How to Start A Trucking Company Business In The US
The trucking industry offers a very viable business opportunity that guarantees a quick return on investment. Once your company has been established, you will wait patiently to join the millionaires club.
However, starting a trucking business in the states can be costly and time-consuming. The following are some of the critical requirements that you need to meet if you are considering starting a trucking business in the United States:
Federal employer identification number (EIN)
EIN is a unique nine-digit number that is key to any legal entity operating in the United States. The IRS assigns the number for purposes of registration. The number is also critical when opening a bank account, filing of taxes, and when recruiting staff.
Obtaining a USDOT number
The process of obtaining a USDOT number can be complicated. If you are in doubt, you can use the services of an expert. The USDOT number is one of the requirements needed for your business to operate in the US.
Get a Motor Carrier Operating Authority
You need an MC number if your company is involved in any of the following:
- Transporting passengers through interstate
- Transporting federally regulated commodities
- Operating for-hire carriers
You also need to obtain insurance for you to operate legally within the states. Ensure you get premium truck insurance from reputable insurance agents.
How to Start a Company Business with One Truck
Although the trucking business is profitable, it is also highly competitive. You need a sound strategy to ensure your business doesn’t fail. It would help if you were a good business manager to be a successful trucker. The following are some of the tips to employ and establish a thriving business:
Choose the right niche
Choosing the right niche is critical to your business success. The market you choose will significantly determine the equipment you will buy, your budget, charges, and the freight lane to service. As a rule of thumb, it is wise to focus on markets that large truckers are avoiding. Specialized load niches are one of the viable niches for small trucking businesses.
You also need to charge the right rate when starting. The prices should be fair enough to bring profit and cover all the operations costs.
Find out operating costs
It is also essential to determine your operating costs. Find out the fixed charges, such as the costs of truck payments, permits, and insurance. It would help if you also determined your variable expenses like cost of fuel. Once you know your total expenses, it will be easy to figure out the all-in costs per mile that will inform the pricing model to use
Adopt a good fuel buying strategy
Fuel forms the biggest part of your operating expenses. You need to come up with a good fuel buying strategy that will bring down your costs of operations. Ensure you buy fuel at the lowest base price. Doesn’t just focus on purchasing fuel form the cheapest pump on your route. You could still lose a large amount in taxes.
It would help if you also focused on working directly with shippers. Typically, brokers take between 10 to 20 percent of the load price. You should minimize the use of brokers if you want to earn a significant profit. Charge the shippers the usual price that brokers charge and keep all the revenue to yourself
Use a back-office
It would be best if you also run an efficient back office for your business to grow and break even. A back-office will play a significant role once you incorporate the use of leased drivers in your operation. You can run the office operations yourself when starting. However, you can outsource the back office to a suitable dispatcher that is ideal for business growth.
How to Start A Trucking Company Business Owner Operator
The following are key tips you can use to start trucking business owners operate.
It is essential to carry out honest self-assessments before you start your business. Running an owner-operator trucking business is demanding mentally and physically. You may spend countless hours on the road. You, therefore, need a lot of discipline and experience to deliver excellent results.
Write a business plan
The next step should be to come up with a sound business plan that will help in the running of your business. A suitable business plan must include the company name, goals, operational strategy, finances description, costs, marketing strategy, and any other relevant information
Get permits and licenses
You also need to check with your municipal office to establish the type of permits you need to run your trucking business legally in the US. Register your business with the secretary of state to avoid getting into trouble with the law.
File your taxes
You also need to get a federal tax ID/ EIN or social security number to register your business and set up your tax status as required by the law. The EIN will also come in handy when you are opening a business bank account and in hiring of essential staff.
Starting a Trucking Company Business Checklist
The flowing is a checklist you can use to ensure your trucking business is fully compliant:
- A commercial driver’s license
- Federal DOT and motor carrier authority numbers
- Unified carrier registration
- International registration plan Tag
- Complying With Heavy Use Tax Regulations
- International Tax Agreement Decal
- File a BOC-3 form
- Get a standard carrier alpha code
How much will it cost to start a trucking company business?
The initial cost of starting a trucking business in the United States of America is anything between $6,000 to $15,000. This cost doesn’t include the cost of your equipment.
If you are currently in the US, you can take advantage of the current driver shortage to launch a thriving trucking business. There is an increase in freight demand, which has informed a rise in rates. However, before you start your business, carry out ensure you have met all the requirements for your business to be fully compliant. Make use of the tips we have provided to establish a trucking business today.