has always been the most popular source of freight and product movement

within The United States. In order for consumers to have the ability to buy products and

resources it is required to move these items from the manufacturer to the distribution center.

Freight transportation is a need that will never go away; there will always be a need to move the

product to the consumer. Currently, there is a shortage of freight trucking companies and drivers,

this shortage is due to the new DOT Electronic logging device requirements. Micheli Transport

Truck Company, is a newly startup company that carries very few overhead, owns their

equipment, invests in new innovations and is well-prepared to meet the needs for freight

distribution today and tomorrow.


Our Services

Micheli Transport carries the value of successfully moving products and resources from

the manufacturer to the distribution centers for consumers. Micheli Transport offers different

types of freight services to try to meet the customer’s needs including, competitive cost to

customers, online portal for all customer freight requests, logistical planning, truck tracking, and

invoicing. Micheli Transport also offers different types of trailers such as flat bed and covered

trailers.

Competitive Advantages

There are many different trucking companies across the United States to achieve one

common goal to move goods needed by consumers safety and on time. There are various types

of competition within trucking. Micheli Transport carries lower overhead and minimal

equipment on the roads, reducing overall costs and liabilities. With the continuous investment of

innovations, Micheli Transport is committed to excel in customer service and advantage the

trucking industry. Currently, there is a supply and demand issue with trucking, most new

companies and existing companies have plenty of freight awaiting to be moved.

Financial Projections

Based on the size of our market and our servicing area, our sales projections for the

second year are $1,645,000 million dollars. We project a growth rate of 10% per year for the first

three years. The salaries for each of the co-owners is $48,000. On start-up we had four

employees and expect to hire two more within the 2019 fiscal year. Already, we have service

commitments from over 20 clients and plan to aggressively expand our client base through

various forms of marketing, including website, social media, and direct mail advertising.


Business Risks

The bigger risks that Micheli Transport can experience include both internal and external

variables. The internal risks include unforeseen events, such as employee accidents and

incidents. Major equipment loss or repairs can also carry a huge risk factor within Micheli

Transport. Another risk is financial, Micheli Transport has to be proactive on who they sell their

services too to avoid any bad debts loss.


Micheli Transport Strategic Business Plan

Market Assessment


within The United States. In order for consumers to have the ability to buy products and

resources it is required to move these items from the manufacturer to the distribution center.

Freight transportation is a need that will never go away.

The truck freight market is anywhere in the continental United States. The products being

transported can be hauled in either a cover van trailer or a flatbed trailer. Products can range

from anything needed to be transported in a covered environment or even many roofing products

such as shingles on a flat bed. Since the need for trucking is in such high demand, most new

companies such as Micheli Transport will be making money that is currently being left on the

table due to the shortage of reliable vendors. There will always be competition in the freight

market. Most is freight loads are awaiting shipment due to truck availability and cost. Since there

is a shortage in trucking manufactures are paying the increased price for trucking to ensure they

are getting products are getting into the hands of the consumers. The current situation highlights

the need for Micheli Transport, a company focused on improved logistics based upon scaled,

rates, and technology.

Within the last year a major change within innovation in the freight market has made

some challenging situations for not only companies but for the drivers as well. For many years

commercial drivers logged their hours on paper logs. New technology GPS/ELD logging units

are now required for all commercial trucks. Micheli Transport has invested in these units in all

equipment owned. With many companies not being able to invest in the new innovation of

trucking and/or secure commercial drivers that want to follow the federal regulations the market


for trucking is everywhere. Winning market share for a smaller trucking company with little over

head and overall costs is not a hard thing to accomplish. Freight rates are at an all-time high and

products are not being moved as quickly as needed due to the shortage. In order to obtain and

maintain customer meeting the product demands and delivery timeline is imperative. Micheli

Transport will focus their customer prospects on companies that carry dedicated shipping lanes

and focus on developing relationships with as many manufactures as possible. This will allow the

demand and need of Micheli Transport to deliver on time quality products that are in need.

