It takes more than recruiting drivers and dispatching them to deliver loads to run a trucking business. It needs a business strategy, just like any other firm. Creating a trucking business takes careful planning. You want to elevate your career from owning a truck to running an entire operation? For that, you’ll need advice that comes from experience.
But advice isn’t enough.
You’ll need services. These are specific services that will help you create a leading company. Paperwork, insurance, compliance preparations, financing, obtaining trucks, and finding drivers – all these actions need to be executed with precision.
Here’s the list of things you need to create your trucking business plan.
1 Set your goals
To start setting the groundwork for your business, there are a few things you should ask yourself.
The size of your company is among the most crucial factors. Do you want to transport goods locally or long distance?
Operating a trucking business that distributes over state lines has its own rules and specifications. Each state has different regulations that have specific criteria for commercial drivers.
Start setting your goals by determining your deficiencies and advantages. That way you can organize your tasks to fix your weaknesses. Do it either through organizational changes or by employing experts.
A good look into what you can do alone and what you are not adept at will make it easy for you to set your priorities.
2 Get financing for your business
Before any guidance, you need the finance. Whether it’s for upgrading your infrastructure, expanding your fleet, or acquiring new employees, you need financing to build a trucking company that can grow.
Generally speaking, loans are the common pathway for startup trucking businesses. There are several organizations that provide financing for trucking companies. But, acquiring the means is only the first step. Knowing how and where to spend them is much more important.
Purchasing New Trucks – a big reason for loan acquisition is getting new machinery. A good financing plan will help you acquire trucks for your fleet. Truck company owners should be careful when spending money on trucks. Because truck shopping can drain your resources fast.
Instead of buying new trucks for large amounts of money, maybe it would be wise to search for used truck dealerships. You could get well-preserved trucks with thousands of miles still in the tank. These can cost up to 3 times less than new trucks, so it can be a pretty good bargain.
If you can search for 2019 and younger trucks. Trucks that are 5 years old or less are more likely to be in pristine condition.
Also, always check for lease options. Some dealerships offer great rates and comfortable down payments. With a proper working force, your trucks will get to the road immediately and pay off themselves.
Hiring More Drivers – a big task for trucking companies and a big money pit for their owners. Why? Because the trucking industry is always in motion. And truckers are always changing environments.
This is particularly true for owner-operators who are always on the lookout for better conditions and a more productive relationship.
Turnovers in the trucking industry are among the highest in the modern economy. It’s hard to acquire a driver to fill your truck and even more challenging to keep them at your company. Company owners invest lots of money to find qualified drivers and hire them.
Sadly, some of them still rely on outdated methods of job advertising, wasting thousands of dollars with no effect. Currently, the best investment for driver acquisition is using digital marketing.
But, not anyone can do that.
It’s not enough just to buy Facebook or Google ads. If the ads are poorly designed, they will produce zero leads and no results for your company.
You need experts in the digital marketing field to create your company’s brand and set it on digital platforms. If financed properly, this investment can return in the first 6 months.
Investing in New Technologies – There is more to transportation than just the truck. It costs money to keep track of technology that improves the performance of your fleet.
Fleet tracking, truck equipment, electronic logs, centralized systems, forward-facing camera systems, and other technologies – all of it makes a difference when it comes to the efficiency of your trucking operations.
3 Acquire the necessary paperwork
You have to submit a ton of paperwork to operate a trucking business. You won’t be able to transport freight if you lack many licenses and permissions. The documents and registrations you’ll need are listed below.
- EIN
- DOT/MC Number
- DUNS Number
- FMCSA
- BOC-3
EIN
EIN is the employer identification number. It’s also called the Federal Tax Identification Number. It is used throughout the tax season to assist the IRS in locating your company.
If not, you risk paying business taxes that don’t count because the IRS doesn’t recognize you. Thankfully, getting an EIN is simple thanks to the IRS. The IRS website offers an online application. Prior to that, company owners had to complete a Form SS-4.
Applying for an EIN is completely free.
DOT/MC Number
Getting a DOT (Department of Transportation) or MC (Motor Carrier) number is the next step. Every company needs a USDOT number. But, not every trucking operation requires an MC number.
A USDOT number is a special identification that grants the business permission to move goods across state lines. On the other hand, the transportation of controlled items is covered by an MC Number.
