The trucking industry can be very profitable, but it is also extremely competitive. Every year, many truckers attempt to enter the industry and fail.
Usually, this happens to people who are great drivers, but not effective business owners. It takes more than just knowing how to drive a truck or choose a route to run a successful trucking business. Check out the seven steps below to learn how to start a successful trucking business.
1. Create a Business Plan
Just as you would begin a new job with a fresh outlook and set of goals, you should start a new trucking business with an organized plan. A business plan serves as a roadmap to success and can be tweaked as your business grows. It assists you in getting organized, identifying goals, articulating your value proposition, and evaluating possible roadblocks.
2. Obtain Your Commercial Driver’s License
If you operate your own truck or hire drivers, they must have a valid commercial driver’s license (CDL), as required by the Federal Motor Carrier Safety Administration (FMCSA). Drivers aged 21 and over can apply, while those aged 18-20 can drive intrastate.
3. Get Your Trucking Authority
When you search for information on how to start a trucking business, you’ll realize one of the first steps to take is to get your trucking authority. Trucking businesses must have an operating authority when they work as a hired carrier over state lines for vehicles more than 10,000 gross vehicle weight (GVW).
4. Identify Your Business Type
You will need to file taxes with the IRS when you start a trucking business. You need to choose the type of trucking business structure you want to establish. For example, you may establish a sole proprietorship, partnership, limited liability company (LLC), or corporation. Consult a tax accountant if you have questions.
5. Set Up a Business Bank Account
Set up your small business bank account and business credit card. So you can separate your personal funds from business funds for tax planning and establish a good business credit score in case you need funding or a loan in the future. You can start building your business credit right away once you have your business account. It will also be possible to apply for a business license, permits, and insurance as soon as you start your trucking company.
6. Choosing the Right Insurance Coverage
When you become an owner-operator of your own trucking company, you will have to obtain business insurance. The most reliable thing to do to secure the best available premium is to contact several agents and consider the following options before selecting a policy.
- Cargo insurance
- Primary liability insurance
- Passenger accident insurance
- Physical damage insurance
7. Ensure Compliance
It is your responsibility as a business owner to ensure that you are in compliance with all applicable laws and regulations. This includes filing quarterly tax returns, renewing CDLs, and staying up to date on state and national trucking industry regulations.
Furthermore, brokers want to hire and work with carriers that have up-to-date regulations in order to reduce liability. Keeping up-to-date on regulations and monitoring compliance is critical to being successful as a truck business owner.