Competitive Assessment


within the United States. In order for consumers to have the ability to buy products and resources

it is required to move these items from the manufacturer to the distribution center. There are

many different trucking companies across the United States to achieve one common goal to

move goods needed by consumers safely and on time. Competition varies between companies

when it comes to trucking. The smaller companies similar to Micheli Transport, tend to have

lower overhead and not as much equipment on the roads. Smaller companies do not have the

ability to haul as many loads as the bigger competition. The bigger companies involve a large

amount of overhead and equipment on the road. The bigger competitive companies expand their

services to reach the entire United States, this is due to the amount of equipment and overhead

these companies have.

One of the biggest freight companies that carries a lot of local competition is TMC. TMC

a locally transportation company from Des Moines, Iowa, was founded in 1972. TMC is known

as one of the industry’s premier flatbed carriers. TMC offers flatbed freight trucking that will

haul loads that do not need to be stored inside and/or refrigerated (TMC, 2018). TMC’s


consumers are the same as Micheli Transport, any company that needs to have freight hauled.

One of TMC’s strengths is the amount of amount of flatbeds on the road for the company. One of

their weaknesses is that since not all equipment is company owed, they hired owner operators

that own their own equipment to haul loads under the TMC name. The issue with not running

their own equipment is the uncontrolled variable of not having the correct EDI units and/or the

truck will fail the DOT inspection requirements, placing TMC at risk for violations and/or

expenses. With Micheli Transport all equipment is company owed with controlled EDI units,

continued trucking maintenance and consistent driver training. Companies might hire TMC

instead of Micheli Transport due to price, with not having all vehicle expenses with hiring owner

operators, TMC can be more aggressive on their charge of freight to the consumer than Micheli

Transport.

The second biggest freight company that carries a lot of local competition is Maverick

Transportation. Maverick Transportation a transportation company from Kansas City, Missouri,

was founded in 1953. Currently, Maverick operates over 1,500 units which haul steel, building

materials, flat glass, and/or temperature controlled products (Maverick, 2018). Maverick is very

similar with shared aspects of TMC. One of Maverick’s strengths is they offer different types of

hauling trailers not just flatbed. Van trailers also known as covered trailers allow for products to

be hauled covered protected from outdoor elements and have the ability for temperature control

units. Having diversification allows Maverick Transportation to haul different types of consumer

products. According to Fleet Owner, “Diversification seems to be the saving grace for many

large truckload carriers that used to rely solely on long haul services for the bulk of their

business”, (FleetOwner, 2019, para. 2). One of their weaknesses is the amount of trucks to haul

freight to the locations they deliver. Maverick Transportation delivers in the United States,


Canada, and Mexico. Having this large of a territory within unlimited amount of equipment

reduces the chances of obtaining local hauls to reduce operating expenses. Micheli Transport also

has the diversification of equipment for all hauling needs and primary focuses on local loads

within the United States.

Market Strategy

One of the best ways to market a company and promote products and services is the use

of Social Media. Social Media is one of the most popular ways for marketing use to increase

one’s business growth and consumer engagement. According to Moriuchi, “When technology is

paired with culture, it is inevitable that consumers constantly change their attitudes toward

consumption to adapt to current tends”, (Moriuchi, 2016). Using social media to promote

Micheli Transport will allow increase brand awareness, improve the company’s return on

investment with cost savings, create a loyal fan base, and have a better understanding on what is

happening with the industry. The initial market targets will be large manufactures that are in the

needs of freight transportation. These companies will be located in all shipping markets. The

overall goal is to be hired for daily, weekly, or monthly dedicated lanes of shipping. Within the

next six months Micheli Transport will target all manufactures and/or distribution centers to

achieve the most freight opportunities possible. The use of social media will allow Micheli

Transport to stay in touch and engaged with customers, showcasing equipment, staff, and

services.

Another cost effective way of marketing strategy is video tutorials. Video tutorials is a

great way to showcase Micheli Transport on our services. This is also another way to showcase

our staff and our new age equipment used to haul the needed freight. Micheli Transport tutorials

take teaching customers to a new level, these tutorials answer questions such as, why they should


be hiring Micheli Transport for service. The better Micheli Transport video tutorials are, the

more value we are providing, and the quicker we will boost our company and sales. The video

tutorials will not only be available on the Micheli Transport website, they will also be

downloaded to one of the largest search engines in the world, YouTube. The labor cost of video

tutorials will be minimal, since they will be posted on the website and YouTube. All Micheli

Transport videos will be completed in house by the employees.

