Category: ”start a trucking company”

A Comprehensive Guide: How to Start a Trucking Company

Posted on January 1, 2024 by - ”start a trucking company”

If you’re a truck driver wanting to strike out on your own, you may wonder how to start a trucking company. Starting a business can be overwhelming if you don’t know where to begin, but it doesn’t have to be an insurmountable challenge. This guide will help you learn all about starting your trucking business and get it off on the right foot from the start.

Why Start a Trucking Company?

There are many reasons why you might want to start a trucking business. The industry is profitable, even in challenging times like the recent pandemic. It allows for a level of freedom and flexibility that is hard to find in many industries. And compared to many industries, trucking can be a simple business to begin. 

How much do trucking company owners make?

Wages for trucking owner-operators are variable depending on the part of the country where you start your business. According to ZipRecruiter, the national average is almost $250k annually, with some states offering as much as $30k more. But of course, expenses have to be taken into account.

As for gross profit, financing company Coastal Kapital notes that “On average, a full-time owner-operator trucking business’s industry-standard turnover figure will be around $100,000 and $140,000.” Generally speaking, long-haul trucking pays better than local businesses.

How to Start a Trucking Business

Starting a trucking business can be a lucrative venture, but it requires careful planning and execution. You must know how to secure the right vehicles and licenses, build a strong client base, comply with regulations, and file taxes properly. But even if you’ve never run a business of any sort before, with the right advice, you can get your trucking company going strong, starting from just a single truck.

Requirements to start a trucking company

Once you’ve decided you want to start a trucking business, there are a few things you’ll need to research before you get going. Carefully look into the opportunities available in your area and create a business plan. This should detail how your company will operate and what it will do. There are plenty of free example business plans available online, so read through several before you begin writing your own. 

How to start a trucking business with one truck

Once you’ve created your business plan, you’ll need to register a business name and obtain an EIN (employer identification number). You’ll also need a permit from the Federal Motor Carrier Safety Administration (FMCSA) to carry goods across state lines (if that’s your intention). If you plan to operate within ports and airports, you’ll want to secure a Transportation Worker Identification Credential (TWIC) card as well. Once all of these credentials are yours, it’s time to get started.

Unless you already own a truck, you’ll need funding to purchase one. Look into Small Business Authority (SBA) loans or freight factoring as a funding source. Alternatively, you may choose to lease a truck. Some truck leasing companies even offer lease-to-own plans that allow you to purchase the vehicle at the end of the lease. This will give you more time to come up with the funding to purchase your truck if that’s what you want to do.

Finally, you can decide how you want to market and build your business. Will you go through freight brokers, load boards, partnerships with other carriers, or business networking? Perhaps you want to utilize a combination of several methods. To ensure you retain customers and build business relationships, focus on offering good customer service and keeping your costs low to offer competitive pricing. Trucking management software like TruckLogics can help you ensure your business runs smoothly from day one.

The Real Cost of Starting a Trucking Business

Outside of purchasing a truck (which is not required as leasing opportunities are plentiful), starting a trucking business is relatively inexpensive compared to many other businesses. Trucker Daily estimates that you can start your business with as little as $6,000-$15,000. This includes the costs of licensing and other paperwork that you will need to get started. 

Potential Challenges and How to Overcome Them

So far, starting a trucking business sounds pretty simple. But there are some things to know about trucking before you get started.

First, there are many compliance requirements that you will need to meet in order to avoid fines and other penalties. Whether you’re operating under your own authority or someone else’s, you’ll need to stay on top of these requirements. There’s a thorough compliance checklist available from Schneider Owner-Operators. 

Next, you want to stay on top of your finances and plan for tax time. Fortunately, there are a lot of trucking expenses that qualify for tax deductions, but you must keep receipts from day one in order to claim them. You’ll also need to keep fuel and mileage records for IFTA filing, and you’ll need to file the Heavy Vehicle Use Tax once a year.

FAQs

How profitable is starting a trucking company?

Trucking is a very profitable industry with plenty of opportunities for newcomers. According to Boss Magazine, trucking companies can make an average profit margin between 2.5% and 6%.

Is it hard to start a trucking company?

While starting a trucking company may be time-consuming, it’s not actually very difficult. As long as you take the time to ensure you’re complying with all federal, state, and local transportation regulations, the rest should be fairly straightforward.

How do I start a trucking company and get loads?

There are several options for sourcing loads for your new trucking company. You may use load boards, freight brokers, partnerships and other business relationships, or even traditional marketing methods. 

How do I start a trucking business with little money?

