The trucking business is one of the most lucrative industries throughout the nation which contributes greatly to that of the United States’ economy. There are nine steps to follow when starting a trucking business checklist. One major reasons is that the nation is equipped with major highways and roads, which makes trucking an optimal mode of transport for cargo.
Statistics show that truckers transport 70% of the United States’ freight which is approximately $700 billion of shipping of services and goods as well as items every year. There is an insufficient number of truck drivers, as well as there is a growing requirement for goods and services. So, when is an ideal time to start an enterprise in trucking than now?
To help you start your own trucking business this article will give you all you need to know about starting an owner-operated company that will ensure a long-term cash flow.
How to Start Trucking Company
The trucking industry is regulated in order to ensure that being able to start your business, there are a lot of aspects to be considered in order to ensure that you get the best performance. Before we move on to the specifics to consider, let’s look at a more detailed review of the financials and whether it’s worth it to establish a business in the trucking sector.
How Profitable is a Trucking Business?
The trucking industry is a significant one in the United States is a multi-billion dollar industry that offers numerous opportunities for entrepreneurs who are just beginning their careers. The profits are obvious for businesses who operate in the trucking sector as they earn more than 4.8 cents per dollar they spend.
It’s also very competitive and the majority of the truckers who enter the field are unsuccessful within the first year of operating. Thus, prior to stepping into the business, be sure that you have a backup plan that covers all the essential prerequisites to create a prosperous business.
Is Starting a Trucking Business Worth It?
The trucking industry is growing at a rapid pace and the industry is projected to exceed the $700 billion mark in annual revenue starting in 2015 and lasting through 2020. If you’re considering the possibility of setting up your own trucking business, now is the ideal moment to begin. The reason for this is because the need for truckers is increasing. They are the basis for keeping the economy running and, in the future in the long run, as long as people need goods, the transportation of these items is crucial.
In any event this is a comprehensive guide on how to start business in the field of trucking.
What Do You Need to Start a Trucking Business?
Develop a Business Plan
Like any other company, starting a commercial transportation business requires lots of planning and preparation in order to ensure the smooth running of the business and its success. Even though it’s an insignificant business, the trucking industry generally involves lots of moving parts including managing deadlines for drivers of trucks along with goods and trucks and other logistical concerns.
This is why having a business plan is crucial for owners-operators, as well as an individual owner or operator to assist you in establishing an operational plan that will ensure that your business runs smoothly after your trucking company is in operation.
When you are creating a trucking company plan of operation, it should include the following elements:
- Executive Summary The Executive Summary is a description in an abbreviated form or a an overview of the reasons you’re establishing the trucking business and the plans you have for it.
- “The Mission Statement The mission statement will outline the operations of your business with regard to its business operations and goals.
- Transportation Company The goals and objectives: It must be an overview of the company’s specific measurements, like the annual revenue target as well as the amount of customers you’ll use to measure the company’s growth and development in the course of the course of.
- marketing strategies:The business plan should determine the target audience you intend to reach and give the most complete picture of what your competition is doing.
- Financial PlanA good business plan will include the annual balance sheet, break-even analysis , and an annual budget plan for the whole year.
Name Your Truck Business
In the event that you’re owner-operator or sole proprietor, you must select a memorable name for your company to advertise your business.
After you’ve picked the name, be sure to adhere to the legal requirements:
- Protect the Domain Name.
- Make it a registered trademark.
It’s best to take the necessary legal steps to prevent any conflicts with the brand name your business . Also, make sure that you’ve got the full rights to use the name of your business.
It is generally accepted that hot shot trucking is a smart idea. It is possible the investment to be between $10k to $30,000 to cover the cost of the cost of the down payment for the trucks permits, permits, insurance for licenses and salaries for truck drivers, and specific state costs.
If you’re trying to figure out how to begin an enterprise in the area of trucking with no funding, there are numerous ways to obtain funding to begin your own trucking business , for instance:
- Finding potential investors In line with the model of business you choose to implement You may want to think about selling your company’s equity in partnership with investors. Additionally the fact that you are financing your venture with venture capitalists, it can help you avoid the obligation to repay the loan as with loans. However, it’s the company’s ownership in a joint way that means you have to consult with investors before taking any major business decisions.
- Inquiring for a Reasonable loan There’s a range of loan options you can choose from, but make certain to compare rates of different lenders to find out which best suits your company’s needs most effectively.
Alongside the above options You may also think about an equity loan to finance the home you live in, as well as even sell the property or your savings to finance the trucking business that you’re beginning.
Choose a Legal Entity
Like any new business, it is crucial to decide the legal and tax structure that you’d like your trucking company to adhere to. The four choices you have to choose from are:
- Sole proprietorship This signifies that you are sole owner and sole proprietor of the company and you will be fully accountable for all debts, funds in assets, liabilities and debts.
- Corporation – It creates an legal entity for businesses that protects against litigation which could be filed on private property.
- Limited Liability Company (LLC) – As the name suggests, it limits any liability for a business by establishing a line between personal assets and corporate assets, and also providing many legal advantages.
- Partnership This is the legal entity created by two or more persons who join forces to run the trucking company.
Although the final choice is yours, many entrepreneurs prefer LLC-based structures. LLC structure. since it transfers obligations to the business and offers a tax-efficient structure.
