Frequently Asked Questions About Starting a Trucking Company
Whether you're thinking about taking the next big step or have just started a trucking business, you are going to have a number of questions that need answering. Understanding the trucking industry, keeping with demand, and following good business practices will help you be a successful truck driver and company owner. We have put together the most frequently asked questions about starting a trucking company to make this process smooth.
How do I get a trucking company started?
Here are the basic steps to start a trucking company:
Name your business
Choose a business structure - LLC or Sole Proprietorship?
Register your business with your state
Get a truck insurance policy
File for federal and state taxes
Apply for your operating authority. This includes:
- MC number
- USDOT number
- International Registration Plan (IRP)
- Unified Carrier Registration (UCR)
- Drug and Alcohol Consortium
If you do not complete all of the steps above, your operating authority will not go active. Without an active authority, you cannot drive a truck for your trucking company.
Should I develop a business plan?
Yes, a business plan sets you up for success. It will put all your ideas and decision into place to guide you to make the company's appropriate financial and operational decisions. It's important to include a description of your company and what type of freight you plan to haul, an analysis of the market and how you plan to operate, where you plan to find freight, and your final projections. A business plan will hold you accountable and help you hit any goals for your small business.
If I don't already have one, should I buy or lease a truck?
Assuming you have already obtained your commercial driver's license and know how to operate a truck, an owner-operators' next step is to get one. But should you buy or lease one? This ultimately comes down to your financial situation and personal preference. If you plan to keep your truck for a while and can afford the down payment, buying a truck might be the way to go. From a long term perspective, it comes out cheaper. If you can't afford a down payment or you like upgrading the truck you drive regularly, leasing may be a better option. There are several options for equipment financing to look into if you need additional help.
How do I finance my new trucking company?
The best and most cost-effective way to finance your trucking company is with freight factoring. It's tough to wait 30, 60, or 90 days to get paid for a load, especially when you're just starting out. The difficult industry, plus keeping up with operating expenses, makes managing cash flow challenging for both new and established carriers. Because trucking companies can experience cash shortages randomly, banks can be reluctant to provide credit lines, or they will charge extremely high-interest rates.
A reputable freight factoring company like Porter will get you paid in 24-hours on every invoice. The fast payments will free up your cash flow so you can keep hauling loads. A freight factor will also provide additional services like a free fuel card with advances and discounts, access to nationwide freight, help with equipment financing, and additional industry assistance.
Where do I find loads?
There are a few different options for new company owners to find loads. Firstly, it's important to note that brokers won't always work with new trucking companies if they don't already have a reputation in the industry. One good option is using load boards. They provide an open market with accessible loads for new and established companies. Building relationships with direct shippers is another option to find freight. Once you build up those relationships, it will be easier to access top freight. Talk to truckers you meet and ask them for referrals on their most reliable freight sources. This may get you in the door to work with some good shippers or brokers.
How can I save money on fuel?
Fuel is one of the largest expenses that goes with driving a truck. The best and fastest way to save money is with a fuel card. Porter provides fuel cards with savings at over 14,000 gas stations nationwide, saving our drivers thousands of dollars yearly. Owning and operating a motor vehicle is expensive, so saving money wherever you can is ideal.
Get the assistance you need
Running a trucking company can be hard to manage and time-consuming. Porter Freight provides trucking companies with the support they need to grow their business. Our 24-hour pay and industry partners set our clients up for success. Fill out this form to learn more today.