Did you know that nearly 71% of freight tonnage moved throughout the country is done on trucks?
If you’re interested in starting a business that plays an absolutely vital role in the economy, you’re going to want to get into trucking.
A trucking business can be very profitable, but only if it’s run the right way. If you want to start a trucking company, you’ll need to build it on a solid foundation to ensure that it can flourish.
If you’re interested in the trucking industry, you’ve found the right post. We’re going to tell you everything you need to know to build a successful company.
Starting Your Trucking Business: A Simple Primer
If starting a trucking business were as easy as simply buying a truck and signing some contracts, everyone would have a company that specializes in trucking.
The trucking market may be profitable, but it takes a lot to make real money in the business. There are also factors like timing and luck that can come down to being a real success.
We may not be able to account for certain factors, but we can give you solid advice that can help you get started. Here’s everything you need to know to get started in the trucking business.
Create a Solid Business Plan
A well thought out business plan is the cornerstone of any successful company. Before you start looking into equipment and hiring employees, take time to create a plan for your company.
When you’re creating your business plan, be sure to pay special attention to your competitors.
Having a deep understanding of the existing business landscape can make it easier for you to determine your company’s value prop and the services you should offer to give yourself a competitive advantage.
Once you do some research on what’s out there and what you think you have to offer, you can start giving some serious thought to the niche you want to serve.
There are so many markets you can target when you’re in the trucking industry, but if you try to do it all at once you could set yourself for failure.
Focus on providing excellent services for one section of the market. Once you grow and feel confident in your main offering, you can break into other important sectors of the market.
There are a lot of helpful guides available that can teach you the basics of what to include in your plan. They’ll give you the guidance you need to get started.
Dive Deep Into Insurance
Insurance is an important part of any company, and that’s especially true for people that own a trucking business.
Your insurance is going to have to double as protection for your drivers as well as protection for your customers and their cargo.
Sometimes a single bad day is enough to bankrupt a fledgling trucking company. Imagine the costs of replacing a fleet of broken-down trucks, or paying costs for an accident.
When you’re researching insurance policies, go with one that explicitly focuses on damage to your vehicles.
Trucks are going to naturally experience a lot of wear and tear as they make deliveries. The more milage they accumulate, the more chances you’ll have for a breakdown or serious maintenance jobs.
You should expect there to be times where trucks in your fleet are completely out of service, and there could even be times where you’ll have to write off a truck as a total loss. Having a comprehensive insurance policy can help soften that blow.
Liability insurance is also essential for any trucking business. The actions of your truckers won’t just reflect on your business from an optics standpoint, they can also be legally tied to your business.
If one of your truckers gets into an accident, your business will be the one held liable if there’s ever a lawsuit.
Lenders are going to be very wary of giving money to a trucking business without proper insurance coverage. This is why it’s important for owners to get their insurance matters sorted out before they start looking for financing.
Get Plenty of Capital
The saying that you have to spend money to make money is especially true for people in the trucking business. Before you start planning out logistics, you need to make sure that you have plenty of capital.
The employees you hire are going to need plenty of benefits and good pay to make their long drives worthwhile. You’re also going to need to put money into pre-employment drug testing and background checks.
On top of employee costs, operating costs can get very high. Think about the money you’ll need to have on hand for routine maintenance, fuel, and fleet insurance.
Bank loans are a great way to get the money you’ll need upfront. This is where your business plan is going to come in very handy.
Lenders don’t want to give their money away to anyone with an idea for a business. You’re going to need to show that you have a solid understanding of the trucking business and that you have a plan for growth.
Get Stellar Employees
You can write up great contracts and have the highest tech trucks at your disposal, but they’ll only matter if you hire the right people to staff your company.
When you’re just starting off, you may want to consider hiring a few drivers with plenty of experience under their belts. Having some seasoned drivers can cut down on training, and give you peace of mind when they go on deliveries.
Drivers will play an important part in your business, but you’re going to need other great employees to balance your business. Look for experienced officer workers and people that can handle the fast-paced nature of a trucking business.
Keep in mind that you’re going to have to do your due diligence during the hiring process. Pre-employment drug testing and background tests are an absolute must for anyone that wants to work at your company.
Truck driver safety should be at the forefront of every hiring decision you make. As long as you find reliable and responsible people, you’ll be able to have employees you can trust.
Consider Your Equipment
The kind of trucks you choose to use can play an important role in your business. You’re going to want to give equal thought to affordability and functionality when you build your fleet.
Remember that there are certain trucks that are better for the kind of clients you plan on servicing. Take time to learn about the different kinds of trucks you can buy, and if you’ll need any special features like refrigeration.
Depending on the funds you have at your disposal, you have the choice to either lease trucks or buy them on your own. Leasing your trucks could save you money in the short term, but you’ll end up paying a lot of money for damages and repairs.
If you have the money upfront, purchasing trucks can save you money in the long run. If you purchase a lot at the same time, you may be able to get a bulk discount from the seller.
Know Your Permits
Before you get too far into planning your business, you should take some time to research the necessary permits you’ll need to successfully operate your business.
Every trucking business owner should focus on three main permits: a commercial driver’s license (CDL), a USDOT number, and a Motor Carrier Number.
A CDL is going to be a little more involved than just getting a driver’s license. You’ll need to make sure that drivers have CDLs that pertain to the specific vehicle they plan on driving, and they should be prepared to pass a 3-part skills test.
Your USDOT number is a unique identifier that the U.S. Department of Transportation will use to compile important data about your business.
Think of your USDOT number as your business’s social security number. They’ll use this information for inspections, compliance audits, and investigation into crashes.
If you plan on operating your trucking business across state lines, a USDOT number is absolutely necessary.
In fact, many states require that trucking companies get USDOT numbers regardless of if they do interstate business, so it’s a good idea to get a number for your business.
One thing that you may not necessarily need is a Motor Carrier (MC) number.
The Federal Motor Carrier Safety Administration (FMCSA) mandates that you’ll need an MC number if you operate as a for-hire carrier, transport passengers across state lines, or transport federally regulated commodities.
Grow Your Business
When it’s planned the right way, a trucking business could be what you need to build a profitable company you can be proud of. With the right research, planning, and hiring practices, you’ll have the company you’ve dreamt of in no time.
We’ve given you the basics about starting a trucking company, but there’s a lot more you could be doing to set yourself up for success.
Do you know how to write up a contract? Are you confident in your ability to interview people?
We have a ton of helpful content for up and coming entrepreneurs on our website. Be sure to browse what we have so you can find information on subjects that matter the most to you.