Do you currently work in the trucking industry? Do you want to take the step up from being an employee to owning your own business? Well, if you have landed on this article, you are likely contemplating the possibility of starting up your own trucking company.
Make no mistake; going down this road means a lot of work is required. It is also intimidating to go from being a professional truck driver to set up your own operation. Yet, the potential rewards on offer are more than worth the work – and risk – of creating a trucking business.
It’s also a market that is not only lucrative but also one that is continually on the rise. In 2019, the United States trucking industry brought in a massive 791 billion dollars. This number is only going to rise over the years.
To get a slice of the pie, below are seven steps to take to successfully start a trucking company.
1. Put Together A Business Plan
The first step in the process is to put together a business plan. In the same way, you’d start a new career with a fresh set of goals and perspective, you want to begin your trucking business with a coordinated plan in place.
Certain people view their business plan as just a way to secure financing when applying for loans. However, you should view your business plan as a roadmap to success. It allows you to identify potential challenges and goals, understand how much funding will be required to get up and running, and so much more.
2. Establish Your Business
A comprehensive business plan has been put together. You have used this to land the financing you require to start. Now it’s about legally establishing your business.
When you operate your trucking business as either a Limited Liability Company or structured corporation, this creates boundaries between your business liabilities and personal assets. This means that, should your company, unfortunately, collapse, your personal property is going to be protected and won’t be used for paying debts. Being legally-established also provides several taxes, legal, and business benefits.
Along with being legally established, you also need to obtain the correct business permits and licenses so you can operate as a trucking company. These licenses and permits can differ depending on the state, county, or local area when you plan to base your business. Items you will need include a commercial driver’s license (CDL) and USDOT number.
3. Picking The Correct Equipment
When running a service business like a trucking company, it is essential you choose the correct equipment. It goes without saying, but this will mainly be focused on the truck – or trucks – you use for your business.
There are multiple aspects to consider when selecting vehicles. One of the biggest aspects is if the vehicle accommodates the type of cargo you expect to transport. Say you’re transporting perishable goods, for instance. In this situation, you are likely to go with a vehicle that features a refrigerated compartment.
It’s also important you pick trucks that are efficient in terms of reliability, weight, and fuel usage. You don’t want to go with the cheapest vehicle available, for example, as this is likely to cost you more money down the road in terms of maintenance and a lack of efficiency. Take the time to compare all of the options on offer which are realistic for your startup, and then pick the one best suited for your needs.
Of course, it isn’t just about the vehicles. There are other pieces of equipment you will need. This includes a GPS to plan out routes and receive real-time updates about the likes of traffic jams and extreme weather. If you’re starting out big with multiple vehicles, you’ll also want software where you can manage your fleet effectively.
4. Pick Your Insurance Coverage
It’s a necessary requirement you acquire business insurance before you start up your trucking company. Even though this is an obvious point, it is one that needs reiterating. These are the insurance policies you have to consider for your business:
- Primary liability insurance
- Physical damage insurance
- Cargo insurance
- Passenger accident insurance
If you want to secure the best premium at the best rates, make sure you compare several different insurance options.
5. Finding Loads
Everything is in place, and your business is ready to go. Now the next step is to actually find loads to transport. If you fail to do this step correctly, you will quickly go out of business as you won’t take on the necessary amount of work to be profitable.
Fortunately, you don’t have to go contacting random businesses in the hope of securing deals. There are load boards available online where you can find customers that match your location and logistics. Say you use flatbeds for your trucking company. There are specific boards available where you can find flatbed loads to complete. The more you do these loads, the quicker you can build fruitful relationships with clients.
6. Prevent Cash Flow Problems
It’s fair to say that a trucking company is cash flow-intensive. Regular payments you are making revolve around fuel, insurance, truck maintenance, and so on. In addition to this, clients are not liable to make instant payments once a job has been agreed or completed. It can take up to 45 days before invoices are paid by your customers.
With frequent expenses and potential delays with receiving payments, can lead to serious cash flow problems. This is particularly the case when you’re just starting out and money can be tight. However, it is important you set aside a certain pot of money so that should a cash flow issue arise, you have enough finances to cover it.
7. Continue To Grow
Even if you’re turning over a healthy profit, you shouldn’t sit still and rest with what you have. Always take the steps to grow your business. You should search for new clients, acquire more vehicles, and expand into different territories when possible.
Before you grow, however, you need to get up and running. Hopefully, this guide can help you get off on the right track.