The biggest expense when starting a trucking business is purchasing a truck. If you don’t have funding to do so, you can still start your business by leasing your truck or even entering a lease-to-own agreement.

Costs to seriously Consider When Buying A Rig

Posted on December 28, 2016 by - ”small trucking company”, ”start a trucking company”, #TruckingNation, agricultural vehicle, big rigs, Buying Trucks, new truck, Owner Operators, Semi, truck driver, Trucker

Whether you’re becoming an owner operator, a fleet manager looking to expand your operation, or tired of leasing, it might be time to buy your own rig. However, there are a few hidden or not so obvious costs to consider. Be sure to consider the following costs that go into buying new or used tractor-trailers before busting out your checkbook.

Costs to Consider With New and Used Rigs

First things first, you’ll need a down payment. Spending between $10k to 40K on a new or used rig will help you get a lower monthly rate. That’s another thing, every month you’ll have a big new bill in the mail!

When buying a new truck the monthly bill will be there for years hanging over your head. Buying used will give you more of a short-term investment that you can pay off in a quicker amount of time, with a possible lower monthly rate.

Did you know that new trucks come with fancy warranties? There are even extended warranties! They can really save your butt if you need a repair early on, but they also can add a lot onto your monthly tab.

Warranties on older rigs cost a bit more, because obviously and older rig will need more maintenance than a newer one. Say you’re interested in a rig with over 500k miles on it, it will hard to get a detailed report about it’s driving history. At least with a new rig, you know every detail about it. However, with an older rig the warranty payment may balance out with the cheaper monthly payment.

Although, keep in mind that even though older rigs are sturdier they usually have more issues and bigger problems. For example, most older truckers need a total engine rebuild around 700,000 miles! Plus, are the axles, tires, transmission, suspension, and more in good shape?

Have you considered insurance? Legally you need it to keep your truck on the road. Insuring a brand new rig will add more to your monthly bills. Driving without it could leave you with huge penalty fees, especially if you’re involved in an accident. Generally, trucks with cheaper values have cheaper insurance rates, but if you have a bad driving record your rate could skyrocket. Watch out for those speeding tickets!

This may seem obvious, but trucks with all the bells and whistles cost more. Do you want an automatic truck? Do you make overnight trips? If so, do you want a medium-sized sleeper or one with an extended roof?

As mentioned above, older truckers are often built a bit sturdier. This comes in handy with the resell value. If you’re looking for a truck to start out in then make sure you get something you can resell later when you’re ready to upgrade. Avoid a cheaply made new truck that you will have trouble flipping later.

At the end of the day, you’ll still have to consider all of the maintenance costs. Gas, which is cheaper in newer, more fuel-efficient rigs can really add up. Maintenance like oil changes and tune-ups, taxes, filing fees, repairs, and more may cost more on an older rig too.

Don’t just head down to the lot and pick a pretty color, research your options and go with a list of what you’re looking for in a new or used rig to make sure that you get the best option for your current financial state.

Get That Rig and Get to Trucking!

If it’s the right time to get your first new truck, a new to you truck that’s used, or upgrade to a better truck then go for it! It’s a great feeling to go down the road in something that’s totally yours. Just make sure that your finances are in order and you take the time and consideration to find your perfect match.

For more trucking tips visit ExpressTruckTax.com, be sure to share your truck buying experiences in the comment section below.

Common Start-Up Trucking Company Mistakes

Posted on December 21, 2016 by - ”small trucking company”, ”start a trucking company”, ”trucking company”, #TruckingNation, E-File Truck Taxes, independent trucker, Owner Operators, trucking

Trucking is a competitive industry that millions of people try to break into every year. Also, many truckers seek to make the transition from truck driver to owner operator, and unfortunately a lot of them fail. If you want your trucking company to make it avoid these common mistakes.

New Guys Don’t Plan

Sometimes new trucking company owners don’t take the time to consider what will make their business work or fail. Instead, they say goodbye to their managers and take off down the road without being sure of their next move.

They don’t sit down with a CPA or business professional who can help them draw up the plans for getting equipment, hiring a few people, getting loans, and more. They go in blind and get hit with too many unknowns, and often times crawl back to their manager to ask for their job back as a result.

They don’t plan for more than one load at a time. They haul something to a city far away and drive home with an empty trailer wasting days at a time. Try to get a few loads near each other to make getting out there and back home worth it.

Their Finances are a Mess

With a bad credit score and bad financial planning bring on a lot of problems fast. If you spend all your money on one top of the line rig what will your other drivers use? Something that should have been left in the junkyard years ago?

