How to start a trucking company? 10 Best checklist
While learning How to start a trucking company various factors need to be taken into account. What are the first steps in starting a trucking company? Including hiring employees, deciding on a business structure, and securing financing. All you need to start a trucking company will be explained to you step-by-step so that you can make informed decisions.
Many people may not think about trucking when they think of the booming business in America. It’s easy to see how much demand there is for trucking and hauling services just by driving down the road.
A trucking firm may be the proper fit for you if you’ve considered starting your own business and enjoy driving and logistics. Trucks transport about 75% of all freight in the United States, implying that trucks—and, more crucially, trucking companies—are always in demand.
How to start a trucking company in 10 steps
Step#1: Write a business plan
If you’ve made it this far, you’re likely ready to take the jump and start your trucking company firm. Now that you’re convinced, let’s look at establishing a trucking company by examining the important chores that must be completed before you hit the road and join a massive convoy.
Step#2: Register your business
After establishing a sound business plan, the next step in starting a trucking company business is to register your firm with any city or county government that requires it.
Step#3: Select a business entity
Before sending in your application, you should look into the different kinds of companies you can work for. Each business entity has its own rules about personal liability protection, taxation, ownership, and other technical details. Look into limited liability companies (LLCs) to protect your assets if you want to start a one-person trucking company business that you own yourself. If you want to start a business with a partner, you should consider the different types of limited liability partnerships (LLPs) and corporations. There are other ways to set up a business, but it’s best to start with these two and decide if you need to try something else.
Even though it’s a touch of paperwork-heavy, establishing your firm is very simple. Typically, all you’ll need is some supporting documentation regarding the company’s principals and founders, tax information, a general business agreement, and additional materials about your soon-to-be business (which will vary depending on the state you’re registering in).
Step#4: Take a business name
Choose a unique business name in addition to registering your company. Your business name communicates your brand, specialty, and personality to potential clients.
Make sure your company name isn’t already taken. Check with the minister of state and the U.S. Patent and Trademark Office to see if the names you’re thinking about are available once you’ve narrowed down your list.
Step#5: Business licenses and permits
Trucking company businesses have their challenges and risks, so make sure you have all the licenses and insurance policies that your state requires. Most, if not all, the government will require you to get a business license if you want to base your business there. You will need to set up these rules and permissions before sending out your first shipment.
An International Registration Plan is another license you must obtain. This is necessary if your truck weighs more than 26,000 pounds and crosses state lines. This allows you to drive in all 50 states and certain Canadian provinces. Because state restrictions differ, review your state’s standards to learn exactly what you need to know to stay on the right side of local laws.
Public liability insurance, bobtail insurance, cargo insurance, and physical damage insurance are some of the business insurance you’ll most likely require. It’s always good to check with a startup lawyer who has worked with other trucking company if you’re concerned about whether you’re entirely complying with your business needs. Their knowledge ensures that you follow all legal requirements before launching your transportation company.
Step#6: Choose the right truck
When you start a trucking company business, your commercial vehicle will be one of your most important assets, so make sure you buy the right one. Keep the following things in mind when choosing your truck:
- Your preferred cab style
- Comfort level
- Weight limit
- If they have U.S. dealerships
- New vs used
- Local or long-distance
Before buying a car, you should take it for a test drive. But if you want to narrow down your choices, Freightliner, Kenworth, and Peterbilt trucks can meet most of your needs.
Step#7: Buy vs Lease
The decision to buy vs lease is based on your purchasing power as a small business owner. Additionally, each path has its own set of pros and downsides. You don’t have to worry about making monthly payments when you purchase a truck outright. You can also trade in your truck in the future with the built-in equity. Of course, depending on whether you buy new or used, this implies a greater down payment—typically 10% to 25%.
You do not own your truck when you lease it. You can’t use the equity to buy a new truck because you have to make regular payments. You must also follow certain rules, such as maintaining its condition and adhering to mileage limits. However, there are certain benefits to leasing, including that the lessor will generally cover your maintenance costs. Whether you buy outright or lease, you’ll almost certainly need to find a way to pay for your purchase.
Step#8: Secure startup funding
As has already been said, buying a business truck is not a cheap investment. Because of this, you’ll almost certainly need start-up money to get your trucking business going. In addition to the options below, you might want to open a business bank account and credit card.
Create a financial management system
As you begin to incur expenses, your business will require a substantial sum of money (equipment, labor, supplies, fuel, utilities). Trucks can cost upwards of $80,000, plus additional insurance, legal fees, and upkeep. Hire the best tax attorney and bookkeeper you can afford to oversee your accounts once you’ve secured funding. Use QuickBooks or comparable accounting software from Intuit. You might wish to consider invoice factoring to get paid faster and decrease administrative paperwork like invoicing and collections.
Step#9: Hire staff
If you want to extend your business beyond an owner-operator operation, you’ll need to hire staff to help you. Depending on your size and income goals, you may need to hire more people like:
- Managers of accounting or payroll
- Personnel in sales and marketing
- Coordinators of logistics
- Administrative assistant or receptionist
Some trucking company firms prefer to outsource some of their administrative, accounting, sales, and marketing initiatives or wait until their workload demands an in-house workforce.
Step #10: Monitor compliance
As a business owner, it is your job to comply with all applicable rules and regulations. This includes filing quarterly tax reports, renewing CDLs, and remaining informed about state and national trucking business regulations. To avoid liability, brokers prefer to hire and operate with carriers with current regulations. To succeed as a truck driver, you’ll need to keep track of compliance and stay current on rules.
Apart from the elements specified in the legal requirements section, you must also ensure that your business follows the legal requirements for:
- OSHA safety regulations
- Hours of service (HOS) regulations
- Repair, Inspection, and maintenance logs
It can be a wonderful way to make a living if you build a profitable trucking company. However, as a new operator, it may take some time. Don’t allow the paperwork or credit restrictions to deter you from starting your own company. Due to driver and truck limitations, more owner-operators are looking for financing and leasing solutions, even if their credit isn’t great. The trucking business will be in high demand as more people purchase online and want products delivered, creating the potential for you to earn more money.