Congratulations on your decision to become a trucking business entrepreneur! You have the goal, now it is time for action. Here are a few of the basics you will need when starting on your business journey:
There are several steps you must complete before hauling under your own brand. The first step is to form a business plan. A business plan outlines your company goals, operations, and financial projections for the next several years. Your business plan helps streamline your business objectives and keep you on task in order to complete your business goals. The more detailed the plan, the more likely you are to succeed.
Step 2 – Register Your Company
Once your business plan is in place, it is time to make your company legal. Start with the name. You need to register your company with your company’s home base state. Registering includes determining your business model (LLC, sole proprietor, etc.) and registering a trademark. The trademark includes your logo and possible slogans. Visit your state’s website to register your business.
Step 3 – DOT and MC Numbers
Next, you will need to apply for your DOT and MC Numbers through the FMCSA. Your DOT Number is unique to your company and used to track your safety scores and information. Your MC number, also known as your Operating Authority, states what type cargo your company is legally allowed to haul. First time applicants can apply for both through the FMCSA’s Unified Registration System.
Step 4 – Heavy Use Tax Regulations
If you register a commercial motor vehicle with a gross weight of at least 55,000lbs in your name, you will need to file the federal Form 2290 – Heavy Highway Vehicle Use Tax Return. Find Rules for filing and the Form itself on the IRS website.
Step 5 – International Registration Plan (IRP) Tag
If you plan to haul from coast-to-coast or up through Canada, an IRP Tag is necessary. An IRP Tag allows you to haul freight across US State Lines, in Washington D.C., and Canadian Provinces. Remember to register your tags in your company’s home state.
Step 6 – International Fuel TAX Agreement (IFTA) Tag
Simply put, IFTA reports the fuel use of trucks over the 48 contiguous States of America and some Canadian provinces. If you are planning to cross state lines, you need an IFTA Tag. Visit the website of your company’s home state to apply.
Step 7 – BOC-3 Form
The BOC-3 Form designates a third party (person or company) who is legally able to receive and forward legal documents on behalf of your company. You will need representation in each state in which you operate. For information about the form check out the FMCSA website.
Step 8 – Insurance
After filing your forms and tags, the insurance is the next big item on your list. Without insurance, you will not be able to haul loads because most shippers require insurance before they will hand over their cargo. To help with insurance costs, enlist of a premium finance company. They help lower your premium costs and the good programs will even help you save up for your monthly payment.
These 8 items are the must haves when starting a trucking company. Be sure to check with your local state to make sure you do not need any additional tags or licenses. Once all your bases are covered, you are ready to hit the road. Come back for Part 2, Becoming a Trucking Entrepreneur – How to Find Operating Capital, where we will cover finding the best loads for your business.