Before you start a trucking company, youâ€™ll have a lot of research to do. Not only do you have to research the administrative side to learn what entity you want to use, but you have to decide if you want to work as an owner/operator or if you want to start a large trucking company with drivers, a dispatch center and many customers. The way you go depends on what you want to do and how much money you have or are able to get to invest in the company.
How Much Does It Cost to Start a Trucking Company?
This depends on your plans. If you are going to be an owner/operator, you could start relatively inexpensively. If you are going all the way in, youâ€™ll definitely need a business plan and some financing.
As an owner/operator you could purchase a used truck for under $50,000 plus a trailer. Cost of the trailer depends on what type of freight you are hauling. Refers cost more than box trailers or flatbeds. Lowboys limit the type of freight you haul and where you can haul.
Trucking Business Plan
Regardless of the type of business you want to start, you should have a trucking business plan. The business plan outlines everything you need for your business including location, financing, how you intend to make a profit, how you will pick up customers, whether youâ€™ll lease a truck and work as an owner/operator and how much real property, including buildings you want.
Setting Up Your Company
First, choose an entity and a name. Check with your secretary of state to see if the name is available and then complete the incorporation documents for the type of entity you choose, whether itâ€™s a corporation, sole proprietorship, partnership or limited liability company (LLC). Once you set up a company, youâ€™ll need to open a bank account in the business name and fund the account.
After you get the account open and funded, apply for the licenses you need. At this point, you should already have your CDL license since you canâ€™t drive a truck without it. Youâ€™ll need more licenses and permits if you are purchasing a piece of commercial property with an office and a shop than you will if you are an owner/operator. In fact, if you lease a truck as an owner/operator and work for one company, the company may do all of this for you.
Requirements are different for every state, so be sure to research permits and licenses for your city, county and state.
Once everything is set up, youâ€™re ready to purchase equipment and real estate. If you are working as an owner/operator, you need only purchase your tractor and the type of trailer you want. Since you are working by yourself, you might consider a trailer that will haul different types of freight so that you are able to take on more runs.
If you are building a trucking empire, look for the perfect property that includes office space for you, space for a dispatcher and a large workshop for your trucks. If you canâ€™t find the perfect property you may have to purchase a piece of vacant commercial property and build the offices and shops yourself.
If you are an owner/operator and you want to work for one person, find a company that you like. Be sure to check how the company pays and how often youâ€™ll get work. Many of the companies offer benefits for owner/operators, so check into benefits with each company you review.
You may also choose more than one company to work for. Keep track of which runs you do for which company and be sure that the companies you choose do not have restrictions on working for other companies.
If you are creating your own trucking empire, youâ€™ll need to find customers to haul for â€” and then youâ€™ll have to provide top-notch customer service and excellent delivery times to keep those customers. Make sure you make promises on delivery times and dates only if you have the drivers to cover the routes.
Starting a new business always has a steep learning curve, even if you are an owner/operator making runs for another company. Some tips for working with your own trucking company include:
- Â Â Â Â Â Make sure you have the proper logs. Most drivers must now use electronic logs.
- Â Â Â Â Â Always keep up with new regulations so you donâ€™t get caught driving illegally, which could result in a huge fine.
- Â Â Â Â Â Follow the trucking industry, especially if you are building a trucking empire, so that you know about all of the newest technologies that make your driversâ€™ jobs easier or better.
- Â Â Â Â Â Make sure you have excellent communication skills with your customers, your drivers and your vendors.
For new drivers, you might offer schooling to help new drivers get their CDL.