Did you know that the trucking industry exceeded $700 billion in annual revenue in 2021?
Want to know exactly how you can capitalize on this booming industry?
In this article, we will explain the basic fundamentals of how to start a trucking business. Read on for some effective steps that you can implement today in order to realize your goals.
1 Create a Business Plan
Regardless of the type of business you’re thinking of starting, having a business plan is always a smart move.
The first few years of any business are usually peppered with pitfalls. But a surefire way to insure yourself against problems and obstacles is to have a business plan.
This is because having a plan empowers you by giving you a strategy for growth, allowing you to realize your business aspirations.
Your business plan should include things such as potential pitfalls that you might face, your goals, a clearly outlined value proposition, and an honest review of your financial details.
As you’re looking at starting a trucking business, make sure to include information on the common types of services that you will be providing, and the rate you’ll charge customers.
2 Obtain Relevant Licenses
When starting a new trucking business, it is vital that you have all your licensing requirements covered.
To make sure all your bases are covered take the following steps:
- Visit the DOT – The DOT (Department of Transportation) will provide you with the required forms for starting a trucking business
- State License Office – Your state business license office will help you check for any additional state requirements for your business
- Legal Advice – To cover your bases, talk to a lawyer to ensure your business and legal framework are all in order
3 Get the Right Insurance
Insurance is a significant, yet essential expense for trucking businesses.
Types of trucking business insurance required for transporting freight include:
- Primary Liability – Taking out $750,000 of cover will safeguard you against accidental damage claims
- Cargo – Approximately $100,000 commonly covers damage to the freight and/or theft
- Physical Damage – This type of cover insures you against truck accident where you’re not liable
- Per Load Insurance – This type of cover insures you when transporting specialty loads
4 How to Start a Trucking Business Vehicle Plan
When starting a trucking business, you have the option to either purchase or lease equipment.
Below are some common types of leases:
With this particular lease, you’re responsible for things such as vehicle maintenance, ensuring taxes are all paid, and keeping permits up to date. At the end of this lease plan, you can part ways or request a renewal.
Terminal Rental Adjustment Clause
This lease requires a down payment upfront. Then at the end of the term, you are eligible to purchase the truck at the vehicle’s residual value. Alternatively, you can choose to let the leasing company sell the vehicle.
These types of lease plans are aimed at truckers who can’t afford a down payment or have a bad credit rating.
Although this option may look good in the short term, the long-term overview of using this option normally leads to truckers paying a significant amount more than they would have done when compared to obtaining bank loans.
Make a Start Today
Although starting a business of this nature may seem complex, it’s actually fairly straightforward. By committing to stay consistent, by following the action steps in this article, you’ll be well on your way to realizing your goals.
So now that you know how to start a trucking business, what’s stopping you from starting the process today?
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