How to Start a Trucking Business With One Truck
It is more than possible for the average aspiring entrepreneur to start a trucking company. While it may not be the easiest or simplest business to run, it is very rewarding if it’s done in the right way. The trucking industry has been expected to grow in freight revenue by almost 75 percent over the next decade. This industry already earned over 700 billion in revenue five years ago. In fact, according to the Thomas Index, trucking jobs are expected to grow over 6% by 2026
As long as people keep up the demand for products, the trucking business will always remain relevant and successful. This is what makes the trucking industry lucrative and worth investing in. Here is how to go about starting your own trucking business:
1. Ask the Right Questions
This step applies to any company in any industry. Before purchasing or signing anything, it is always best to address the most relevant questions that can help determine whether you are prepared and able to take on this type of business.
These questions should include the following:
What kind of freight are you going to haul in this business?
What equipment is needed, and do you have the budget for this equipment?
Do you have a plan for maintenance and repairs?
What kind of licenses and insurance is needed?
The answers to these questions can help you get an idea of what plan you need to create in order to be better prepared for the launch of your business.
2. Apply for Trucking Authority
Of course, paperwork and documentation are some of the most boring parts of any business. But they are incredibly essential and are a part of the very first things you should do to start a successful trucking company.
Start with your assigned US DOT number. If you don’t have one, you will have to register for one before applying for trucking authority. Make sure you get hold of the forms that are updated and use registration systems that are updated as well. If you already have a US DOT number, go ahead and apply for operating authority. The fee will be around $300.
3. Create a Business Plan
Like paperwork and asking the right questions, it is highly important that you create a detailed business plan for your trucking company. This business plan should go over what you expect your revenue to be and how your expenses are going to play out. Expenses should also include your own salary. If you find that creating a business plan is difficult, consult a business advisor for help.
4. Find and Choose a Process Agent
Trucking business owners need to have a process agent to represent them when it comes to court papers. If the trucking business expands later on and begins to operate in various states, you will need a process agent for each state the business operates in. You can find a process agent on the FMCSA website. Some process agents have more capabilities than others, though most should be able to assist you regardless of which state you reside in.
Aside from processing court papers, a process agent does much more than that. They help you to get your documentation aligned, they file registration documents and help with licensing, and they also help with processing and submitting quarterly IFTA (International Fuel Tax Agreement) taxes. They provide vital functions for a trucking company.
5. Purchase Truck Insurance
Liability insurance is a must-have for trucking companies, as damages and injuries can be inevitable in some cases. This ensures that everyone is protected and covered in case things get serious. Without active insurance in place, you cannot get your authority active and you will not be allowed to haul loads. Our agency can help you obtain insurance quotes from multiple insurance companies. Feel free to reach out to us via telephone or using our quick quote form to get the process started.
6. Purchase a Truck
Think about what your needs are in the business. This will help determine what type of truck is going to be best for your company. Will you be running hotshots or will you be doing long haul trucking with a tractor? Although many new ventures will decide to purchase a pick-up truck, keep in mind that the value can be very comparable to that of a semi.
Used vehicles can save a lot of money upfront, but you need to be cautious with the age and quality of the equipment as constant maintenance and repair can be twice as costly as a newer truck down the line. The deals on used trucks are often noteworthy, but it is wise to keep the cost of repairs in mind. The average cost of a repair for a new truck is $15,000, and repairs for an old one will most likely cost even more.
7. Pair the Truck With the Right Equipment
Remember, the kind of freight you’re looking to haul should be understood and kept in mind when looking for equipment. This is obvious, but some trucking business owners out there go too big or too small and end up wasting money in the end.
Freight rates fluctuate every week, but flatbed trucks usually pay the highest rate. Although that is true, reefer, step deck load, and van trucks have just as much potential as flatbeds. It is just wise to consider the overall average when shopping and planning. Location is also very important to keep in mind, as that can impact the freight rates.
8. Register Your Truck Through the International Registration Plan
Register your truck through the IRP in your state. With this, you will be allowed to haul loads through various states and even Canada without having to stress over multiple registrations. After you register, you will receive a special license plate. Keep in mind that the IRP requires a fee that varies depending on what state you register in. They typically cost around $2,000.
Is a CDL required to start a trucking business?
The short answer is NO, you do not need a Class A CDL to start your own trucking company. In fact, many hotshot owner operators do not have a CDL. Of course, there are pros and cons to going this route. By running a hotshot operation, you are closing yourself off to opportunities only available to those with a tractor. From an insurance standpoint, you are also limiting the number of insurance markets who can provide a competitive quote. Limiting markets is rarely a good thing for your company.
If you’re going to be pulling for one of the larger brokerage companies then you’ll be operating heavy trucks capable of towing over 45,000 lbs. Anyone operating a heavy truck is going to need a valid commercial driver’s license. To obtain one, you’ll have to go through a background check and CDL training. This includes a written permit exam as well as a driving test.
All drivers have to be 18 years of age and some states require drivers to be 21 to make interstate trips. While that is a general process for obtaining a CDL, the specific steps and requirements will vary from state to state. Go to your local DMV and get a CDL manual to figure out what you need.
How Much Does a Trucking Company Owner Make?
The salary of a trucking company owner really depends on expenses. Indeed reported that an independent truck driver earns an average of $183,000 every year. However, expenses can often go over 70 percent. That leaves a salary of around 50k to 60k.
A lot of independent truck drivers work with a carrier in order to keep work consistent. The two most popular owner-operator income programs are “percent of load” and mileage. There is a pretty even amount of how many independent truck drivers get paid by percentage or mile.
The expenses run for 70 percent, but there are ways to keep them down so they won’t eat up so much of your salary. This is the best way to increase earnings. Separate expenses into fixed and variable. The most common fixed expenses are things like truck payments, insurance, and permits. These are inescapable. Variable costs include things like fuel and food. There are many different ways to cut down costs on both of these expenses.
So, the amount of money a trucking company makes depends on you and your ways of handling expenses. Independent truck drivers have more control over their salary since they have the ability to shop for the best payment programs and manage their own finances and expenses so they can increase their income.
With this information, you’ll be well on your way to knowing how to start a trucking business with one truck. After all, one truck isn’t going to act as a limiting factor in the business if you follow these steps and remain optimistic about your operation.