Don’t just jump in and buy something. If your credit is a mess you’ll have trouble getting a proper loan, or your monthly rate and interest charges may go through the roof. Consider leasing as a cheaper option. There are even lease to own options available.

Another rookie mistake is not having any money set aside for maintenance and accidents. Trucks need regular servicing and run into problems just as much as we do, so be prepared in the event of dents, dings, and accidents. Will you be able to stay afloat if one of your trucks can’t be used for a month?

Then they also forget or don’t realize that shippers pay out on 40 to 60-day bases, so for a load they deliver today, they might not get paid for it for up to two months. What in the world? No money for two months? Then how will you pay your bills and employees? By planning ahead by having savings in advance ready to go in order to avoid payday loan services.

They Cut Corners

Instead of taking the time to call people in their area and develop quality relationships with shippers they just hit the load board over and over for quick, one-day loads that are competitive and don’t offer much return.

They get shoddy equipment that quickly malfunctions and hire less than reputable truckers that will deliver a load for cheaper, but don’t exactly build the best relationships with truckers.

They skip out on quality people to work in the back office at home. Without someone to do the paperwork and filing then it will all come back on you. Do you have time to handle everything yourself? Will you remember to keep up with tax filings and DOT regulations?

They Don’t Market Themselves

How can shippers choose you if they don’t know who you are? Put your brand on the side of your trucks. Put your drivers in uniforms with hats and shirts that display the name of your company.

Also, you can have a small team at home that works on making outbound calls to shippers in order to set up meetings to introduce yourself and talk about your business. As a result, long lasting relationships with repeat customers can be built.

You need to invest a little into having a professional website that displays your contact information. Plus, take advantage of social media to display your trucking company to millions of people online. Eventually, as your budget grows you can invest in google and social media ads.

They Start off too big

A lot of new guys cut off more than they can chew in the beginning and may choke as a result. Instead of slowly growing with two rigs they jump into business with five new trucks. If you don’t have loads for them to carry they’ll sit and collect dust as the bills pile up.

They hire truckers from all over. Someone in Charlotte will start paying guys in New York and Chicago instead of getting in with their local guys who usually are more reliable with cheaper rates. Creating a few personal relationships with truckers you can give raises to as your company grows will take you a lot further than have too many truckers all over the place.

There are too many people in the back office. New owner-operators get nervous about all the stuff that needs to happen so they’ll bring on secretaries and a big sales team, without considering the fact that they can’t pay that many people yet. Wait for the business to roll in before promising paychecks to too many people.

Slow Down and Plan it

Your trucking company can be successful. All you need to do is sit down with a financial planner and build a plan for your growing company. It may take off a little slower than expected, and there may be a few more things to consider than you thought, especially financially.

However, by taking it slow and adjusting to your new role as an owner operator and by building quality, long lasting relationships, before you know it you could have 10 trucks in your fleet or more!

For more tips on how to make it as an owner operator visit ExpressTruckTax.com and be sure to share your secrets to success in the comment section below.

Consider The Facts of Becoming an Owner Operator

Posted on December 14, 2016 by - ”start a trucking company”, ”trucking company”, #TruckingNation, Driving a Truck, Fleet Owners, healthy truckers, owner operator, Owner Operators, trucking

Do you want to become an owner operator? You love trucking, and the call of the road runs through your blood, but are you ready to take the next step to further your trucking career? Becoming an owner operator is a serious choice that can’t be made overnight, but considering these following facts may help you weigh in to make your final decision.

You Have to Talk to the Suits

It isn’t as simple as gassing up the rig and hitting 70 on the highway when becoming an owner operator, you need a plan. You also need to get around all of the red tape with the proper licenses and meet the standard regulations.

Most likely you’ll have to put on a nice shirt and go visit the offices of financial planners, accountants, and professionals who know the business and can help you make a serious plan for your trucking business. Trust us, even if you want to be independent and hate the idea of sitting in a boring waiting room, you’ll be a lot better off with a plan and guidelines to follow.

There are way More Costs Than you Think

As an owner operator, you will have to be financially smart and set budgets for your personal paychecks and meals. Can you handle sticking to a certain budget for every meal or will you buy a filet mignon at the beginning of the trip and be down to a loaf of bread a jar of peanut butter by the end of it?

How much debt do you have? Are you close to unburying yourself? Can you add more to your credit cards to spruce up your rig and make necessary repairs? On and off the road, emergencies happen, do you have funds squirreled away to handle them, even if you can’t work for a month or more? Will anyone give you a loan? Hopefully, your credit is in good shape.