Search engine optimization is the process of affecting the online visibility of a website.

Search engine optimization is a special technique that custom tailors websites through the

inclusion of keywords and manipulation, to position the website to receive high search ranking

against competitors (Dewey, 2017). Search engine optimization is a great internet marketing

strategy that many companies do not think of when creating their website. Micheli Transport

invested in making our website top of the line to compete with our competition. Many companies

fail in search engine strategy as when searching for freight carriers or freight transport, not the

same companies were always listed. Micheli Transport with the custom design of our web site

will always be listed in the top five searches when using certain keywords pertaining freight or

transportation. Micheli Transport and search engine optimization will allow existing and

potential customers locate our website easily, read successful and boosting reviews, and learn

why Micheli Transport is the best in the business.

Marketing Plan

Building your brand is one of the most important aspects of building your business.

Developing and executing a marketing plan will allow Micheli Transport to take our business to

the next level. One of the key benefits of developing a marketing plan will help us focus on our

resources and help plan for immediate and future business growth. The marketing plan for


Micheli Transport will help our company understand what different factors that will affect the

success of the company. Also the use of marketing models can help managers and businesses to

make better decisions (Eryigit, 2017).

There are many different types of marketing that can help enhance the success of the

Micheli Transport. The direct marketing types Micheli Transport are using are internet

marketing, social media, and email. Using the internet marketing will define and help to target

keep customers within our market, we will also be able to use this marketing to understand the

customer’s needs. Competitive research on other trucking companies will allow us to evaluate

what other company’s strengths and weaknesses are and what we can do better within Micheli

Transport. Using social media and direct email contact allows Micheli Transport to position the

brand and showcase our services within our target market of customers. Developing a marketing

plan helps Micheli Transport conduct our day to day business awhile planning ahead and

sourcing more potential customers.

Operational Requirements

Currently, Micheli Transport is a small freight trucking company that carries very little

operational costs and overhead. Current office is a home office. The Micheli Transport home

office supports all of the internal functions of the company as well as storage for our trucks,

trailers, and other equipment. Currently, Micheli Transport has four employees, three drivers and

one office manager. Micheli Transport has three trucks, one van truck with 53’ trailer and two

trucks with 53’ flatbed trailers.

The biggest expense within Micheli Transport pertains to the trucking. Each truck and

trailer are leased and each truck and trailer have a monthly maintenance plan to ensure the

required maintenance is being conducted. With Micheli Transport being located in the state of


Texas, each truck and trailer carries a state inspection requirement in order to obtain and

maintain yearly equipment registration. Other yearly licensing costs include IFTA stickers, which

is the international Fuel Tax Agreement that allows trucks to operate between state lines and in

more than one jurisdiction. The UCR program is the yearly registration of interstate and/or

international commerce whereas the business pays state and annual fees based on our fleet.

Daily Operations

Since Micheli Transport only has four employees currently, mostly all of the daily

operational responsibilities falls on the office manager. The office manager works all of the

coordination of loads being moved, dispatches and monitors the freight pick up and deliveries.

The office manager handles all company payroll and customer accounts receivables and has the

key role of ensuring the trucks, trailers, and drivers are always moving. The drivers, driver and

ensure all loads are picked up and delivered in a timely fashion to the receiving customers. As

Micheli Transport grows with the demand of business, Micheli Transport will add more overhead

such as office personal and drivers to increase the profits for the business. Micheli Transports

current weakness is not having enough equipment on the road to meet the demand of the freight

that needs to be moved. It is important as a small startup company we focus on the overall

business including maintaining smooth operations and happy employees.

Growth Budget

Micheli Transport follows a fiscal year system, this system starts on November 1st and

ends on October 31st each year. Micheli Transport carries a company P&L and cash flow budget

to guide the business with expenses and income (Schakel, 2018). Budgets set the revenue and

cost target that Micheli Transport will have to meet in order to understand the projected profit


margins and returns. Each employee within Micheli Transport has a key role of helping maintain

a successful budget for the fiscal year.

