Almost 70 percent of all the goods in the entire United States are transported by truck. With a shortage of drivers and a booming industry, it’s never been a better time to find success as an owner-operator. If you’re thinking about starting your own trucking company, now is the time to begin.
You might know you want to start a trucking business, but have no idea where to start. Starting your own business can seem overwhelming. If you create a business plan and see it through, you’ll have both a guideline and goals for your new venture. Here’s what you need to do to start a trucking company.
First Things First: Paperwork
You can’t start your own trucking company without doing a lot of paperwork. You’ll need certain documents, permits, and licenses to start your trucking company. You can visit the Small Business Administration to see what specific permit, tax, and license registrations you’ll need to begin. These are a few of the basic documents every trucking business needs:
- Federal DOT: In order to haul cargo in the U.S., you need this documentation along with your Motor Carrier Authority Number. You’ll need to fill out a MCS-150 to obtain your USDOT number, along with a Safety Certification Application.
- UCR Registration: This signals that you have current insurance across each state
- Heavy Use Tax Form: Your trucks will constantly be on the road, which means you need to file this form for tax regulations for American roads. You’ll find it under IRS FOrm 2290.
- IRP Tag: Similar to the registration renewal on your personal automobile, this plate needs to be renewed every year to allow you to operate in each state.
- IFTA Decal: This stands for International Fuel Tax Agreement, and permits your company to get its fuel license.
- BOC-3 Filing: This filing is registered with the FMCSA, and gives you your “active operating” status.
Acquiring Your Trucks
Should you buy or lease a semi truck? This largely depends on what your startup budget looks like.
You also get to choose between whether you want new semi truck or used semi trucks. Ideally, you’d be able to purchase brand new semi trucks. But that’s not the case for many people starting a trucking company. If you have the upfront capital for a down payment to buy your own truck, however, this could end up saving you money in the end.
A new truck will range anywhere between $100,000 to $125,000. A used truck will cost you anywhere from $40,000 to $80,000. Of course, when you buy a used truck, you’ll likely have to spend more money on repairs. Weigh your options, and decide which risks you’d like to take and where you want to spend your budget. If these costs seem scary to you, don’t worry. You can always go with financing options.
If you don’t want to buy your truck outright, you can get a semi truck lease. When you lease, you go through a few trade-offs. First, you might end up paying more money over a long period of time. However, your startup cash is free to be invested in other areas. Having extra cash is vital to any business in the trucking industry.
Find Your Customers
You can’t start a commercial trucking company without customers. After you finish your paperwork and have all the licensing you need, it’s time to start finding deals.
Online is the best place to look. Sign up for an online load board service. Many of these services will require that you pay a monthly fee, which will usually be worth it in the end when you score customers. Still, you can find some of these services for free. These boards will help you when you’re just starting up to come into contact with people who need their loads hauled.
Before you begin getting clients, you’re going to want to ensure that you have marketing and a professional-looking business. This will help people to trust your company, especially when you’re just starting your trucking business.
Grow your professional status by going to industry events and networking with people that it will be useful for you to know. Join trade associations and make sure that you’re participating in social media groups, forums, and have a website where people will easily be able to contact you.
What’s the Startup Cost?
Owner-operator startup costs can vary widely from person to person, especially depending on the scale of the business you want to start. Again, keep in mind that you have financing options when you don’t have a great deal of cash for starting up.
You’ll likely gain a net income of around $50,000 to start in your first year or two, and then start two slowly increase your wages. Keep in mind that you’ll be funding things like supplies, fuel, technology upgrades, parking, wages, and more. These fees will cost you in the thousands.
That’s why it’s important to keep a cost sheet. Keep careful details of what you’re spending, so you’ll be able to minimize items that aren’t necessary.
Growing Your Company
When you’re beginning, never turn down a small job. It’s those jobs that will bring you business, and start to spread the word about your company. It’s all about growing your new trucking company.
When you really begin to grow, you’ll have to hire new drivers. You’ll be able to decide between hiring full-time drivers, or subcontractors. Full-time drivers are more loyal to your company, but cost more at the start. Subcontractors are helpful for people who don’t have a lot of up front cash, because you’ll end up having to pay less fees, taxes, and insurance.
As your client list begins to grow, your company will grow exponentially with it. As your finances allow, you’ll be able to purchase more trucks, hire more drivers, and continue to earn more money.
Five Simple Steps
When you’re building your own trucking business, think of it in five steps to make it seem less intimidating.
- Do your paperwork. Register for all the forms needed for your company and specific state.
- Acquire your vehicles.
- Build your client list, and find cargo to transport.
- Follow your budget.
- Grow your business and onboard drivers.
About TopMark Funding®
At TopMark Funding, and we’re looking to give you the best semi truck financing deals that any company can offer. We’ve been specializing in commercial trucking and heavy equipment for more than twenty years.
Your satisfaction is our main priority. Let us become your long-term financial partners by helping your business and your fleet grow. We have the know-how to give you all the guidance you need to start making strategic and informed decisions for your trucking business.
When you work with us, you’ll get great rates, low down payments, and flexible monthly payments. We want to give you our expertise and watch your business grow. Let us make your job easier. Click the Get Started Today button or give us a call at (866) 627-6644.