It takes more than just a passion for driving to start your own trucking company. There are many steps involved in gaining your authority and even more to consider before hauling your first load.
Beyond just having the right equipment (i.e., a truck and a trailer) and a commercial driver’s license (CDL), you’ll need to have a business plan, complete the proper paperwork and acquire the necessary permits to run your business legally. On top of that, you’ll need to ensure you have enough cash flow to survive the first few months, as costs add up fast.
Below is a brief overview of everything you’ll need to get rolling and build a successful trucking business.
Step #1: Create a Business Plan
Before gaining your authority, you need to establish some general goals for your trucking company. Having a strategic business plan for your company can be the difference between success and failure in the highly competitive trucking industry.
While each business plan is unique, most successful plans share a few common elements. Here’s a simple outline of what to include:
- Executive Summary: Introduces your trucking company, its mission, finances and growth plan
- Company Description: Contains key facts, talks about ideal clients, your trucking industry experience and whether you plan to operate one or multiple trucks
- Operational Plan: Details key functions of your trucking business and how they work, such as:
- Dispatching
- Routing
- Invoice processing and payment
- Accounting tools and software
- Safety technology
- And more
- Services: Describes how you’re meeting customer needs, the industries you intend to serve and the type of freight (household goods, electronics, etc.) you plan to haul
- Market Analysis: Provides a broad range of data that shows investors that you’re up to date on industry trends and explains why your company can excel in the trucking market
- Sales and Marketing: Outlines your strategy for gaining market share, including details about your marketing budget and sales operations
- Financial Projections: Showcases financial statements and information proving your company’s ability to meet its goals
Step #2: Acquire the Necessary Licenses and Permits
The trucking industry is heavily regulated and demands an entire checklist of permits and other requirements for a new trucking company. To start your own trucking business, you’ll need an operating authority to haul loads and transport federally regulated commodities so that the Federal Motor Carrier Safety Administration (FMCSA) can track your safety records and compliance.
To gain your authority, you’ll need:
- A commercial driver’s license
- An application for your USDOT and MC Number
- A unified carrier registration
- An international registration plan
- An IFTA decal
- A BOC-3 form
Step #3: Legally Establish Your Trucking Company
Like any other business, your trucking company is a legal entity. Determining your company’s legal name, structure, official identifications and tax reporting are all necessary steps to getting started. One of those will be your Employer Identification Number (EIN), which identifies your company to the IRS for tax purposes. You can apply for your EIN for free on the IRS website.
Additionally, it might benefit your new trucking business to form a Limited Liability Company, or LLC. Establishing an LLC can provide a safeguard for your personal assets and protect you from risk in the event of debt or legal action, while also giving your business an additional level of professionalism and credibility.
Step #4: Obtain Equipment and Secure Trucking Insurance
Choosing between purchasing or leasing trucks and trailers will be a big decision when it comes to your new company’s financial health. Both options have their pros and cons, and it’s important to work with trusted equipment finance professionals to determine the best option for your needs.
Purchasing will come with higher upfront costs and leave you responsible for maintenance and repair costs, but you get full ownership and control of your equipment. Leasing, meanwhile, will generally have lower monthly costs but higher interest rates, which may result in paying more money over time.
Step #5: Secure Trucking Insurance
Finding the right insurance provider and coverage is critical in a high-risk industry like trucking. There are two basic types of insurance that your trucking company will need: commercial auto liability insurance and cargo insurance. It is wise to carry both forms of insurance to make sure your trucking company has enough coverage.
Step #6: Financing Your Trucking Company
First off, it’s important to separate your personal and business transactions. Before putting any money into your trucking business, you should establish a business account to ensure clear financial management.
Once you establish this account, you’ll need to invest a significant amount of money up front for expenses like:
- Equipment costs
- Licensing
- Registration fees
- Maintenance
- Insurance
To pay these costs, manage cash flow fluctuations and ensure stability, it’s important to have some sort of financial buffer during the first months of your business. Financing options such as equipment financing, SBA loans and traditional bank loans can help get your business off the ground, provided you work with a reputable lender.
Additionally, services like factoring, which offer same-day payment on freight invoices, can help ensure that you have enough cash on hand to manage payroll and cover emergency expenses.
Step 7: Find Loads
Once you’ve completed all the steps above, you’re almost ready to hit the road. But first, you’ll need to start finding loads to haul. The best way to do that is through online load boards, which are marketplaces where owner-operators, trucking companies, freight brokers and shippers can find and post available loads to haul.
Depending on the type of freight you want to haul and your desired destination, you can filter through your options to find loads in the specific lanes you want to run.
Some load boards, including our very own RTS load board, are even available for free and allow you to negotiate your rates online.
Finally, when you book that first load, you’re ready to hit the road! We wish you the best of luck in your journey.