Startup costs can be as low as $10,000 or as high as $200,000. Below you will find an overview of the things you’ll need to consider when starting a trucking business from scratch. These tips can apply to either smaller owner-operator companies or larger corporations. If you’re still getting your business off the ground, read on to learn how to start a trucking business from scratch and get your company up and running!
Considerations Before Starting A Trucking Business
Many people assume that starting a trucking business involves buying one or more trucks and hauling loads for clients. While you do indeed need to buy and maintain at least one semi-truck, there’s much more to it than that. There are additional costs associated with starting your own company as well as several factors you need to consider before purchasing those first vehicles. The three main categories of consideration are: finances, operations, and management—let’s take a look at each individually: Finances: Finances can be broken down into two categories – capital and revenue. Capital is essentially money available for investment in a given business while revenue refers to actual earnings after all expenses have been paid out. Capital can be provided by personal savings, loans, investors, etc.
At the same time generated through contracts with customers such as local businesses and shipping companies. Operations: At its core, an operation is just how you conduct your day-to-day business functions such as payroll, maintenance on vehicles and equipment (such as fueling up when required), keeping records (such as when receiving fuel), etc.
If you’re looking to get into trucking for yourself, it can cost to purchase your own truck. This price will vary depending on what kind of vehicle you choose. You also need to consider how much it will cost you to start your business; while there is no set fee on how much money is required, some people say that you should be able to cover all of your start-up costs with around $10,000 in liquid capital—that’s what’s in cash in your bank account. Keep in mind that most new businesses have failed within two years due to lack of capital, so avoid putting yourself at risk by starting with too little cash. It’s better not to break even than run out of money.
Your truck is more than just your office, it’s also your life support system on wheels. But you don’t have to spend tons of money on professional safety equipment if you don’t want to, or can’t afford to, buy it new. You can start out by buying used safety equipment that has already been tested and is in good working order. Just make sure that you do research online about any safety equipment that you want to buy used before making your purchase. If you are planning on operating under an LLC instead of as an individual, then I highly recommend buying all new commercial grade equipment for your truck. My reasoning behind that being because when you file insurance claims with your company policy, they will not be able to dispute what condition your truck was in at time of accident since everything would be brand new. In which case, having used equipment could raise eyebrows when filing a claim. As much as I hate spending extra money up front on brand new gear for my business when starting off, having peace of mind at time of accident makes up for everything! Never skimp when it comes to health and safety—the repercussions could end up costing you a lot more down the road! You’ll also save yourself a lot of hassle with insurance companies fighting over what’s covered if they think that commercial grade materials were involved.
Licenses & Permits
A common mistake made by aspiring independent contractors is to get their business up and running before obtaining licenses and permits. You can get into some serious trouble with government officials if you don’t have everything in order, so make sure you’re fully prepared for operating your own trucking business in your state or region. The best way to do that is to visit your local Department of Motor Vehicles and ask about what you need to run a successful trucking business—and follow any instructions they give very carefully. Obtaining all necessary permits and credentials could take weeks or months, but it’s one of those things that could sink your entire entrepreneurial endeavor if ignored.
Set aside time in your schedule to go through each process in a methodical manner and remain patient while waiting for licenses and certifications. If possible, begin applying for any needed paperwork as soon as you figure out when you want to start your trucking company.
Accounting Software (QuickBooks Self-Employed)
What’s your route? Freight brokerage companies act as matchmakers, pairing carriers with loads to haul. Freight brokerage isn’t for everyone, but it can be an excellent way to start out in trucking. The first step is locating freight brokers who might have available loads you can take. The next step is signing up with one or more brokers and making arrangements for payments and pickups. And then you’re on your way!
If you’re starting a trucking business from scratch, you need to establish a freight brokerage in addition to your truck and company name. Freight brokerage is what allows you to hire out your truck when it’s not being used by yourself or your drivers. Establishing a freight brokerage requires going through an intermediary—called a freight broker—who sells transportation capacity on behalf of all companies that have capacity available, which means any company can sell its own capacity or that of its clients. In essence, it is just like having your own internal broker but instead of negotiating fees with an individual carrier, you negotiate fees with multiple carriers for multiple needs, either directly or through brokers who aggregate loads from many different shippers and suppliers. Starting a trucking business from scratch takes money. It takes equipment, facilities, other people, insurance policies to cover damage done by your employees while operating your trucks – both financially for repairs to victims’ property caused by employees under yours or their supervision as well as liability protection so should they cause bodily injury to someone else due carelessness on their part – but above all it takes money.