6 Steps to Building Your Own Trucking Business
Whether you’re a seasoned driver or relatively new to the trucking industry, the thought of launching your own trucking business is bound to have crossed your mind. Owning a trucking company requires substantial preparation, a full understanding of start-up costs and annual expenses, and a whole lot of compliance paperwork to ensure you have the proper legal authority to move freight — but the reward of being your own boss is well worth the effort. Here are six steps to getting your own business off the ground:
1. Experience Goes a Long Way
Like any industry, a healthy dose of on-the-job experience is one of the best indicators of future success. True, for drivers looking to strike out on their own there are many freely available online resources designed to prepare potential owner-operators for a dive into the business ownership deep end, but there’s simply no substitute for working through the challenges of the industry firsthand. It’s worth spending some time working for an established company with a measure of job protection, steady pay, and benefits as you develop the skills and know-how needed to progress further. Though there is technically no years-of-experience requirement for starting your trucking business, direct experience with the complexities of the shipping industry serves as the best possible preparation for the steps that follow.
2. Give Your Business Its Own Identity
Get ready, because this isn’t the first time proper documentation will come up as you ready your business for operation. Once you’ve familiarized yourself with the industry enough to begin operating on your own, you’ll want to establish a business entity — probably an LLC — which serves to separate your business assets and expenses from your personal finances in the eyes of the law (and the IRS). As you build out your business entity, complete with an employer ID and a separate business bank account, you’ll need to settle on a name. Put some thought into this, as your name will likely serve as your first impression when establishing new partnerships with brokers later and marketing your business as a legitimate enterprise.
3. Complete the Necessary Paperwork
Thanks to your previously obtained industry experience, you’ll already be aware of the extensive federal compliance rules and regulations governing the shipping industry. Keeping everything that says you’re allowed to ship freight on file and up-to-date is a non-negotiable fact of life for everyone in the business of trucking. That means completing a DOT physical and obtaining a commercial driver’s license. It also means acquiring the necessary operating authorities for the type of cargo you’re carrying, completing a series of very specific tax and insurance forms, and securing various vehicular and personal registrations.
4. Know What You’ll Need for Startup Expenses
This step is the main barrier to entry for many would-be owner-operators. Owning or leasing a truck is far from cheap, and that’s without factoring in registration fees and insurance down payments, upfront subscription payments for tools like Electronic Logging Devices (ELD), and basic business necessities like phone and internet costs. List all of your expected monthly and annual expenses in one place, or plug them into a detailed startup cost calculator to track exactly how much capital you’ll need to launch your new business. Don’t forget, you’re now responsible for expenses like regular truck maintenance and your own health benefits — you’re operating a small business, even if you’re the company’s lone employee for the time being and spend much of your time behind the wheel.
5. Have a Routine to Keep Documents Fresh
No, you aren’t mistaken, we did just barely cover paperwork two steps ago. Here’s the thing — it’s never exactly “done,” since many of the registrations, tax returns, and other compliance forms you have on file need regular attention. This industry is one of intense regulation, which means without an organized filing system and extremely disciplined processes for keeping your ducks in a row, you risk losing your good standing with the FMCSA and damaging your reputation with potential business partners.
6. Manage the Growth of Your Fleet Carefully
Fleet management is the backbone of any shipping company. It’s what keeps vehicles fueled up and ready for the next job, ensures driver safety, and evaluates the viability of adding new trucks and drivers to the fleet as the business grows. When that time comes, your company needs a method of either hiring in-house truck drivers and acquiring fleet vehicles or vetting and subcontracting independent drivers who operate their own vehicles. As business expands, tasks like dispatching, invoicing, maintenance scheduling, and payroll may also require hiring an administrative assistant or additional helping hands to bring in more clientele. Building your reputation and strengthening connections with freight brokers and carriers will help direct a steady stream of clients in your direction. Starting a trucking business from scratch is no easy feat. It takes discipline, experience, and highly organized processes to maintain steady growth and mitigate potential setbacks. But with patience, preparation, and the work ethic to see it through, the dream of business ownership can become a reality.
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