Are you thinking about starting a trucking business? Starting a business can bring you great joy as you embark on a new challenge.
It can also bring you to your knees because there are so many instances where new businesses fail to make it past the first 5 years.
Starting a business in the trucking industry is a smart move. The trucking industry is the backbone of our economy. About 80% of our clothes, furniture, electronics, and groceries are delivered by trucks. That’s only going to grow. It’s predicted that the industry will explode by 75% over the next few years.
How can you start a trucking business that thrives?
Read this article to find out.
Know the Industry Inside and Out
You may already have trucking experience and can turn that experience into running a business. The thing to remember is that you may know how to drive a truck, but you don’t know how to run a business.
There are many aspects that you don’t know, such as accounting or sales to get customers. You may not know much about marketing. Take the time to learn about these aspects of running a trucking business before you start.
If you don’t have trucking experience, it would be in your best interest to get as much experience as you can. Get a job in the industry and work your way up. You can gain valuable experience that will help you prepare yourself for your business.
Think of your job as if you’re running the business. Note what works and what doesn’t work. You can also decide how you would run things differently if it were your own business.
Create a Business Plan
Is a business plan really necessary when you’re starting a trucking business? Let’s put it this way, would you like to see your business survive? It’s documented that businesses with a plan have a better chance to survive than ones that don’t.
Your business plan is also essential if you plan to get funding for your business. Banks and investors will want to make sure that your business has a sound foundation before they take a chance and give you money.
They want to make sure that you understand the risks of the business, the competition, your customers, your plan to acquire customers, and the profitability of the business.
How Will You Make Money?
In your business plan, you’re going to need to address a lot of questions. The most crucial question is how will your business make money?
There are two common ways that trucking businesses make money. Let’s take a look at the advantages and disadvantages of each one.
A privately owned business means that you have control over the entire business. The drivers are your employees and you own the equipment.
This business model is also more expensive. Since you own the equipment, you have higher insurance rates, higher overhead and operating costs. It’s a very costly business to start up but is more profitable in the long-term.
A sub-contracted business means that you contract your work out to other drivers. They own their own equipment, which means that you don’t have a high startup or overhead costs.
One big disadvantage is that you’re completely trusting the contractors to do great work. This, you have no control over because they’re contractors, not employees.
Make it Official – Register Your Business
You want to come up with a great business name that resonates with your target market. That will help you create branding around your business.
In the case of a trucking business, you want to create a brand that promises reliability and punctuality. Those are the two main reasons why people will use your trucking business.
Once you have your brand and company name down, you’ll want to make it official. You want to make sure that the name is available online and offline. There are a few places you want to check.
The first is with the U.S. Trademark and Copyrights Offices. There are databases available for public search that will help you make sure that your business name doesn’t infringe on someone else’s copyright or trademark.
The second place to look is with your state’s Secretary of State’s office. Again, you want to make sure that the business name you have in mind isn’t already registered.
The third search you want to conduct is a domain name search. You’re going to need to build a website for your business, so you want to make sure that the domain name is available. You can do this type of search on any web hosting site that sells domain names.
Get Licenses & Equipment
The trucking industry does have a lot of regulations to work through. This applies to federal and state regulations. You may want to hire an attorney who has worked with the trucking industry to help you navigate the various regulations.
A couple of the main ones to know are the Federal DOT Number and Motor Carrier Authority Number and Heavy Use Tax Form.
You’ll also have to purchase equipment for your business. You’ll need to set up office equipment, whether you’re a privately owned business or sub-contracted business. You’ll also need trucking scales as well. You can read more here about the types of trucking equipment you may need.
Finally, you’ll have to get your business and equipment insured. There are insurance requirements that you have to meet no matter what type of business structure you have. You want to make sure that you are well versed in the regulations and requirements of your business.
Starting a Trucking Business the Right Way
Starting a trucking business is a very exciting venture. So much of our economy depends on trucking and there’s always a need for it. That doesn’t mean that you can just set up shop and business will flood to you.
You need to make sure that you have the right foundation set up. You can do that by having the right business structure in place, having a plan, and getting the right licenses and insurance from the start.
Would you like more great business tips? Read this article about applying for loans.