The US trucking industry is a $700 billion industry and 71% of freight is moved by truckers.
If you want to start a trucking business, the above statistics look pretty attractive, but how do you tap into these numbers? How do you go about starting a trucking company?
You may or may not have experience in the industry already and either way, you’re going to need further information. There’s a big difference between driving a truck as an employee and owning a trucking company.
Continue reading this article to learn everything you need to know about how to start a carrier business.
How Do You Want to Do Business?
There are a lot of things to think about when you’re starting a trucking business. While trucking businesses can be highly profitable, there are matters of safety, logistics and many other things to think about.
The first thing you need to figure out is how you want to do business.
Do you want to be one of the drivers? Or do you want to have other people driving trucks and you are the one overseeing everything?
Owner-Operator
One of the most common ways to start a trucking company is through the method of being an owner-operator.
When you’re an owner-operator, you own the truck you’re driving and you drive that truck. If you aren’t driving, you don’t make any money. You’ll need to get a commercial driver’s license if you want to drive your own truck.
Using Subcontractors
There are plenty of truck drivers that own their own trucks and have to insure them and maintain them but don’t have their own business. You can use these subcontractors to deliver your shipments but when there is a high demand, you might find it difficult to find drivers to deliver your cargo.
They don’t have to do business solely with you, so they could be busy with jobs from other companies.
You don’t have to provide benefits for these drivers but they might require higher payment so they will take the jobs.
Using Employees
If you want to have a little more control over how things are done and when things are done then you might opt to have employees.
When you have employees, you own (or lease) the trucks they drive, have to insure them and have to keep up maintenance on them.
While you’ll always be sure that you have someone to drive for you, you’ll need to keep your employees busy or they are going to go work for someone else that can.
If you have employees, you should read this article and learn about safety and what you need to do to keep your business up and running.
Put Together a Business Plan
Just like any other business, your new trucking business needs a business plan.
Having a business plan lets you draw out a map of how the future is going to look.
How did you decide to start your business out? How are you going to expand it?
Put everything that you’re going to do down on paper, review it, vet it and bring in some experienced eyes if you have access to them.
The more in-depth your business plan is, the easier it is going to be to get a business loan and to make decisions for what you want to do in your business.
Without a business plan, it’s like you’re flying an airplane blind.
Select Your Business Name
Once you have your business plan in place, it’s time to name your new baby. The name you choose is going to represent your business for years to come so make sure it makes sense for the long term.
You don’t want to name your business something like “Little Trucking Company” if you plan on expanding to a big team of drivers.
Make it something memorable and unique to make it easier to market your business without confusion.
Take Care of Legalities
Now that your business is ready to be born, it’s time to take care of legalities. You need to choose whether you’re going to be a sole proprietor, partnership, Limited Liability Company, corporation, or another type of entity.
The business entity type that you choose is going to affect a lot including taxes, and personal liability.
If you aren’t sure which one to pick, it might be a good idea to speak to an attorney that specializes in business startups and let them help you through the process.
Review Rules Specific to Trucking
Before you start operating your trucking business, make sure you’re up to date on the latest trucking rules. While there are the general state and federal licensing requirements, there are other things you need to do when you’re starting a truck company.
You have to obtain certain permits and licenses that other businesses don’t have to worry about. You’ll need to check on the specific rules for the state that you’ll be doing business in.
Get Your Trucking Business Up and Running
Now that you know how to start your trucking business, you’ll be able to choose the right business model that works for you. You’ll also be able to determine what you want to haul and who you want to haul it for.
Now that you have this information, what else would you like to learn?
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