How Do I Start My Own Trucking Company?
Updated: Mar 16, 2020
Are you thinking about starting your own trucking company but don't know where to start? You've come to the right place.
Starting your own trucking company is a big step. Demand for truck drivers has never been higher and if operated correctly, there is great opportunity to grow as an owner-operator and run a successful trucking company. The trucking industry can be very profitable, but you also need to remember that it is very competitive. Many people get into the business and end up failing after their first year. This isn't always the case if your operations run smoothly and you know what you're doing.
This blog will put you in the right direction on how to start your own trucking company!
Develop a business plan
Your business plan will set everything out that you want to achieve from your trucking company. Your business plan should include how your company will operate and will set guidelines to stick to. Learn how to develop a business plan here!
Form a business entity
There are two business entities to choose form: Sole Proprietorship or Limited Liability Company (LLC). If you're creating a sole proprietorship, you own the business yourself and are responsible and liable for everything. All profits and losses are treated on your income tax return. For an LLC, all profits and losses are reported on the members of the LLC's individual tax return. Individual members of the LLC are not held liable for the business. Learn more here.
Get a truck
If you don't already own one, you need to get a truck ... obviously. You can buy one - new or used - or you can lease one. There are advantages and disadvantages to both, and the main factor comes down to affordability. For a long-term perspective, buying a truck is the way to go. However, if you don't have the cash flow to buy a truck (down payments can be high), leasing a truck is the next best option and is more affordable in the short-term. Read more about the difference between buying or leasing a truck here.
Get your CDL
You can't drive a truck without a CDL, so if you don't already have one, you need to get one now. There are several steps in getting your CDL and different classifications depending on the type of truck you will be driving. Make sure you apply for the right one by understanding the different classifications and steps you need to take. Read more about getting your CDL here.
In order to participate in interstate commerce, you need to have your trucking authority. In other words, you can't haul any loads or run your business without it. It is extremely important to get this done, and to get it done correctly, as it takes roughly 21 days for your authority to go active, and you cannot do anything without it. Read more on how to file for your trucking authority here.
Another thing you need to have in order before moving forward is your compliance. You need to file for your BOC-3, set up your IRP and get your apportioned plates, create an IFTA account, and complete a UCR. To know how to do these 4 things, click here.
Get an insurance policy
Insurance is one of the largest fixed expenses a trucking company will face and one of the most important factors when starting a business. This is another thing you need in place before your company can start. There are a variety of different factors when choosing an insurance policy such as age of equipment, commodities, hauls, radius, vehicle locations, loss history, and years in business. Read more about the different policies here to see what one is best for you.
You need to decide if you're going to finance your company independently or need help to get consistent funding. For new trucking companies, getting consistent funding is a vital part of the plan and signing up with a factoring company will help you succeed. Research who you are going to factor with before signing up. Consider these tips in the process!
Last thing to have ready before starting your company is knowing where you are going to get loads from. It is best to have this in place to start making money as soon as possible. Decide if you want to work with a dispatcher, in load boards, or directly with brokers or shippers. If you don't know where to start, this blog will help you out.
If you've got a head start, some of these things might already be in place. But until all of them are, you won't be able to start your new trucking company. It is better to be patient and get it done all right, then rush through it and miss a step. Getting it done right means you're closer to the money.