Trucks transport billions of dollars in shipped goods all across the country every year so a trucking business can be very profitable. If you have experience working in the trucking industry, becoming an owner-operator is an obvious choice. You gain more flexibility and can afford to make your own schedule. And the income potential is better. Even if you don’t have experience in the industry, you can still start a profitable trucking business as long as you get informed about the challenges ahead.
Here are the top things to know before starting a trucking business.
You Need the Best Trucks in Your Price Range
The success of your trucking business will depend on finding reliable trucks because they’re your main business assets. It’s crucial to look at your available funds realistically and decide how many trucks you want to start with and if you want to rent or buy. If you have enough funds to purchase your own assets, set a budget and explore the market.
What are the best trucks in your price range? Ideally, you should not pay more than you’re comfortable with because you will need to reserve funds for other business expenses. However, if you have to choose between price and quality, always prioritize quality. If you decide to buy a used truck, inspect it thoroughly. Ask about mileage and maintenance history. Check if there are any signs of body damage or rust. Choose well-maintained units to avoid possible costly repairs. For a good selection of reliable and affordable used vehicles from reputable manufacturers, check North East International Trucks.
The Upfront Costs Can Be High
Starting a trucking business can be a significant investment. Not only do you need your truck or fleet, but you have other important costs that must be covered before you start making money. You will have to pay for licenses, plats, permit fees, and insurance. You also need to secure funds for fuel and maintenance to cover the first months of activities.
It may take a while until your business starts making money. However, after the first six months, you can expect to earn back the initial investment. It can be very helpful to keep track of both your business expenses and personal expenses during this period of growth. Thus, you will be able to determine how much you need to work to break even and start making a profit. Importantly, it’s challenging to grow a trucking business without good cash flow.
A Trucking Business Isn’t for Everyone
Although the desire to start a business is admirable, always remain realistic, considering how costly it can be to get started. Before making the jump to the trucking industry as a business owner, you should know that owning a trucking company can be a lot of hard work. It is much more complex and exhausting than being a driver for a trucking company. As a driver, you spend your time behind the wheel, and you can leave your work behind you and relax at the end of the day. However, as a business owner, there’s always something more to do.
When you run a business, you have many different things to worry about, from dealing with customers to preparing paperwork. Be ready to put in the necessary effort, but know that you don’t have to do everything by yourself. You can outsource various tasks to reduce your daily workload. For example, if you love driving your truck but don’t enjoy handling paperwork, hire a good accountant. Finding reliable help is crucial for avoiding excessive stress and burnout. Plus, it gives you the time to focus on things that matter to you the most.
There are Many Legal and Bureaucratic Implications
From the moment you decide to start a trucking business, you have to prepare to deal with a lot of paperwork. Without paperwork giving you the legal right to operate, you cannot drive your trucks for a commercial purpose. It’s crucial to set up your business correctly to avoid potential legal issues in the long run. The legal requirements can be extensive, but you can hire specialists to help you navigate the legal and bureaucratic maze.
When you run a business, no matter the industry or niche, the legal and bureaucratic aspects are always a hassle. If you’re someone who loves driving but doesn’t like being in the office dealing with accounts or insurance papers, you will have to learn to embrace this side of the business world. Even if you hire specialists, you still need to understand the legal and bureaucratic implications of running a business. For example, you will probably hire an accountant, but you need to learn to analyze the records to measure your profit and, therefore, your success.
Besides an accountant, you may also need an attorney to advise you about safety and compliance rules and regulations. The legislation is merciless towards trucking companies and the transportation industry as a whole, so you need to comply with the rules strictly to avoid hefty fees and penalties. The purpose of safety and compliance rules is to ensure safe operations in a field where the risks are high, so following the rules accordingly will help you protect your fleet and drivers. It can be helpful to collaborate with an attorney in the beginning to understand your rights and duties. Besides an accountant and an attorney, you will also need to find a knowledgeable and reliable insurance agent with experience dealing with trucking businesses.
Starting a trucking business can be a rewarding path, but it’s not an easy one. Having experience as a truck driver or business owner can help you overcome some of the associated challenges more easily. However, even if this is your first foray into the business world, you can still be highly successful. Be ready to learn new skills and adapt to a fast-paced work structure.
Use the information above to start on the right track and grow a profitable business that creates value in your community.