How to Start a Trucking Company
The first step to starting a trucking company is to become a licensed truck driver. The next thing you’ll need to do is obtain money for start-up fees. The costs associated with becoming an owner-operator range from simple registration fees to the cost of buying and insuring a truck. Here are some additional steps and decisions you’ll need to know when starting a trucking company:
1. Determine operation. Trucking businesses operate by bidding on and fulfilling transportation accounts and contracts. There are two different ways that trucking businesses operate. Starting a trucking company will require you to choose between the following:
- Sub-contracted drivers. Although you are the business owner, your drivers are not employed by your company. This cuts down on your start-up costs, including insurance and required equipment. However, this option gives you less control over your drivers and cuts into your profits.
- Privately-owned drivers. When you privately run your business and all operations, you will use your own equipment. You will pay higher insurance prices and hire private drivers as your employees. This option requires more start-up capital and operating costs, however, it provides owners with total control over their business and the most return on profits.
2. Set up a legal business structure. Most home-based trucking business owners prefer the LLC business model because of the lack of formality involved in running it. There are additional options at the state level, like corporations, that will help protect you from liabilities should anything happen.
3. Comply with business licenses, permits, and forms. Trucking companies must adhere to federal and state requirements, as well as tax, license, and permit regulations. If you chose to employ private drivers, they will have to obtain special driver’s permits or endorsements to legally operate your vehicles.
4. Secure a truck. If you choose to operate a private fleet with your own drivers, you’ll need to purchase commercial vehicles. You can purchase new trucks, however, used trucks work well too. Regardless, make sure the trucks you purchase are large enough to haul the type of freight that you plan on hauling. Different types of cargo require different equipment. As your profits grow you can always change or add to your fleet.
5. Buy insurance. The trucking industry imposes strict insurance requirements on businesses. The insurance you choose needs to protect your truck from damage and you’ll also need a liability policy to cover any damages that could arise while hauling cargo. Trucking businesses must be registered and bonded in order to legally provide interstate transportation services. In addition to insurance responsibilities, employer responsibilities require all companies to abide by health and safety standards and regulations.
6. Find customers. As a start-up business, there is a good chance you will not yet have the reputation needed to win large accounts. Many trucking businesses start by utilizing local contracts and attend small trade shows to build a client base. You can also call some of the clients you have previously worked for, or find jobs through a reputable job board or bidding site.
The competitiveness of the trucking industry makes starting your own trucking company difficult. However, as you successfully complete jobs, your name recognition will grow and business opportunities will increase.