Micheli Transport was a startup company and remains a family owed company. The

startup costs were saved to ensure money was not tied up with loans and could not delay the

growth and daily operations. The first year of the business was focused on keeping operational

expenses down, while moving as much freight as possible not only to pay for needed expenses

but to invest profits in order to grow the business. The basic elements within the Micheli

Transport growth budget is sales and operating expenses. The sales are in amount of hire loads of

freight being moved. One key problem solving aspect to maintaining budget is to ensure an

increased amount of sales of services coming in, sales solves every financial issue within a

budget. Since Micheli Transport is a family owed company with an estimated growth of two

more pieces of equipment and employees each year, Micheli Transport’s P&L and budget are

simpler than a National Company and/or competitor. Micheli Transport’s operating expenses

include the following:

Office Expense, including utility, telephone, marketing, and general office supplies

Salary & Wages

Vehicle Fuel Expense

Vehicle Rent & Lease Expense, including repair, maintenance, licensing, insurance

Figure 1.1 is a sample of the Micheli Transport budget for fiscal year 2019. The budget below

reflects, the estimated amount of sales monthly for 2019, as well as the estimated operating

expenses listed above. Figure 1.1 also breaks down the overall estimated EBITDA for the

company. Figure 1.2 is an estimated monthly pie chart of expenses. As business increases some

expenses increase as well.


Figure 1.1

Figure 1.2


Organizational Structure

Businesses require structure to grow and be profitable, having organizational structure in

place helps management identify and add more talent for the benefit of company (Bohyun,

2018). Micheli Transport is a small family owned company with only four employees. Even

being a smaller company Micheli Transport still follows an organizational structure to ensure all

operations are completed and successful. Figure 1.3 shows illustrates the organizational structure

for Micheli Transport including future positions.

Figure 1.3

Job Description Roles

The management team within Micheli Transport consist of two people, the President and

the Executive Assistant. The President and Executive Assistant both are college graduates and

carries heavy experience in the distribution and logistics fields. Since the President is also one of

the companies’ driver, most of the key responsibilities fall on the Executive Assistant. Without

the Executive Assistant in place, Micheli Transport would not run as effectively. “Managers are

utilized in every sector, and the business model relies on their leadership and ability to

operationalist the management structure”, (Smith, 1978 para 8). The Executive Assistant carries

all of the following responsibilities:


Daily Operations including securing loads and daily dispatching of trucks

Invoicing all customers for load transportation

Balancing Finances

Completing all H/R responsibilities including payroll, insurance, and hiring

All sales and marketing areas

Coordination of truck maintenance/repairs, fueling, proper licensing, insurance

Future responsibilities and jobs will be added once Micheli Transport’s growth exceeds

its goal for the year. With more demand in freight movement, Micheli Transport will be able to

expand the trucking equipment as well as drivers. When this change happens, Micheli Transport

will also hire an office manager to help reduce the work load off the Executive Assistant to

where they can focus more on increasing company sales and growth.

Risks

Due to Micheli Transport being a newer start-up family business, Micheli Transport

carries higher risks assessments. According to Visser, “Family business risk is the probability of

loss inherent in business operations, including the environment that impair the business’s ability

to provide return on investment” (Visser, 2018, para. 8). The bigger risks that Micheli Transport

can experience include both internal and external variables. The internal risks include unforeseen

events, such as employee accidents and incidents. Major equipment loss or repairs can also carry

a huge risk factor within Micheli Transport. The next biggest risk is financial, Micheli Transport

has to be proactive on who they sell their services too. Many big companies are set up to pay

within terms, if these terms are not meant, this equals a loss of profit for the business.

In order for Micheli Transport to be successful, Micheli Transport must prepare for

potential risk situations. First off, Micheli Transport needs to be cash conscious, having enough


cash flow saved and coming in on a regular basis (Angerer & Niemand, 2018). Developing this

cash conscious plan, allows money to be set side in reserves and not creating a contingency plan.

Second, to insure against specific risks and update and/or change insurance when the business

does. Making sure the business is well insured and protected is a huge asset, not being well

insured for the uncontrollable can shut a business down. Third, use or hire a company to run

credit checks on the hiring companies in order to give and maintain the credit given. Micheli

Transport understand the potential internal and external risks to the business. Being prepared for

these risks allows Micheli Transport to be one freight load ahead.


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Documents

Micheli Transport Strategic Business Plan · Web viewMicheli Transport is committed to self-investment to ensure the potential growth of the business. The Market . Trucking has