How to Legally Establish a Trucking Company
With the trucking industry generating over $726.4 billion in revenue in 2015, starting a trucking business can now be extremely lucrative. The trucking industry serves as the backbone to keep things going, and as long as people have demand for products, freight transportation will be necessary in the years to come. Now is the perfect time to learn how to start a trucking business. Demand is strong, interest rates are high and the economic outlook is positive. The key to success is to maintain a balance between costs and revenues. Make decisions knowing what impact this will have on costs, charge customers enough to pay costs, stay competitive, and drive as many billed miles as possible. This may seem like a fairly simple balance to maintain, but be aware of the whirlwind. Operating your freight forwarding business as a properly structured limited liability company or limited liability company (LLC) sets boundaries between your personal assets and business liabilities. In addition to protecting your personal assets as a business owner, inclusion offers several legal, tax and business benefits. Use our business start-up wizard to decide which structure is best for your new transport business. You don`t need to invest as much in your trucking business before it makes a profit, and you can grow your business better as demand – and your profit margin – increases. Finally, you can learn how to start a trucking business without driving by hiring additional employees and drivers. Knowing how to start a trucking business and build long-term sustainability from day one is critical to the overall success of your new business.
Diversify and grow your customer base to ensure long-term resilience. The best rule of thumb is not to allow a customer to represent more than 20% of your turnover. Be aggressive and always look for new sources of cargo. If you have not yet received a U.S. DOT number, you will need to register for a DOT number form before you can apply for a truck permit. Note that the old MCS-150 form is now only used to update the existing US-DOT number and not to obtain a US-DOT number. 1. Gain driving experienceFirst, you need a Commercial Driver`s License (CDL). You may attend a private truck driving school or some trucking companies have their own training programs or may sponsor you to attend a CDL school. Many drivers who eventually become owner-operators will bite their teeth in the business by serving as corporate drivers for a few years. As already mentioned, buying a commercial vehicle is not an easy task.
Therefore, you`ll likely need to secure seed funding to get your truck business off the ground. In addition to the financing options listed below, you should also consider opening a business bank account and credit card. Another way to start your trucking business is to get a business loan. A lender provides the borrower with a certain amount of money to repay for a certain period of time. The interest rate associated with the loan may remain fixed throughout its term or vary due to economic factors. First, create a unique business name and check online if it`s available. Then submit it with your state. Complete an application for your shipping authority with the FMCSA.
Register your Motor Transport Number (MC#) for interstate commercial transportation. High freight volumes and high freight rates are expected to continue from 2021 to 2022, with truck traffic projections dominating the distribution industry for another decade. This is the perfect time to learn how to start a trucking business and build a successful business in this promising environment. Just as you would start a new job with a new perspective and set of goals, you should also start your new trucking business with an organized plan. A business plan is your roadmap to success and can be refined as your business grows. It helps you get organized, identify goals, articulate your value proposition, and present potential obstacles on the road. A solid business plan is an essential step in any business. The Small Business Association (SBA) recommends that your business plan be projected 3 to 5 years in advance. It should also detail your plan to increase sales. Your commercial vehicle will be one of your most important investments when you`re learning how to start a trucking business – it`s important that you choose the right one for your business. When choosing your truck, there are some of the factors to consider: If you have a passion for being your own boss and have a keen interest in truck driving, this is the company for you. Your earning potential is limited only by your determination and abilities as an entrepreneur.
If you`re starting a trucking business, you`ll need to file taxes with the IRS. It is important to form the type of truck business structure you want to set up. It can be a sole proprietorship, partnership, limited liability company (LLC) or company. They vary in nature, so talk to a tax advisor. The trucking industry is expected to need 100,000 drivers in the near future, and companies are desperately looking for drivers to fill the void. If you want to understand how to start a trucking business, this will likely give you a tactical advantage, given that you`re helping to meet the need for more trucks and drivers. One of the first steps in starting a freight forwarding business is to fulfill your freight forwarding authority. Freight forwarders require an operating license if they work as rental carriers across state borders for vehicles with an authorized gross weight of more than 10,000 gross authorized weight (GVW). Almost all industries welcome innovations, including the truck industry. Increasing the efficiency of your fleet and implementing fuel-efficient routes and logistics will help you improve your value for your customers. This gives you a competitive edge and positions your business for long-term success.
When you start your trucking business, you can buy or lease trucks, whichever best suits your needs. If you have the initial working capital to cover costs and want to operate a small fleet with a few trucks, buying multiple trucks at the same time from a dealer can result in a discounted price per vehicle. As you learn how to start a trucking business, you`ll find that the most time-consuming part is the paperwork required to meet many of the FMCSA`s requirements. The good news – it can take a long time, but fortunately, it`s not hard to complete. Apply for a small business bank account and a business credit card. It`s important to separate personal funds from business funds for tax planning and establish a good business credit score in case you need a business loan or financing in the future. You can start accumulating your business credit immediately by using your business account to apply for a business license, licenses, and insurance when you start your trucking business. Learning how to start a trucking business isn`t hard – use the nine steps listed below to follow a proven path to success.
Trucking is a profitable industry. Trucks supply about 70% of the products in the United States, worth about $700 billion. This opens up opportunities to increase sales and profits for your trucking business, whether you are an owner or owner-operator. Look around and get several quotes before deciding which insurance provider is best for your trucking business.