How To Start Your Own Trucking Business – Are you thinking of starting your own trucking business? With the ever-increasing driver shortage, the demand for trucking services has never been higher. If done right, there is great opportunity for growth and prosperity as a business operator.
But where do you start? Whether you’re already operating as an owner operator and are looking to expand your fleet, or are ready to strike out on your own for the first time, starting your own business has never been easier. Think of yourself as an entrepreneur and follow the same process that all small business owners follow when starting their business. Create a business plan. Learning how to build a successful shipping company starts with the basics, so check out this step-by-step guide to help you navigate the requirements of starting a shipping company.
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How To Start Your Own Trucking Business
Starting a new business, in any industry, is difficult at first. Just remember that owner operators are usually paid more than company drivers, so a little effort now can pay off big later.
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We’re not sugarcoating it, there are many forms and licenses that new trucking companies must apply for – here’s a list of the most important ones:
As for insurance, policies vary depending on the company and your location. For details on the different policy plans and instructions on how to apply, see what the FMCSA has to say about it and decide which insurance plan is right for you.
Shipping makes up a significant percentage of a shipping company’s bill. As a future business owner, you have two options – you can lease your truck or you can buy it.
If you have the capital, buying a truck can be the smartest and most convenient option. Most owner operators choose to buy. Do you have money for a down payment? Going for a used semi may be a safer option at first. The price of a new car is from 110,000 to 125,000 dollars. Don’t forget you’ll also need a new trailer, which can run $30,000 or more. Keep in mind that your maintenance costs will be higher with a used truck, but if you’re tight on cash up front, it may be a better option. Used heavy duty trucks sell for $30,000 to $80,000. Don’t let the cost discourage you from buying a commercial truck, there are financing options available even if you don’t have perfect credit.
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Leasing is another option. It is more expensive than buying it, but it has some advantages. Low or no down payment and no long-term commitments are two of the attractive features of truck leasing. Truck leasing frees up some of your cash flow and gives you more financial support to get your company up and running. Some leasing agreements also impose a service charge on the lessor, taking another worry out of your listing.
It might not be a bad idea to consult with a financial advisor or CPA who works with startup companies before investing your money.
Once you have your license, insurance, and proper equipment, you’re ready to go—you can start hauling customers.
One of the first places to start looking for customers is to sign up for an online pickup service. Many of the available lift boards charge a monthly fee, but there are some sites that can get you business for free (check out our ultimate guide to lift boards for car builders to learn more about this). .
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Once online job boards have helped you get your foot in the door, it’s best to find solid clients to bring in yourself. Marketing is critical to a successful business, and the transportation industry is no different. Identify your target customers and meet them where they are, in person or online. This can be done by joining trade associations and attending industry events. Take advantage of social media groups and online forums to establish yourself. Create a small website for your business so that customers can easily reach you. We have more marketing ideas for shippers here.
Owning a trucking company is not cheap, as there are many start-up costs, including upfront payments on a trailer, insurance, license plates, and license and license fees. Apart from these start-up costs, transport companies spend a lot of money on fuel, technical upgrades, maintenance, parking, etc. Supplies, taxes, etc. These fees and costs can be very high. In addition to startup costs, expect average maintenance costs to exceed $10,000 per year.
We recommend checking out the OOIDA.com cost per mile chart to get a better idea of what you can expect from owner-operator startup costs.
The final step in starting a shipping company is just development. The most important decision you will have to make is whether to subcontract drivers or hire full-time drivers. Each option comes with its own ups and downs.
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Choosing to hire subcontract drivers is an attractive option for those who do not have enough capital to invest in their business. Contract drivers save a lot of money on insurance and equipment instead of hiring them full time.
However, this is the least profitable option – you get less than you earn. If your company owns a fleet and employs its own drivers, you will get more profit from your work. Once you’ve established a strong foothold in the industry, it’s time to hire new drivers and add trucks to your fleet.
But when is it time to expand, exactly? The answer to this question is different for every business. However, the simplest answer is “whenever your finances allow”.
When you start out in the industry, most of your income will go towards startup costs. But as your client list grows stronger and you’ve made a name for yourself, you’ll have some freedom with your money. When the time comes and your services are in high demand, get new clients, hire new drivers and expand your fleet. Just make sure you don’t jump in before you’re ready.
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Cost is a major challenge for start-up trucking companies. When you start a trucking company, your new business may not qualify for a bank loan, and you may be able to avoid taking out repayment terms such as unsecured loans or cash advances. In this case, many shippers turn to factoring. Freight factoring offers the cash flow cushion you need to avoid running out of funds when customers take a long time to pay.
Factor Finders matches owner operators with the right freight factoring program for you. Freight factoring can provide you with the quick cash flow you need to cover the costs of fuel, parking, and more.
Ready to start factoring and make sure you’re successful as you start your own shipping company? Talk to one of our freight factoring experts and get started today.
For more tips on getting new customers, download our free e-book: The Owner-Operator’s Guide to Getting More Loads
Freight Broker And Trucking Business Startup: How To Start, Grow And Run Your Own Freight Brokerage And Trucking Company In 30 Days By Clement Harrison
Phil is the owner of PRN Funding and sister company FactorFinders. He has been an authority in the factoring industry for over 20 years and has served on the board of directors of several factoring associations. Thinking of starting a shipping business? Now is a very good time as the demand for freight capacity across Europe is increasing. The trucking industry offers a relatively quick start, and strategic planning can help you secure your cargo.
In this comprehensive guide, we cover all aspects of starting a trucking business, including costs, profitability, and getting started with a truck. We offer an 8-step plan for building a successful business, truck variety, profitability and overcoming the driver shortage. We offer shipping boards, freight forwarders and more, a platform designed to start shipping.
Starting a shipping business in Europe depends on factors such as country, business model and types of cargo. Your plan should cover costs such as permits, insurance, storage, and equipment. Remember to include all expenses in your budget.
Make sure you have enough money for all expenses and have extra for unexpected expenses. It is important to manage your money well. Keep cash to cover expenses and pay employees. Look into loans and grants to help with startup costs. With good planning and budgeting, you can start your shipping business quickly.
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It is possible to start a trucking business without any initial cash flow. This can be done by exploring financing options such as commercial auto loans or other financing solutions. These financing solutions can help bridge the gap when you don’t have capital to invest in your business. However, it should be noted that setting up a shipping company requires significant upfront investment and operating costs.
More than half of Europe’s transport is carried out by trucks, and when it comes to inland transport, it accounts for about 75%. According to Statista,
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