How to Start a Trucking Business: Your Step-By-Step Guide
What if you could turn your trucking experience into your very own business?
Many truckers love riding the open roads, but they don’t always love working for someone else. Starting a trucking business is a great way to keep doing what you love while earning the money you deserve.
Nonetheless, many truckers and entrepreneurs don’t know how to start a trucking business. But with our complete guide, you’ll have your business up and running in no time!
Consider the Niche
In some ways, starting a trucking business is like starting any other business. Before you really dive in, you need to find the right niche for you and your services.
For example, you’ll likely start out as an owner-operator (more on this in a minute). That means you’ll be facing stiff competition from the major carriers out there.
However, you can find markets that the large carriers do not cater to. By specializing in these markets, you can safeguard your profits while effectively cornering this section of the market.
When you imagine a major trucking business, you likely imagine fleets of trucks and a rugged team of drivers. Before that can happen, though, your business is likely to just be you and your truck.
This can be relatively easy if you already have the basics. This includes owning your own truck and having the appropriate commercial driver’s license. If you do not have these things, then getting your license and securing a truck should be among your top priorities.
Even if you have these resources in place, you cannot immediately go into business for yourself. You will first need to take out the necessary paperwork.
Paperwork is a necessary evil in any business. And if you’re starting a trucking business, you’ll have a lot to complete.
First, you’ll need a United States Department of Transportation number. Second, you’ll need a Motor Carrier operating number.
Other paperwork includes obtaining International Fuel Agreement stickers as well as an International Registration Plan. Your business will also need insurance (more on this later on), and you may have additional registration and license required by your state.
Making a Plan
Your trucking business won’t go far if you don’t have a business plan in place. The type of plan you create will likely reflect your personality and the intended nature of your business.
For example, a traditional business plan takes longer to create but is more comprehensive. It includes factors such as market analysis, sales strategies, business management structure and an executive summary.
Other business plans are “lean” and reflect more of the modern startup mentality. These simpler plans include major activities, partnerships, customers, and costs.
The “lean” plan is less rigid and reflects a business that may change its approach in the future. Meanwhile, the traditional plan reflects a business that intends to operate in the same way on behalf of the same customers for the foreseeable future.
The next major step is to obtain funding. Exactly how much funding you need depends on the scope of your starting business.
It will likely take less than $10,000 to simply obtain permits, take out insurance, create marketing, and complete various state requirements. This is assuming that you already own your truck.
If you do not own a truck or intend to utilize multiple vehicles and drivers, the cost can easily reach $30,000 or more. This is why the business plan is so important – it helps you avoid borrowing more (or less) than you actually need.
Even if you own your own vehicle, you may consider taking out any necessary repairs before getting started. That’s why you need to learn everything you can about semi truck repair.
To keep your business afloat, you must understand your profit margins. And that means understanding what you should charge and what your potential expenses will be.
It’s easy to calculate fixed costs. These are things like truck payments, insurance payments, permit costs, and business rental costs.
Your main variable cost is your mileage. You may drive more on some months, requiring more fuel and (therefore) additional costs.
It’s possible to control costs by buying fuel wisely (more on that below). However, it’s also important to charge the right rate per mile.
Try to find at least 10 loads going in the same direction and find out how much your competing brokers pay and how much they charge shippers (usually between 10-15% higher than the other amount).
Once you have an idea of what the competition is charging, you can charge a competitive price and make a decent profit.
Making a Fuel Plan
There is relatively simple math to buying fuel. Specifically, you want to buy fuel at a cheap base price and not just a cheap pump price.
Because tax prices are tied to the states you drive through no matter where you got the fuel originally. If you chase pump prices instead of base prices, you may end up paying thousands of unnecessary extra dollars in your travels.
Your business is going to need insurance. Exactly what kind of insurance you get depends on your particular needs.
As with standard car insurance, you must consider insurance to protect your vehicle and the vehicles of others. And, of course, you want enough insurance to protect against damages caused by you or your drivers.
When you first go into business for yourself, you will likely work with load boards and brokers. However, the real money is to work directly with shippers.
Take the time to establish relationships with potential clients. And don’t put your eggs in one basket. The last thing you want to do is lose the whole business because you lost a single client!
How to Start a Trucking Business: The End of the Line
Now you know how to start a trucking business. But do you know how to achieve the growth mindset required for success?
We specialize in helping small businesses grow ever larger. To see what tips we can help you master, check out our Mindset articles today!