How to Start a Trucking Company

Are you a truck driver that is wanting to get a start as a business owner in the trucking industry with your own trucking company? Maybe you are diving in to become a fleet owner or a sucessful owner operator. If so, then you have probably found yourself searching for how to start a trucking company. Well, just getting your own operating authority is not enough, but you are in luck as we will cover everything you need to know to start your own trucking business in this article.

 

It’s true that trucking can be a very lucrative small business for entrepreneurs to get started in, but only if you are smart in how you go about it and willing to put in the hard work. Trucking is not a get-rich-quick scheme by any means, and it is not for everyone. However, if you are willing to work hard and invest the time and dedication into setting up your brand, you can develop a successful trucking company. In this guide, we will go through the main steps of how to get your trucking business off the ground the right way and give you a leg up on getting off to a successful start in this industry,

 

We will be covering some of the basic aspects that you will need to address in starting your trucking company, such as writing a business plan, legally establishing your company, obtaining all necessary licenses and permits, networking, buying or leasing the right equipment for your needs, selecting the proper insurance coverage for your company, understanding your income and expenses, as well as growing your business to a successful level.

 

Write a Business Plan 

 

A solid trucking business plan is the foundation of a successful trucking company. The plan should include your business structure, goals, target market, and financial projections. It’s not enough to dive in without a clear vision—many new businesses fail due to a lack of planning. 

Your business plan should cover:

• Business name and registration
• Initial and ongoing startup costs
• Operating costs such as fuel costs, maintenance, and insurance
• Financial projections and profitability timeline
• Market analysis, including target shippers and competition

Not taking these steps to consider the big picture is why trucking companies fail. Consider consulting with experienced trucking industry professionals or accountants to create realistic projections and set a path toward a successful trucking business. This will also prove to be imperative if you need investors, business partners, or trucking business loans to get your new business off to a strong start.

 

Legally Establish Your Company 

To operate legally, you must establish your trucking company as a recognized business entity. Options include a sole proprietorship, limited liability company (LLC), or incorporation. This choice affects taxes and personal liability:

• Sole Proprietorship: Simple setup but limited liability protection.
• LLC (Limited Liability Company): Offers liability protection, separating personal assets from business assets.
• Corporation: Provides greater protection but has a more complex tax structure.

Seek guidance on what structure best suits your goals past getting your trucking authority. Register your business name, obtain an Employer Identification Number (EIN) from the IRS, and open a business bank account to keep finances organized.

 

Obtain Necessary Business Licenses and Permits (h2)

You’ll need more than just a commercial driver’s license (CDL) to operate. Key requirements include:

• USDOT Number: Issued by the U.S. Department of Transportation (DOT).
• MC Number: Required for interstate trucking from the Federal Motor Carrier Safety Administration (FMCSA).
• Unified Carrier Registration (UCR): Required for operating in multiple states.
• IFTA and IRP: For fuel taxes and international registration.
• Special permits if hauling hazardous materials.

Licensing and permit requirements may vary by state and the type of goods transported. Contact the FMCSA or DOT for guidance specific to your trucking company.

 

Start Networking 

 

Networking is vital in the trucking business. Building connections with other commercial truck drivers, owner-operators, and industry experts provides valuable insights and opportunities. 

 

Tips for networking:

• Attend industry events and seminars.
• Join trucking associations and online forums.
• Connect with freight factoring providers to manage cash flow and gain insights into finding reliable shippers.

Having a network of industry contacts can provide guidance on freight rates, industry trends, and compliance updates.

 

Buy or Lease the Right Equipment (h2)

Decide whether to purchase or lease commercial  vehicles and trailers:

• Buying: Higher upfront down payment but offers equity in assets.
• Leasing: Lower initial costs and flexibility, which can be helpful for startups.

Your choice depends on operating costs, cash flow, and long-term goals. Leasing can help manage costs in the short term, while buying may provide greater control over equipment.

 

Select the Proper Insurance Coverage 

Insurance is essential for protecting your trucking business and commercial vehicles. Coverage types to consider include:

• Primary Liability insurance: Covers damage to other parties.
• Physical Damage: Protects your truck and trailer.
• Cargo Insurance: Covers the freight in case of damage.
• Freight Factoring: Helps with cash flow and payment assurance from shippers.

Speak with an insurance provider specializing in trucking insurance to ensure compliance and adequate protection for your trucking company no matter if your fleet is made up of new or used trucks.

 

Understand and Track Your Income and Expenses 

 

Running a trucking business involves significant expenses. Keep track of all operating costs and understand where your money goes:

• Fuel Costs: Use fuel discount cards for savings.
• Maintenance: Schedule regular checkups to reduce breakdowns.
• Accounting Software: Track revenue and expenses and manage taxes.

Hiring a bookkeeper or using accounting software can help maintain accurate records and manage cash flow effectively. Managing income and expenses ensures that your business remains profitable. It is important to know how to calculate the cost per mile for your business so that you know what to charge to keep your

business profitable.

 

Find Loads and Grow Your Business 

 

Finding profitable loads is crucial for growth. Options include:

• Load Boards: Online platforms to find immediate loads.
• Dispatching Services: Keep your trucks moving with steady load assignments.
• Direct Contracts with Shippers: Build relationships with shippers for consistent business.

Balance load sources to maximize revenue and diversify income. Avoid overreliance on one customer or broker.

 

Understanding ELDs

 

If you are new to the industry you may be wondering what is an ELD, or what is this ELD mandate I keep hearing about? An Electronic Logging Device (ELD) is mandatory to track hours of service for commercial truckers. It’s an essential tool that helps maintain compliance with federal regulations and offers real-time insights into operating costs, fuel usage, and more. Familiarize yourself with ELDs to streamline compliance and enhance fleet efficiency.

 

Stay in Compliance 

 

Compliance is a continuous effort. Regularly check for updates on federal motor carrier safety regulations and state laws. Remaining compliant avoids fines, keeps your drivers safe, and maintains your company’s reputation.

TAFS knows the trucking industry first hand. Let our team of trucking experts tell you more.