Are you looking for a rewarding business venture to explore? The trucking industry is booming and has a lot of room for more companies! According to the American Trucking Association, the trucking industry was worth $800 million in 2019 and the need for freight is not dwindling any time soon.
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Getting a Head Start With Your Trucking Business
With trucking being a life force to keep trade going and the economy afloat, running your own trucking business is something worth considering today.
If you are wondering where to start, you’re in the right place. Here’s a detailed guide on all the steps you have to work on to establish a trucking company.
Identify Your Niche
Yes, you can open a generalized trucking business. But most of the time, a company would stand out more if they find a specialization to focus their expertise on. Some niches you might consider in trucking are:
- Tanker drivers
- Flatbed drivers
- Refrigerated freights
- Freight haulers
- Local or regional drivers
Whatever niche you decide on, think about what’s unique for your location, the expertise you want to share with people, and what you are truly passionate about.
Create a Business Plan
Once you’ve decided your niche, it’s time to put your ideas down into a concrete plan. A well-prepared business plan will be your guide towards success. Your plan will be your blueprint to what services you will provide, the value you can give, and what you want to be as a company.
A business plan doesn’t have to be complicated or flooded with details. But having one ready can protect you against costly mistakes. Some details you should have on your business plan are:
- Executive Summary – Services offered, target audience, management team, competitors, financials, and funding requirements
- Opportunity – Problems and solutions, competitive analysis, and risks
- Marketing and sales plan – Pricing, marketing channels, and operations
- Management team – The people behind the company and your organizational structure\
- Financial plan – Expenses, forecast, cash flow, and balance sheet
Hire an Attorney
The trucking industry comes with various laws and regulations you must be familiar with. Some guidelines you have to know come from the Department of Transportation (DOT) and the Federal Motor Carrier Safety Administration (FMCSA). Admittedly, they can be overwhelming, so having an expert working with you will surely be a good bonus.
A lawyer with experience in the trucking industry can guide you with safety compliance requirements as well as the best practices you would need in establishing your trucking business.
Choose Your Business Structure
The four types of business structures are sole proprietorship, partnership, limited liability company (LLC), and corporation. Each comes with their own requirements, advantages, and disadvantages. Your choice in this matter can have a major effect in the legal matters of your business.
Most trucking companies opt for the LLC structure because it limits liability but it still comes with taxes and flexible benefits similar to partnerships.
Acquire Business Permits and Licenses
Before you open the doors for your trucking business, there is a framework of licenses and permits you have to deal with. There are state, county, and local government requirements to satisfy, so the trucking company will be legally allowed to operate.
As an owner-operator, here are some things to process:
- Commercial Driver’s License (CDL) – Learn about the state-specific guidelines on CDLs from the Department of Transportation, Motor Vehicle Administration, or Department of Motor Vehicles.
- USDOT Number – Obtain this by registering with the FMCSA.
- Motor Carrier (MC) Number – The MC Number, also known as Operating Authority, can be obtained from the FMCSA.
- International Registration Plan (IRP) – This tag is required for trucking companies that plan on operating in more than one state.
- International Fuel Tax (IFT) Decal – This decal is provided by the DOT for freight drivers that haul loads in more than one state. Moreover, the IFT decal is a requirement for interstate trucking.
- Unified Carrier Registration (UCR) – Get this as a verification for the active insurance coverage for your trucking business.
- BOC-3 Form – If you want legal coverage wherever you go, this form must be filed in the FMCSA.
Get Trucking Insurance
Another essential thing to have for your trucking company is commercial truck insurance. There are other policies you might also consider including the following coverages:
- Cargo Insurance – Protection in case cargo gets damage or lost in transit
- General Liability Insurance – Protection against damage to a person or property because of crashes, errors, or accidents caused by the company vehicles
- Physical Damage Coverage – Covers costs for your vehicle in case of collision, crashes, overturns, or rolls
- Medical Payment Coverage – Covers medical costs for the driver and everyone in the vehicle in case of an accident
- Trailer Interchange Coverage – Covers costs for non-owned trailers in case of damages through collision, fire, theft, explosion or vandalism
There are insurance coverages that are required by the state. You can get basic policies or you can add on additional features you can include for better and stronger protection for your employees and your company. So, before you partner with an insurance provider, make sure you review which policy offers the best coverage that matches your current business needs.
Set Up Accounting and Bookkeeping
Now if you want your business to last long, one thing to master is handling the financial aspect. It is important, especially for logistic companies, to have a system to track income and expenses.
If you’re up for learning a new skill, there are online tools available for bookkeeping and accounting. However, you can also hire an accountant to crunch the numbers for you and a bookkeeper to keep the records organized.
Finalize Your Budget
Before the revenue comes in, some investment on your end is required. This is why you need to get funding activities ready, like applying for business loans, if you don’t have enough capital on hand.
Here are the initial things you need to spend on as you prepare to start your business:
- Brand Design
- Licenses and Permits
- Commercial Truck Insurance
- Property Rental
- Equipment Purchase or Lease Agreement
- Phone and Internet Installation
- Office Supplies
- Marketing and Advertising
Aside from these things, there are recurring expenses you have to pay for every month. Here are some of them:
- Fuel for the Vehicles
- Vehicle Repair and Maintenance
- Utilities Expenses
- Software Subscription Costs
- Bookkeeping, Accounting, or Legal Services
- Employee Wages
- Taxes, Licenses, and Permit Renewals
Develop Your Brand Identity
Even as a small business, it is important to start with branding ready. Not only will it show that your business is memorable to the target market, it is also helpful to build credibility as an industry expert.
A company brand serves as the public identity of your trucking business. Initially, what you should prioritize is embodying the most essential attributes you want to be linked to your business.
In your branding strategy, consider what personality you want to project, what type of people or businesses you would partner with, your edge against your competitors, and the things that you value the most. Let this influence your brand name, the logo, website design, and all of your business peripherals.
Build a Presence Both Online and Offline
Now that everything is set, all that’s left is to let the world know about your services. In today’s business world, the best move is to start online.
If you want to reach the most customers, you should practice digital marketing and start with your website. Aside from a professional web design, ensure that your site has a competitive marketing copy with your ideal customer in mind.
You can also maximize other strategies like social media marketing, email pitches, and digital advertising.
In the real world, on the other hand, take the time to network! It’s time to sell yourself and your vision for your company. Get your elevator pitch ready and talk to possible clients—as many as you can. Be ready to deal with objections and fight through the obstacles in getting on clients.
Follow Compliance Requirements
Finally, make sure you’re staying compliant with trucking requirements at every step of the way.
As you operate a trucking business, there are many things to stay updated on. These include government requirements like filing taxes and renewing licenses. You would never want to lose your good standing, paying costly fines from missing deadlines—or worse, having the state revoke your operating license.
Though the process of starting a trucking business can be nerve-wracking, it is also an exciting adventure to pursue. Take the steps one at a time, so you won’t be overwhelmed, and you are good to go! Don’t be afraid to ask for help from experts and enjoy the entire process. The rewards, after all, could be beyond anything you have ever imagined.
We hope this guide was able to help you have an overview on the process of establishing a trucking company. Do you think we missed anything? Reach out and let us know! Do you want to discover more about trucking businesses? Check out eight cool facts about truck driving from Assured Standard for more!
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