The Business Of Independent Service Provider Contracting

Begin With The End In Mind - CSP Best Practices Series

Posted by Ben Weil on Sep 19, 2021 1:15:00 PM

Begin With The End In Mind

Image by Daniel Tadevoseyan

In a recent blog post, we adapted Stephen Covey’s habit of Be ProactiveⓇ, into a best practice of running a FedEx Ground contracting business. The key point being that success is consciously controlling what you can and not blaming what’s beyond your control for hindering your vision.

In this blog post, we’re adapting Covey’s habit of Begin With the End in Mind Ⓡ . This is defined by starting each task, each day, and each project with a clear vision of your destination. Being financially successful doesn’t happen by chance. Success is not only focusing on what looks good, it’s focusing on what really matters.

What Does the Perfect Day Look Like?

Most CSP’s would agree that a perfect work day would be achieving a service level of 99%+, or better. Plus, all their drivers who were supposed to show up did so on time. Then, they all arrived back at the terminal at a reasonable hour. Oh, and there were no accidents.

That’s a good place to start when imagining a perfect day, but it’s not a complete day without answering the profitability question.

Is your business - right now - performing at the level that you want? Be honest with yourself. Sometimes we avert our gaze from inconvenient realities. Success is not success if it involves unsustainable expenses.Success, it depends on you Hand writing with black marker on transparent wipe board

If the path you're walking isn’t profitable, every step is leading you away from your dream of success. Our business coaches work with Contractors who can see reality, but could use another set of eyes to guide them back to the path from which they strayed.

This best practice involves having a vision that’s not yet a reality. It’s seeing what others can’t yet see. Without a vision, it’s the blind leading the blind so to speak.

What Should the Perfect Day Look Like?

A perfect day in the world of FedEx Ground contracting is one that is both profitable and repeatable. This occurs when leadership has the knowledge to adequately forecast the correct number of routes needed each day. This means that driver compensation is around 45%, or less, of the revenue generated by that route. This, by the way, includes a balanced dispatch and understanding of DRO engineering among other factors.

Additionally, drivers need to be clocking in and out when they work. Although fewer CSP’s today continue the traditional way of paying drivers by the day, various forces are aligning that will eventually make the practice obsolete.

First, state legislators routinely create more complex and punitive employment laws. Secondly, attorneys understand that businesses with poor documentation are the most vulnerable. And finally, Federal government agencies are continuously adjusting their compliance rules. So, you must begin with a systematic approach to timekeeping if the end goal is increasing profit margins.

How About Safety?

Employing a robust safety program is crucial to positive outcomes. The quickest way to lose a FedEx Ground agreement is a poor safety record. You must ensure that your drivers are up to date with their required safety lessons. If the end goal is zero accidents, then you must begin with holding your drivers accountable for completing their safety lessons. Monitoring compliance not only promotes accountability - it will ensure that everyone on the team arrives home safely.

business documents on office table with smart phone and laptop computer and graph business with social network diagram and two colleagues discussing data in the backgroundPlus, retaining that safety documentation is critical. Placing multiple trucks on the road every day for hours means the likelihood of a driver running into a fixed object is greater than zero. Therefore, documentation is the beginning if the end goals are profitability and safety.

 

Other Components of Beginning With the End in MindⓇ

Changing gears, many CSP’s begin their dream with the vision that their operation will essentially run itself. While a lofty goal, the reality is that achieving a dream generally requires substantial effort. Similar to great athletes - the best operators make it look easy. So, if your end goal is to make it look like the business is running itself, begin with putting systems and processes in place that will make it appear that way.

Finally, begin with having an exit plan in mind as soon as you purchase a business. Maybe that’s the ultimate in having an end in mind. Keep in mind that exit doesn’t necessarily equal selling the business. It may mean passing the business along to the next generation, a loyal manager, or a partner. Any number of scenarios may be the intended end.

Document your vision and include the decision points involved along the way. It’s easier to see the vision if you know what guideposts you need to pass along your journey. You may need to adjust your strategy, but don’t give up your vision.

What’s your vision and how do you plan to arrive there? Be honest.

Topics: Business Results, Management, FedEx Ground, Business, Investment, Metrics, contractor, Profit, leadership, consulting

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