It also includes travelers. You can apply for either one or both of these numbers. Do it through the website for the Federal Motor Vehicle Standards,
Remember that you’ll also need to appoint a representative to act on your behalf in each state where your business is active.
DUNS Number
New business owners often aren’t aware that they require a DUNS (Data Universal Numbering System) Number. However, it is still essential to complete the necessary documentation.
This number keeps track of your contact information and various financial assets. These assets affect the financial stability of your company.
If you ever want to collaborate with another business, it will be useful. Most other people will inquire about your company’s credit rating to decide whether it’s worthwhile to partner with you.
They can get your DUNS number and use it to access all the information they require.
FMCSA
Additionally, you’ll need to register with the Federal Motor Carrier Safety Administration and submit paperwork through them.
You must complete a number of documents that they have. The safety of the vehicle and its drivers is under the control of this government division.
They will be in charge of safeguarding and upholding your right to move products both inside and outside of a state.
BOC-3
To satisfy the FMCSA, one of the key points is appointing a processing agent for your business. You now have the department’s permission to move items. Processing agents are present in every state in which you wish to operate in. That’s why you might need to hire many processing agents.
You must add to your BOC-3 form for each agent. Submit the BOC-3 form to the FMCSA in order to identify your processing agency. It demonstrates to the department that you are in compliance and have a representative on hand.
Since a BOC-3 can be completed online on the FMCSA website, filing one is also rather simple.
4 Complete insurance requirements
Insurance is crucial to operating within the established regulations.
Until you acquire insurance, you won’t be able to get your USDOT number. That’s because having insurance is one of the clauses of the USDOT compliance check.
The cost of insurance can be high for trucking companies. The basic minimum that you are allowed to hold our policies with a $75,000 surety bond and coverage of $750,000.
You may be required to have maximum coverage by some leasing firms. As a result, your initial monthly payments may be extremely pricey.
You should make sure you have a copy of your insurance policy once you have one.
Additionally, the driver will require a copy to present to any officers who may stop them.
5 Acquire clients who want your services
Finding clients is one of the most difficult parts of running a trucking company. It can be challenging to identify who requires a transport company unless you’re well-established in the trucking industry.
Fortunately, there are a few resources that might assist you in locating your first customers.
Firstly, there are freight brokers. Freight brokers are experts that can help you get your first loads and launch your operation.
They can be found online as well as at physical locations. A freight broker works with companies and posts employment openings within a database. Depending on your arrangement, they can also secure exclusive deals for your company.
A broker is the best choice for new firms because they have the complete client lists and databases prepared for you. That’s something companies spend years building through relationships with clients.
Brokers will create connections for you and help your business thrive. Their main advantage is searching the database for the client that best fits the specifics of your business.
Additionally, brokers are frequently the first to learn about new clients. They use their connections to find companies who require transportation.
You can also get help from a trucking expert with a number of business-related issues. They can give you advice on which market choices best fit your current needs.
For example, different clients and different routes require different organizational solutions. Experienced owners will help you decide on whether to hire company drivers or owner-operators, depending on those factors.
All in all
Knowing which steps to cover before embarking on your journey of creating a company will make the process much quicker and more efficient. By covering these key points, you already have a starting advantage and your startup has a lot more chances.
Set your goals and ambitions by looking at what your abilities are. Start from what you can do and more importantly, what you can’t do. By realizing your deficiencies, you’ll be able to hire the right people to help you cover them.
If you need managers, dispatchers, brokers, or compliance specialists, you’ll either employ them or hire them as external consultants. By knowing your strengths and weaknesses, you’re already on the right track.
Getting a loan is easy. However, directing your assets towards the right goals is more of a challenge. Know your priorities and direct your money towards what you need most. Many companies start with acquiring trucks immediately. But if those trucks lay empty in your yard, you’re not going to see profit from them.
Invest in finding new drivers and scale your business with an experienced crew of qualified truckers.
Make sure that you don’t skip the basics. Insurance, paperwork, and compliance are essential. There are professional regulation, insurance, and compliance advisors if you don’t want to worry about the boring paperwork. Hiring outside help for that is never a bad investment.
When your company is ready to operate, you’ll need someone to operate for. Acquiring clients can be a challenge, but with the help of brokers, your fleet will be on the roads in no time.
Cover the basics first. See profit later.