Thinking about starting your own trucking business? Transportation is a highly competitive industry, but there’s always room for another good company. Get the jump on the opposition by asking yourself these five questions as you make your plans.
What kind of trucking business will I be starting?
Trucking companies operate in two ways:
- You can sub-contract with drivers not employed by your company. You obtain the contracts and run the business, but your drivers remain independent. The downside: you have less control of drivers and take less profit.
- You can hire permanent drivers and run a privately owned business. You will need to buy your own equipment and pay insurance, but this business model gives you total control and higher profit margins. The downside: you will need more start-up capital and face higher operating costs. This can lead to cash flow issues, so a good idea will be to start factoring your freight bills with a good invoice factoring
What kind of licenses and permits does a trucking business need?
Apart from the usual general federal and state requirements for motor carriers there are tax, license, and permit regulations that apply depending on the type of trucking business you plan to be. A number of these are listed in a related SBA article at https://www.sba.gov/blogs/starting-trucking-business-0.To ensure that you fully comply with requirements, hire a compliance professional specializing in the trucking business.
What insurances does a trucking company need?
Because you are responsible for the safety and operation of commercial vehicles on public highways, trucking company liability and accident insurance is costly and strictly regulated. Work with a good broker within your area and ensure they fully cover the type of insurance you specifically need. Your business must be fully protected, so make sure you understand your policy, including all the small print.
What sort of equipment should you buy?
This is aimed at those who have chosen to take the private fleet path. First choose ”horses for courses.” Depending on the freight you will carry, choose the type of truck suitable for that cargo. Secondly, the size of your fleet will relate to the size of your startup capital. If you need more startup capital for equipment, you can finance your operation through invoice factoring as you complete your contracts.
Where can I find freight for my trucking business?
For many new companies, the first step to starting a trucking business is to begin with smaller contracts obtained from friends and existing business contacts in their local area. To find more loads as your business grows, you can visit free freight search sites. Free load boards can help you find freight in the locations of your vehicles – and you’ll never have to pay subscription fees. Some sites also list great advice on launching a trucking business. So get started today… and best wishes!