Are you prepared for the future? You’ll need a lot of insurance, including disability and life. If you become disabled and can’t work you’ll need the regular checks to keep coming in to help you out. Also, if you don’t make it in the event of an accident don’t you want money going to your wife and family to get your affairs in order?

It Takes More Time

Are you ready to put in the time it takes to be an owner operator? Can you handle driving longer hours with further routes? Will you mind driving all weekend? You have to be ready to put in a little overtime, or while getting started and establishing yourself, a lot of overtime.

Do you like to park on the weekends at stops to talk to your fellow road warriors and catch up on some tv or shoot the breeze to talk about what the bears with ears are catching on the CB or how the turtle races have been grinding your gears? Unfortunately, owner operators have less time to fraternize.

Is your home life demanding? Do you have a wife and kids to get back to? Do you have to be back every other weekend for custody of your kids?

You and Your Truck Might not be Healthy Enough

How old are you and how do you feel? Can you stay up for longer hours to drive farther? Do you have the time to put in overtime hours or are you just too exhausted? You never want to push yourself past the dangerous limit!

Do you have a growing health condition that will require more time for rest in doctor visits in the future? Will you need time off for treatment? If so then it might be the best time to make the jump to owner operator.

How old is your truck? Can it make the distance? How many miles have you and your loved one gone together? Do you own your own trailer and is it in good condition to haul various loads of frozen foods or materials? What if you needs to haul liquids or livestock? Do you have the necessary trailers or will they be another expense?

You may Miss Company Comforts

Leasing yourself to a company or being totally independent is always something to consider. While the freedom of not having to say yes sir to a supervisor and not having to follow dumb little rules may seem irresistible, you might miss the perks.

Working with a company comes with company trailers, paid time off, reimbursements for permits, miles, gas, and more. Plus, you can get on a company insurance plan. It’s a little less work, with a little more financial padding, even if you have people to answer too.

Do you Have What it Takes?

This article isn’t meant to put you down or discourage you from taking the steps to become an owner operator, it’s to make sure you’re prepared. Consider all the costs and the effort it will take. In the end, if the timing is right, your finances are in order, and your health is in good condition then there’s nothing like being an independent owner operator, making your own schedule, without any managers breathing down your neck. It’s pure trucking freedom.

Learn more about becoming an owner operation at ExpressTruckTax.com and be sure to share your tips and tricks in the comment section below. 

Freight Logistics for Beginners

Posted on November 18, 2010 by - “freight logistics for beginners”, ”beginners logistics”, ”small trucking company”, ”start a trucking company”, ”trucking company”, freight, freight logistics, logistics

Featured Blogger
Benjamin Bellville
When you go to start a trucking company it is important to understand freight logistics for beginners as this is the core of a trucking operation, whether a one truck operation or a multiple truck fleet. Logistics is defined as the management of the flow of goods, information or services from the point of creation to the point of consumption. Freight logistics simply put is the process by which you will get the goods from point A to point B, but entails much more than just driving the truck. Let’s take a look at all of the operations that will make up your freight logistics daily process.

1. Management – managing yourself, other drivers or employees to make sure that all the cogs in the wheel are rolling together properly.
2. Booking Freight – making contracts for direct freight or finding loads from brokers on load boards.
3. Dispatching – properly assigning the load to a truck that can get the freight there in a timely and compliant manner.
4. Safety and Compliance – ensuring that all company operations follow federal and state guidelines for safety and compliance, as well as keeping the company files stored properly up to code.
5. Accounting – keeping proper records of accounts receivable and accounts payable.
6. Transporting Goods – driving in a safe and compliant manner while making sure to be on time with agreed to scheduling for pickups and delivery.
7. Customer Relations – building strong relationships with brokers, shippers and receivers as well as any businesses you work with to maintain other aspects as mentioned above.
8. Mechanical Upkeep – making sure your equipment meets guidelines set forth by federal and state regulations, keeping it looking presentable and professional.

Perhaps the number one reason that many one truck operations fail quickly is that they are started by a former owner operator who is used to someone else performing all of these tasks for them and they neglect one or more of these steps when they operate their own company. You have to be able to wear many hats as an independent trucker and have the time to dedicate towards the cultivation of all areas.

It can seem overwhelming at times to find the time to put towards each task as much of your time is spent doing the transporting of goods and you also have to have proper rest so you can be safe behind the wheel. In order to accomplish this you need to be able to kill many birds at a time rather than doing each separate. Multitasking properly is something you should be good at before you even consider starting your own small trucking company.

In my next blog post here on Express2290 I will be getting into ways in which you can make freight logistics for beginners more manageable to optimize your time and your business image so be sure to come back and check it out.