Launching a lucrative small trucking company can be an extremely rewarding business venture and there has never been a better time to do so than now. Many Trucking-preneurs choose to start small with a semi-truck (with or without a trailer) which he/she will personally operate before scaling. Sounds great right? Well not so fast, before you rush out and make such a grand investment in equipment you must draft an effective business plan to ensure your business structure is set up properly and according to rules, regulations, and policies, spelled out by FMCSA, DOT, and localities, etc. The following are basic measures to follow and/or consider when establishing your trucking company, for more precise information and protocol speak with one of our friendly logistics experts at Fr8 World Logi$tix today.
Some Of The Basics
Before your trucking company can haul freight, you must obtain your (CDL) if you plan to operate your commercial vehicle. Purchasing a semi with or without a trailer can cost anywhere from several thousand dollars to several hundred thousand dollars depending on the sector of the industry you choose. For example Flat Bed, Dry Van, Reefer, Over-Sized, Heavy Haul, Auto Transport, etc.
There are many things to consider when establishing your trucking company. (1) Don’t overlook the importance of proper driver training: understandably so, your initial priorities are getting licensed, purchasing your equipment, and generating revenue. Most importantly ensuring you are up-to-date on all required training, federal, local, and state documents which allows you to legally operate a commercial vehicle and such business in your respective state. (2) Make sure your truck and or trailer have passed the DOT inspection. (3) Always think safety first: This should go without saying, and don’t overlook safety measures and having the proper insurance coverage and roadside assistance plans.
Commercial Driver’s License Requirements
The FMCSA regulates the requirements for obtaining a CDL. In general, you’ll need to complete a certain number of hours both in the classroom and on the road with a training instructor before being eligible to obtain a commercial driver’s license, providing you meet the age requirement. A state-issued commercial driver’s license is required for anyone of legal age desiring to operate a class A commercial vehicle. Eligibility criteria and restrictions vary by state, contact your local DMV, FMCSA, DOT, or Fr8 World Logi$tix if you have specific questions regarding what’s required in your state.
Business Structure
Before you begin hauling freight, you’ll need your business name and apply for an Employer Identification Number (EIN) to open a business bank account. The EIN is a nine-digit tax ID number assigned by the IRS that identifies your business entity; it’s used for all of your business-related filings including tax forms etc. As with applying for any type of loan or line of credit, when you fill-out applications for accounts or permits etc. in your business name, be sure to use your company name and EIN instead of your personal information. In line with proper business protocol, always keep your business and personal bank accounts and finances separate. You’ll have to decide which type of business entity to establish for the maximum benefits of Tax Deductions, Tax Credits and Profits, etc. such as an LLC, Sole Proprietorship, C-Corp, S-Corp. etc. We’ll show you how to do all of that.
Office Space
Choosing to have a home-based office or lease/rent a space is totally up to you, however, we recommend a home-based office initially until your business revenues become profitable. Once you decide it’s time to scale up your business and rent an office space, be certain it’s cost-effective, modern, energy-efficient, safe, and convenient for yourself, your staff, clients, and visitors. We recommend setting up a PO Box with one of the many providers like FedEx, UPS, USPS, etc.
Finding Profitable Freight
One of the most difficult tasks you’ll experience as a new trucking company is finding profitable freight which is paramount to your business success. With over twenty-plus years in the Logistics/Trucking Industry we here at Fr8 World Logi$tix have nurtured and established long-term relationships with a variety of freight sources and direct shippers to sustain the level of success and satisfaction we’ve earned via our clientele. We strongly encourage you to consult with us regarding all of the freight and logistics services we offer our trucking professionals.
Insurance Options
Commercial truck insurance is more than just something that keeps your business protected—it’s also an important investment in your employees. If you do it right, you’ll not only be able to keep yourself protected from liability, you’ll also be able to keep your team safe. Commercial truck insurance policies can vary significantly in price and coverage, so it’s worth doing some research before making a decision. Ask around for referrals and talk with other local companies about their experiences with insurers. And don’t forget to shop around! Even if your current policy seems relatively affordable, it might still be worthwhile to take a look at other options out there. Finally, don’t forget about purchasing health and life insurance policies for yourself and optional for your employees. You may qualify for small business health/life insurance through a trade association like The National Association of Professional Insurance Agents, OOIDA, and the list goes on, so shop around for the best possible deal.
Financing Options
Financing equipment for your trucking company isn’t as simple as financing a car. If you want to purchase a big rig, you may need a down payment of several thousand dollars down, up to $100,000 or more, or maybe no down payment at all depending on your credit. Thankfully, there are still options available for purchasing your equipment with little to no cash. You can work out an In-House-Finance deal, purchase from an auction, or acquire a commercial business loan or a line of credit via your bank or credit union. Due diligence is paramount before applying so you’ll know what type of loan is right for your business; it’s better to start small and scale as revenue and profits permit.
Understanding DOT Regulations
The Department of Transportation as well as FMCSA requires all Professional Truck Drivers and companies they work for to comply with and be in total compliance with its regulations. In establishing a trucking company, you’ll need to have a comprehensive knowledge of these regs. You’ll also need to know how to keep your company and your drivers compliant in a manner that doesn’t cost you money or slow down your business operations. Here are some basic guidelines to get you started. (1) Make sure employees have clear written policies explaining DOT/FMCSA regulations (like not driving while fatigued for example). (2) Don’t violate driver-hours-of-service regulations. (3) Seek help from experienced industry professionals who understand the regs when you feel like you may be breaking any of them or be in doubt. You may need to hire a logistics firm like Fr8 World Logi$tix periodically just to make sure your processes etc. are aligned properly with local, state, and federal standards.
Developing A Business Plan For Success
Commercial trucking is without a doubt, a lucrative, demanding, and challenging industry. Of course with proper planning and execution, you’ll be successful in your new endeavor. Your action plan is designed to help you get started on your path as smoothly as possible. With it, you’ll develop an overall direction for your business and outline specific tasks to get you there. So get started! You’ve got a truckload of work ahead of you, and don’t forget – developing an action plan doesn’t stop here. Continue revising and updating your road map for success regularly so you can adjust your course when necessary down the line (or when opportunities present themselves). As long as you have a solid business plan in place and follow it to success, nothing should keep you from achieving your goals.
At Fr8 World Logi$tix “Finding Cost Effective Solutions To Your Logistical Problems Is All We Do!”
We love helping our Logistics Industry clientele achieve success, it’s been our core business goal for over 20 years now. On behalf of our entire team, we ask if you would grant Fr8 World Logi$tix the honored opportunity to add value to your business as you move forward on your quest for success. We know what we’re doing and we do it well. Give us a call at 713-579-1933, send an email at info@fr8worldlogistix.com or send a message (via this site) right now if you see where we can be of assistance to you and your business success, our clients come first.
