March 21, 2023
If you’ve been thinking about starting a business of your own, running a trucking company might be the right fit for you. Trucking is one of the most booming industries in the United States, with plenty of opportunities to make money, travel to new places, and take advantage of a flexible schedule. Still, there is a lot to learn about how to start a trucking company and many factors that go into being successful in the industry.
Trucking is one of the most booming industries in the United States, with plenty of opportunities to make money, travel to new places, and take advantage of a flexible schedule.
If you’re planning on becoming an owner-operator, your first step is obtaining a commercial driving license (CDL) if you don’t already have one. Most CDL programs take three to six weeks to complete. You can get your CDL from a trucking school, and some trucking companies even offer training programs. Many owner-operators had their start as company drivers, and it is a great way to gain experience in the industry. You’ll need to pass a knowledge and skills test before getting issued your CDL, and your state may have other requirements.
If you want to run a small fleet, but don’t plan on driving, it’s still important to gain knowledge about the trucking industry. One way to do this is to join a trucking association so you can network with other people in the business and build valuable connections. Hearing advice from industry veterans will help you run your business more effectively.
Starting your own trucking company can quickly become overwhelming if you don’t have a plan in place. A business plan will guide you as you run your business, helping you to understand the costs involved in operating and how you’ll make money. Your business plan should outline how your business is structured, how you will fund your business, your expenses, and your plan for growth. It’s important to remember that running your own trucking business means you’ll be responsible for finding your loads and determining the best routes. A long-term load strategy will help you operate efficiently and maximize your earnings.
When you’re just starting your trucking business, you’ll have a lot of upfront costs, such as business registration, equipment, maintenance, and fuel costs, so it is important that you save up in advance. Be sure to remember that your business expenses will include the money you pay yourself and your drivers if you plan to run a small fleet.
To get your trucking company off the ground, you’ll need to decide how to to structure the business. Many small trucking companies and independent owner-operators choose to structure their company as an LLC (limited liability company) to separate their business assets from their personal property. Structuring your company as an LLC also has many tax advantages.
Another option is to structure your business as a sole proprietorship. This option can keep your business costs low but also carries much more personal risk.
Whichever structure you choose, each has its benefits and risks, liabilities, and taxes. Some of those factors can vary by state. Do some research to find out which entity type works best for your business. You may want to work with a business advisor or accountant to make a more informed decision. After deciding which entity type you will use, register with the appropriate state.
If you plan to participate in interstate commerce, an essential part of starting your own trucking company is getting an active operating authority. The Federal Motor Carrier Safety Administration (FFMCSA) requires that you have authority in all states to operate. There are different authorities based on the cargo type and individual state requirements.
To apply for your trucking authority, you’ll need:
Getting your authority is a huge step in your trucking career and will allow you to start hauling freight as a trucking company. Be sure to follow the requirements carefully to avoid any potential delays.
Freight transportation is heavily regulated, so make sure that you comply with all government regulations to ensure you can keep your business running. It is important to stay on top of everything, from filing your quarterly tax returns to renewing any licenses that you may have. Obtain all of the necessary permits to run your business, and know your state and local requirements. Failing to meet these requirements can result in heavy penalties and fines.
The FMCSA requires that truckers with an authority have liability coverage. For example, general freight carriers must have $750,000 in liability coverage. Other insurance options include personal property insurance, roadside coverage, cargo insurance, and more. Every business is unique, so it’s important to explore your options to determine the right fit for you. Some contracts may also require you to have certain types of insurance, so be sure to look into this before taking a load.
Consistent payment is important to keep your business running. Unfortunately though, receiving payment for an invoice can take weeks or, worse yet, months. In the meantime, your unpaid bills can result in a negative cash flow and stunt your business’s growth. A factoring company can give you an advance on your outstanding invoices and handle collecting payments. Additionally, they can also shoulder the burden of non-payment — some companies even offer same-day payments. Of course, all of this comes at a price. So research and choose the right factoring company for you.
It goes without saying that you’ll need to get at least one truck to get your trucking business started. First, consider whether you want to buy or lease your vehicles.
When deciding if you should buy or lease, things to consider are how long you plan to keep the vehicle, your financing options, and what taxes or benefits are involved.
When you own your own trucking company, you will have to select and manage the freight loads you haul. You can either do this yourself or use dispatching service.
Successfully self-dispatching requires many tasks, such as finding available loads, negotiating rates, choosing the best lanes, deciding the freight you want to haul, and much more. This may not be a huge undertaking if you have plenty of industry experience and have worked with brokers before. However, if you want more time to manage the day-to-day aspects of your business and assistance with these tasks, a dispatching service may be right for you.
Whether you’re getting started as an owner-operator or want to run a small fleet, we’re here to help. With SmartHop, you can access high-quality loads no matter your company size or years of experience. We provide back-office support, negotiate with brokers on your behalf, and even help you manage difficulties on the road, allowing you to spend more time growing your business. We also offer competitive rates on everything you need to run your business. Best of all, you’ll always remain in control over where you move your trucks.
See how SmartHop can help you maximize your profit potential with every trip to build a healthier trucking business.