In many ways, the trucking industry serves as the backbone of America, bridging the gap between customer and seller, and solving the problem of transporting goods en masse. The trucking industry plays such a critical role in the economy that a 2015 report by the American Trucking Associations (ATA) shows that trucking companies generated over $700 billion in revenue in 2014. The industry also employs 8.9 million people across different trucking-related jobs.
As markets grow, so too will the need to transport commercial goods between states and cities, which in turn, fuels demand for new transportation and logistics companies. Although the industry can be brutally competitive, it’s not impossible to start your own successful trucking company. Below are a few steps to help you get started.
- Create a business plan, do your research, and check tax obligations
A trucking company is a business, and like any other venture, you’ll need a solid business plan to serve as a map through the startup process.
- In your business plan, write down your company objectives and form the outlines of your strategy.
- Think of the accounts you intend on servicing and business projections for expected earnings
- Check your state’s tax rules for companies—rules can change between cities and states.
In other words, do your homework on the basics of trucking companies, and research the necessary steps to register as a business in your industry.
- Procure the necessary equipment
The kind of equipment you’ll need will depend on your business goals and services. For example, if you wanta private fleet, you’ll need commercial trucks. If you intend on servicing clients in the food industry, you may need refrigerated trucks.
In any case, there are generally two options for procuring equipment:
- Buying –You pay the down payment and secure a loan to finance the remaining amount, paying off your purchase until the trucks are finally yours.
- Leasing –Leases work like paying the rent—you pay a fixed monthly amount to use the trucks. You can also opt for leasing agreements that let you own the trucks after the final payment.
Your startup capital and projections should tell be your guide on the number of vehicles to get. Just remember that you can always grow your fleet as you get more business.
- Buy an Insurance and Liability Policy
A CNBC report using data from the Federal Motor Carrier Safety Administration and the National Highway Traffic Safety Administration shows that in 2012, truck crashes were a factor behind more than 3900 deaths and more than 104,000 vehicular injuries.
These statistics highlight the importance of buying an insurance policy for your business to protect your property, as well as a liability insurance policy to cover any damages and claims for untoward incidents that happen on the road.
- Build your client base
Most new trucking companies depend on a load board to find clients. But competition on load boards is usually high, so you’ll need to bid at low prices to win contracts, which often results in razor thin profit margins. Use load boards only if you need to. The better option is securing trucking services contracts with local establishments such as grocery stores, department stores, and other business, which tend to be more profitable.
Of course, these 4 steps only scratch the surface of the entire process behind starting a trucking company. Just remember to take time to do your research and, if possible, network with industry insiders for valuable insights before you take the plunge.