Trucking is a hundred-billion-dollar industry in the United States because most companies prefer to transport freight by trucks rather than by trains, planes, or ships. Since there is a high demand for freight and a low supply of drivers, this presents a huge business opportunity for entrepreneurs who want a six- or seven-figure business income.
Here are a few essential guidelines on how to start and run a successful trucking company:
Plan Your Business
You will need a comprehensive business plan whether you are self-funding the business or applying for a business loan.
A comprehensive business plan will describe your company; and it will include a market analysis, a marketing and sales strategy, a service business analysis, a financial projection, and a personnel organizational chart. Your plan should detail your primary activities, partnerships, resources, cost structures, customer segments, and value propositions.
You could choose from three types of business plans: a lean business plan, a partnership plan, or an acquisition plan.
A Lean Business Plan
You need plenty of experience to start a business as a small carrier. If you have no industry experience and no money, first become a truck driver and then get a business loan to buy your own truck. All you need is one truck to start your business.
After you have run your business profitably, transition from an owner-operator to a business owner. You can finance your business in several ways. You can self-fund it based on savings or other income sources. You can sell a property. You can apply for a bank loan, a loan from a private lender, or a home equity credit line.
A Partnership Plan
If you can raise money quickly, a faster route is to find an owner-operator and partner with them to build a fleet. While you ‘ll provide the funding, they’ll provide industry knowledge and business experience.
Startup costs will range from $10,000 to $30,000 depending on the size of the business for state-specific licenses and fees, permits, vehicle down payments, and truck insurance. Then earned income will pay for overheads, such as hiring drivers, staffing, office rent, and marketing expenses.
A Business Acquisition Plan
If you have enough funding, another option is to buy a small trucking business, enhance its operations, improve its profitability, and expand the business by buying more trucks and hiring more drivers.
Adopt Best Business Practices
Regardless of your business plan, you must do two things extremely well to have a successful business:
Only Use Good Equipment
It is far better to buy new trucks rather than used ones. You will have a warranty and your trucks will be safer on the road. You will also reduce the cost of repairs and maintenance and experience fewer downtimes that cut profits.
Treat Your Driver’s Well
Most road accidents are avoidable. Some common reasons for trucking accidents are tight schedules, bad weather, and driver fatigue. Putting unfair work pressure on your drivers could ruin your business if they start having accidents.
Follow the Law
If you are an owner-operator, the FMCSA requires you to fulfill the following legal requirements:
A valid CDL
Onetime United States Department of Transportation Number
A Motor Carrier Number
An International Fuel Tax Agreement sticker
An International Registration Plan.
Market Your Business Well
Every business is a marketing business because, without good marketing, it won’t have enough customers. Eventually, the business will have a cash flow crisis and collapse. One resource for marketing your trucking business is Uber Freight service. This free carrier application creates a logistics network to unite shippers and carriers.
Starting your own trucking business can be highly rewarding if you plan out your business in detail, choose the best business plan, adopt best business practices, abide by the law, and market well.