Like most businesses, starting a commercial trucking company requires a lot of planning and preparation to ensure smooth operations and success. Even if it’s a small business, the trucking industry usually involves many ‘moving’ elements, including managing truck drivers, deadlines, vehicles, goods or products, and other logistical challenges.
- Develop a business plan.
The elements of your business plan should include an executive summary, mission statement, company goals and objectives, marketing strategy, and financial plan.
Having a business plan is crucial for trucking businesses, as it helps make an operational ensuring seamless business operations when you trucking business is up and running.
- Create a name for your trucking business.
It’s recommended to come up with a catchy business name for you company. Once you’ve chosen the name make sure you secure a domain name for your website and trademark the name. It’s important to take the necessary legal measure to avoid conflicts regarding your brand name.
- Secure funding and financing for your first truck.
Typically, when starting a trucking company, you can expect to spend around $10,000 to $30,000. That should cover the costs of down payments for the trucks, permits, licenses, insurance, salary for the truck drivers, and state-specific fees.
A few ways to secure funding include finding investors, applying for a reasonable loan, using a home equity credit line, selling properties, using your savings, and borrowing money from close friends or relatives. The key is to get creative!
- Choose a legal entity.
When opening a new business, not matter the industry, you must decide what legal and tax structure you want. The four options you can choose from are:
- Sole proprietorship – It means you will be the sole owner and operator of the business with full responsibility concerning funds, debts, assets, and liabilities.
- Corporation – It creates a business entity that provides protection against possible lawsuits against personal assets.
- Limited Liability Company (LLC) – As the name suggests, it limits liability by setting a boundary between personal assets and the company as well as offering numerous legal advantages.
- Partnership – It is a legal structure between two or more individuals who join together to carry on the trucking business.
- Meet all legal requirements.
Below are the legal requirements that the trucking industry requires. Keep in mind, some states are different, and these can change and evolve over time.
- Commercial Driver’s License (CDL)
- US DOT and Motor Carrier Authority Numbers
- 2290 Tax Forms for Heavy Vehicle Use Tax Regulation
- International Fuel Tax Agreement
- BOC – 3
- Standard Carrier Alpha Code
- Unified Carrier Registration
- International Registration Plan
- Purchase your assets.
A single truck can cost anywhere from $15,000 to $175,000. The key is to get quality over quantity. Purchasing a used truck might seem economical at first, but you need to expect and save for repairs, maintenance fees, and downtimes.
If you don’t have the means to purchase a truck, leasing might be the best option for you. However, in the long run, it may cost more than owning a truck outright.
- Insure your assets.
Many trucking companies typically buy various coverage options, ensuring their entire operation is covered. But, when starting out, the most common ones include:
- Auto insurance
- Primary liability insurance
- Cargo insurance
- Passenger personal accident insurance
- Collision insurance
- Hire employees (if necessary).
At first, you will more than likely be operating your trucking business as an owner-operator. As your business grows and evolves, you’re going to have to hire some employees. Positions that you should consider adding to your business include:
- Payroll Managers
- Logistics Coordinators
- Dispatch Operators
- Market your business and build relationships.
As a business owner, you’re always going to have to wear multiple hats. In the trucking industry, when you’re first opening your business, you’re going to have to be the driver, accountant, marketer, salesman, dispatcher, secretary, etc. If you want to grow, you must market and sell. Below are a few ideas on how to make your business grow:
- Create a professional website with detailed information about your trucking business and services.
- Make marketing materials such as a memorable logo and brochures outlining the services you offer.
- Use online load boards where truck owner-operators, brokers, shippers, and carriers can post and search for loads.
- Develop business relationships by attending events and trade shows.
Don’t be intimidated by the bigger trucking businesses…start your company today!
Know that to establish a successful trucking firm, you’ll need to develop a solid business plan, research and meet the many legal requirements the industry mandates, and purchase and insure your assets as rigorously as possible. Take advantage of the ample and profitable opportunities the trucking industry offers for a more prosperous, lucrative, and rewarding career.