Business 101: The Main Steps to Starting a Trucking Company
In a year marked by supply chain issues, there’s never been a more important moment to think about how our goods get into the hands of consumers. The trucking industry has been on a steady uphill climb for years now, moving to meet higher and higher consumer demand for quick and ready consumer goods.
If you’re looking to get in on the action yourself, you may need to get familiar with the steps to starting a trucking company.
Trucking companies can offer lucrative and satisfying work. There are a wealth of different reasons to consider getting into the world of trucking.
However, there is a learning curve to getting into the work if you don’t know anything about the industry. What do you need to know if you want to launch your own trucking business?
Read on and we’ll walk you through the basics that you’ll want to get familiar with.
Start With a Proper Plan
Launching a trucking business is just like launching any other type of business: before you can take any real action, you need to come up with a very solid plan on paper. This is why coming up with a trucking business plan should be your very first course of action, before any money is put down.
What is in a trucking business plan? A whole wealth of important information. You should essentially craft a document that could answer any question anyone might have about your new business enterprise.
Layout all of your plans for the future, including all of the start-up costs and purchases you’re going to make.
Calculate and show the total costs you’ll need to face to get going, as well as your anticipated yearly spending. Sketch out your plans on how you’re going to get the financing you need to make these costs something you can realistically meet.
You’ll also want to show projections of how this enterprise can eventually become profitable. Do your research, determine how much money you might be able to make per month based on the specifications you’ve established.
Your business plan should also include information on your company identity, your branding, and your marketing goals. How are you going to secure work, and what are you going to use to get other companies to hire you?
Last but not least, a proper business plan should take the time to point out both the strengths and potential weaknesses of your business. What risks are you facing, and how might you mitigate their impact? Planning for the worst is an important part of the business planning process.
At the end of the day, you should have a document that serves as a helpful roadmap for yourself, and a communication tool for others.
Legally Launching Your Business
Once you have a solid idea of what your business is going to look like, you can start the work of turning this dream into a reality. The first step towards doing so will require you to register your new business with the state government.
First, you’ll need to decide what kind of structure your new business will take. Are you going to operate as a corporation, a limited liability company, or one of the other forms of business that are available to you?
You’ll need to do some research on the pros and cons of these different forms of incorporation and determine which is best for your purposes. The point of these business forms is not just to meet legal requirements, but to protect your personal legal and financial needs.
It’s best to keep your business and your personal life legally separate, should anything go wrong at some point.
If you’re uncertain of what you should incorporate your business as, you can hire a business lawyer near you; it’s worth the investment. They can help you make a decision that’s going to pay off in the long term for your business.
Submitting Legal Paperwork
Once you’ve made this decision, it is time to notify the state. You can reach out to the state government with your intention of starting a business, and they should assign you a registered agent who will be your main point of contact.
They will represent the state and will be the one who signs for the government on all of your legal paperwork.
You’ll submit a small amount of paperwork with your business name (you’ll need to have landed on a permanent one by this point) and other details and information. After this paperwork is processed by the state, you’ll be assigned an official EIN number.
The EIN, or employee identification number, is like a social security number for a business. It’s a nine-digit number that you’ll need in order to open a business bank account or file your taxes. Once you’ve been given this number, you are officially seen as a business in the eyes of the state.
While there’s still more to do, you’ve officially begun.
Licenses, Permits, and Certifications
A trucking company is a particular type of business. It involves the operation of large machinery on public roadways. Trucking accidents remain a major threat to normal civilians, so in order to operate, you’ll need to take all the necessary steps to prove to the state that you’re responsible and upstanding.
That means having a number of licenses and permits in place before you start officially conducting business. The exact certifications that you’ll need will vary depending on where you are operating and what services you are providing.
No matter where you are, it’s likely you and your drivers will need to obtain commercial driver’s licenses in order to operate commercial trucks. You can obtain these at your state’s licenses agency.
You’ll also most likely need to obtain a USDOT number from the Federal Motor Carrier Safety Administration. The USDOT number is an official reference number that the administration can use when inspecting and auditing your business. You can’t run without one.
You might also need a motor carrier operating authority number, or perhaps multiple of these numbers, depending on your services.
If you’re planning on operating across multiple states (as many trucking companies do) there are different credentials from different states that you’ll need to obtain. Planning this all out ahead of time or working with an experienced business lawyer will ensure you don’t run into trouble once operating.
Purchase or Lease Proper Equipment
Now for the step that’s probably hovering the largest in your mind: purchasing or leasing all the equipment you’ll need to make your trucking business into a reality.
The main purchase you’ll need to make is obviously the trucks themselves. You’ll want to take a long time to consider which trucks to invest in and lease for your company. Consider what kind of cargo you’re expecting to haul and how much space you’ll need.
Will you need special carrying features, such as a refrigerated compartment? It all depends on what kind of products you think you might be moving. You should try to have as solid of an idea as possible to ensure that your trucks provide the best possible reality for your business.
Depending on your budget and funds, you’ll have to decide whether buying or leasing trucks are better for your new enterprise. This is not a decision that you can be advised on broadly, it will be very specific to your personal experience, budget, and so forth.
It goes without saying that leasing will be more affordable for a new business, but it can also be a burden month-to-month.
In addition to the trucks, you’ll need to invest in a wide range of equipment that can help your operations run smoothly. Two-way radios for your drivers are a good example. These are so that they can communicate with you or with each other while out on the road.
You can check out this service page if you’re looking for more information on this kind of product. Investing in the gear needed to ensure your team can do a job will help bolster the overall success of your new business enterprise.
You’ll also want to invest in the necessary insurance policies for all of these goods to protect yourself against risks that might arise in the line of business.
Important Steps to Starting a Trucking Company
If you’re looking to launch your own business this year, you’ll want to understand all of the steps to starting a trucking company. The best trucking companies start their enterprises out on the right foot, and you can do so as well by following the above steps.
Need more advice on running a business? Keep scrolling our blog for more.