Like most businesses, starting a 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 that include managing truck drivers, delivery deadlines, vehicles, goods or products, and other logistical challenges.
Develop A Business Plan
A business plan is a written document that describes in detail how a business defines its objectives and how it is to go about achieving its goals. A business plan lays out a written roadmap for the firm from marketing, financial, and operational standpoints.
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 operations seamless when you business is up and running.
Create A Name For Your Trucking Business
It’s recommended to come up with a memorable name for you company. Once you’ve chosen the name be sure you secure a domain name for your website. It’s important to take the necessary legal measures to avoid conflicts regarding your brand name.
Secure Funding & Financing For Your First Truck
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 your truck(s), permits and licenses, insurance, and state-specific fees.
A few ways to secure funding includes investors, applying for a loan or home equity line of credit, selling properties or assets, or borrowing money from close friends or relatives.
Choose A Legal Entity
When opening a new business you must decide what legal and tax structure you want. The four options you can choose from are:
- A Sole Proprietorship means you will be the sole owner and operator of the business, therefore, you will have full responsibility concerning funds, debts, assets, and liabilities.
- A Corporation creates a business entity that provides protection against possible lawsuits against personal assets, as well as business assets.
- A Limited Liability Company (LLC) limits your liability by setting a boundary between personal assets and the business assets, as well as providing many legal advantages.
- A Partnership is a legal structure between two or more individuals who join together to own and operate the business, while providing many legal advantages for all parties involved.
Meet All Legal Requirements
Below are the legal requirements that the trucking industry requires. Keep in mind, some states have different requirements and they commonly 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 semi-truck might seem economical at first, but you need to expect and save for repairs and maintenance costs.
Moreover, 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
Before 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
Market Your Business & 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.
To build a successful trucking firm, you will need to develop a good business plan, research and adhere to the many legal requirements, and purchase your assets. In addition, take advantage of the ample and profitable opportunities the trucking industry offers for a more prosperous, lucrative, and rewarding career.