What’s involved? How do I start a trucking business?
So you want to learn how to start a trucking business. Picture it now, the highway whistling by and the sound of rubber hitting the road. You’re on your own and free. How do we get there? Let’s discuss the mile markers you’ll pass along the way to your successful trucking business.
It all starts with a plan.
Your business plan should show what your revenue and expenses are expected to be. There needs to be a written business plan for every business. Whether providing direction or attracting investors, a business plan is vital to your organization’s success. But how are you going to write your business plan? There are plenty of resources including the SBA (SBA.gov) that can help you with your plan. A business adviser is also a good way to figure out your best plan. See more at Entrepreneur.com.
Decide on what kind of trucking business you want to run.
Common trucking business structures include:
- Sole proprietorship
- Limited Liability Corporation (LLC)
- Corporation (C-corp, S-corp, etc.)
Each has distinct pros and cons and differ from one state to another. A business or tax adviser is a good resource to contact about this. It is very likely you’d discuss this during your initial planning with a consultant or advisor.
Get a CDL: Some trucking businesses have their own training programs.
You will need to get your commercial drivers license (CDL) first and get some experience. Some trucking companies have their own training programs. Many drivers who eventually become owner-operators start as drivers of the company. Each state has its own requirements for commercial drivers.
It is a great responsibility to drive a commercial motor vehicle. Special skills and expertise are required. Most drivers are required to obtain a commercial driver’s license (CDL) through their home state (having a license from more than one state is illegal). See more at FMCSA.gov.
Get a handle on your start-up and operations expenses.
The tractor and/or trailer(s) are going to cost a lot of money, plus licensing requirements will add up with the registration cost. Maintenance and parking also contribute to the cost of starting a trucking company. There are many ways your operation can be funded. You’ll need cashflow once you’ve funded or bought a truck and trailer.
Factoring is a very common and extremely quick way to get the cash you need to pay for fuel, tires, maintenance and other incidental costs involved in running a hot-shot trucking business. Learn more about the differences in factoring and bank financing here.
Get Started Today.
Lease a Truck and/or Trailer Depending on Your Business Plan
Operating (Full-Service) Lease: Maintenance, taxes and permits are your responsibility and you leave at the end of the lease.
Terminal Rental Adjustment Clause Lease: You create a tiny down payment and you can cover the value difference at the end of the lease and buy the truck.
Lease-Purchase Plans: Theses are for truckers with bad or unestablished credit and/or insufficient funds to pay a down payment and purchase a truck.
After careful planning and getting a CDL, you’ll need to get compliant according to the USDOT.
The FMCSA monitors and ensures compliance with both safety (all carriers) and trade (for-hire carriers) regulations. Companies may find that they are subject to both the registration requirements (USDOT number and MC number) or one separately. To find out if you need to apply for a US DOT number, click here.
Operating authority of FMCSA is often referred to as “MC,” “FF,” or “MX,” based on the type of authority given. In contrast to the USDOT number application phase, a company may need to acquire numerous operating authorities to support its scheduled business activities. The Operating Authority shall determine the type of operation that a company may operate and the cargo that it may carry.
The type(s) requested by the Operating Authority will affect the type and level of insurance required by FMCSA. Therefore, carefully select only the type(s) relevant to the business of the operating authority.
All for-hire carriers are required to have authority from the DOT to transport freight across state lines. Your authority will also determine which types of freight you can transport. More information is available from the FMCSA here.
You’re Going to Need an Insurance Policy
FMCSA needs only $750,000 main coverage of liability, but most shippers / brokers need $1,000,000 to load you. The most popular cargo application is $100,000, but that would rely on what you’re carrying and for whom you’re carrying. More specific information is available from OOIDA.
Run with your business plan and become a trucker.
Sunbelt Fuel Card – Save on fuel costs at more than 1,900 truck stops nationwide.
Freight Factoring – Improve cash flow without debt, with Sunbelt Finance, LLC.
Mobile App – Keep track of your progress using the Sunbelt Finance app.