Meet Legal Requirements
They are the legal requirements that the industry of trucking must adhere to:
Commercial Driver’s License (CDL)
If you operate an owner-operator business and you plan to use the largest truck or hiring drivers to drive the vehicle. Everyone employed must be licensed as commercial drivers license. If you’re planning to get this license, then yourself or the employees need to undergo thorough background checks. Examine, attend training , as well as pass tests in writing, and finally an exam for driving. In order to legally obtain commercial driver’s licenses you must be 18 years old. It’s to be used for local routes, and must be at least 21 years old to be able to drive trucks in several states.
However, each state has its own specific conditions. But, the most effective way to find out the prerequisites to be able to get a license is buying a guidebook from the closest DMV office.
U.S. DOT and Motor Carrier Authority Numbers
The U.S. Department of Transportation (DOT) and MC numbers are required for trucking firms to be able to ship cargo across the United States. It is the U.S. Department of Transportation (DOT) number is used to monitor your company’s safety record and to verify conformity with the legal requirements.
In addition and you’re there, your Motor Carrier number or ‘operating authority’ indicates what kind of trucking company you’re operating. In addition, the type of product are you legally authorized to transport.
You can get the USDOT and MC number by registering your truck business with the FMCSA. Owner-operators will need fill out an MCS150 along with a Safety Certification application to receive these numbers. Similar to those who work for truck operators or drivers. While you’ll get the numbers after you’ve submitted your application, your request must be vetted by the FMCSA.
2290 Tax Forms for Heavy Vehicle Use Tax Regulation
In the event that your automobile weighs over 55,000 pounds, you’ll have to pay for heavy-highway usage taxes. Taxes will be based on the regulations for heavy usage taxes. Taxes can be paid by completing and filing an application for tax form 2290 with the IRS every year.
International Fuel Tax Agreement
The governments have reached an IFTA agreement that requires reports on the fuel consumption by trucks. The agreement allows any legal company that operates in the trucking industry to have the same fuel license. Owners are required to file quarterly tax returns regarding fuel usage based on their location. In addition, your vehicle should be equipped with an IFTA decal, which is required to be renewed every year.
If you’d like to allow your truck company in order to hire across borders between states or even national boundaries, you’ll need be granted an operating permit to conduct interstate business. This is done by applying the current BOC-3 type form with the FMCSA that will allow you to identify who is responsible for each state where your business operates, and acting as a legally authorized “process agent.’
Standard Carrier Alpha Code
If you’re contemplating letting your truck drivers or drivers transport items that are highly visible You’ll require the SCAC code. It’s a code that is private controlled via the NMFTA.
Unified Carrier Registration
The trucking industry is the one that created UCR. This industry developed UCR. The trucking industry created the UCR system to validate insurance coverage that is current. It’s available in all states where motor carriers operate. To join the UCR you’ll need to supply your USDOT as well as the numbers for MC. Therefore, make sure to obtain these first by contacting the Federal Motor Carrier Safety Administration (FMCSA). If you’re interested in learning details about UCR system, contact the nearest DOT.
International Registration Plan
If you’d like your vehicle to be able to operate in all states, you’ll need the International Registration Plan ( IRP) plate. The plate is available by contacting the local DOT. In most cases, you’ll need to pay fees for registration which are based on the distance between states in addition to Canadian provinces.
Purchase Your Assets
A single truck can cost between $15,000 and $175,000. If you’ve earned enough money to buy a home it is best to pick the highest quality instead of the amount. Particularly with regards to massive commercial vehicles. The purchasing of used trucks might appear to be less expensive initially. However, the initial costs will increase because of the necessity for repairs or maintenance and also interruptions.
If you do not have enough money to buy the truck you’re looking for it could be a viable option. However, the expenses that come with leasing could be more expensive in the future contrasted with purchasing the truck that you are using.
Insure Your Assets
A truck insurance assures your company’s starting a trucking business is safe from financial disasters which could occur. Also, it covers risks such as injuries to vehicles or damage resulting from accidents.
Different trucking companies usually buy different insurance policies. However the most popular ones are:
- Auto insurance
- Primary liability insurance
- Cargo insurance
- Insurance for personal accidents that cause passengers
- Collision insurance
- Hire Employees
If you don’t wish to operate your trucking business using an owner-operators model it is likely that you will have to find employees. The jobs you should consider including in your business include:
- Payroll Managers
- Logistics Coordinators
- Dispatch Operators
Market Your Business
Here are some ideas for starting a trucking business and marketing that could ensure steady income:
- Create a professional site with complete information about your trucking business and the services you provide.
- Develop marketing materials, including your memorable emblem, or brochures to describe your offerings.
- Utilize online load boards which truck operators, freight broker, shippers and carriers can register and search for available loads.
- Establish business connections through attending trade exhibitions.
Trucking industry is a $700 billion-dollar business in the economy of America alone. The demand for trucking is growing. Don’t be intimidated by the larger trucking firms. Start your company right now.
However, it’s important to understand how to succeed in establishing a successful trucking company. It is essential create an effective business plan and do your research. To meet the different legal requirements of the business as well as to purchase and secure your assets as fully as you are able to.
This checklist will aid you in understanding the industry. It’s designed to motivate you to start a business that is in the trucking industry. Take advantage of the many lucrative opportunities that the industry of trucking gives you. This should lead to even greater earnings, lucrative and satisfying job.
Are you looking to learn more about the trucking business? Here’s what you need to know. understand the average cost of the insurance of commercial trucks.