There's so much to love about the trucking industry - fulfilling work, flexibility, and the freedom to roam the open road - here's how to take full advantage and start your own trucking company.
There's so much to love about the trucking industry - fulfilling work, flexibility, and the freedom to roam the open road - not to mention the high salary. I'm sure you know all of that already, and I'm sure you've imagined yourself as the leader of your very own trucking company.
The problem isn't the why its the how.
Starting a your own business of any kind is tough - not just in terms of blood, sweat, and tears, but also in the paperwork, finances, strategy, and operations. This is especially true for trucking companies, which have to deal with complex carrier compliance documentation, tax documents, and waybills on top of the typical incorporation or LLC fillings. The thing is, it's not impossible. There are hundreds of thousands of people just like you who have made the leap to start their very own trucking companies, and I'mg going to show you how you can join them.
Before you can do much else, you're going to have to get your commercial drivers license (CDL) and some driving experience. I'm assuming that you're already in the industry and have experience as a driver for another company, but if you're looking to get started from scratch, becoming a company driver is a great start. Many trucking companies have their own training programs, and some will even help you pay for the process of getting your license. This is especially good idea right now, as we're facing a major trucker shortage in North America.
This is where it can get tricky - you need to figure out how your business is going to run, where the revenues and expenses will come from, and what type of company you need to file. You should always consult a professional business advisor or accountant if you have further questions, but here's some starters.
The first thing to think about when you're developing your business plan is to determine what size of company you're expecting to start. Do you own your own truck and want to start an owner-operator business? Are you looking to lease a few trucks and start a small carrier business? What about contracting other owner-operators and running a hybrid carrier-brokerage? There's a ton of options that you can choose between, based on things like your financial situation, risk aversion, and the amount and type of work you want to do.
Once you've figured this out - the type of company - it's time to start considering some of the normal operating expenses and revenues you'll incur and collect. Remember to include all the factors involved with running a company, like your own salary (and any others), the lease (if you have one) for your vehicle, fuel expenses, taxes, and expenses from services like load boards, professional email, a website, and accounting. With this information, you'll be ready to figure out the legal framework for your company.
This is where a lot of people give up - the boring, confusing, and frustrating part filing the legal documents and sorting out the startup expenses for your company. Let's start with the legal aspect.
There's a few ways that you can structure your trucking company, each with their own pros and cons. Here's a quick overview of the general pros and cons, although it's important to keep in mind that regulations and the pros and cons associated differ by state and country, and that you should always consult a professional accountant if your confused or you need extra help making these decisions (it's worth it in the long run trust me).
Next up is the startup expenses - the initial costs to get the company off the ground. Here it's important to consider the first six months of expenses for your company - your tracker or trailer, licensing and registration, fuel, and accessory costs from necessary business components like accounting. Besides the classic advice of saving money before you start your business, it's an excellent idea to talk to your bank or financial institution about financing options like a commercial line of credit to help fund your business. In any case, make sure you're not putting yourself in financial jeopardy, and that you keep careful track of the terms of any credit cards, loans, or lines of credit you do use or pursue. If you need more help with finance, there's a ton of great resources on the web, like here.
Once you've completed the difficult tasks of legal structuring and financing, compliance and insurance for a breeze. Although it's boring and time consuming, you need to make sure you have all of these documents (if they apply to your business specifically) in place and correct. Here's a quick overview if you're in the US:
There's a list of links from the U.S. Small Business Administration to help you sort through everything. Others offer services that deal with the regulatory maze for you so you can get your authority. The documentation for Canadian companies are obviously different, but the Government of Canada has an excellent webpage that goes over all the requirements in detail.
Once you've gotten your compliance documents in order and filed, you're ready for insurance. There's a few key types of insurance documents that you'll need to manage as a new trucking company.
The Owner-Operator Independent Drivers Association (OOIDA) has more info on trucking insurance at www.ooidatruckinsurance.com.
Now it's time for the exciting part - buying or leasing your first truck and/or trailer for your business. There's a few ways to go about this:
With any of these options, make sure you read the fine print, consider the impact of financing and whether of not you can financially handle lease payments based on your projected revenues and expenses. At this point - you have everything you need for a trucking business - but you're not quite done yet.
You didn't start a trucking just to say you did it - you started a trucking company to do something you love while making great money. And this can't happen until you've developed strategies to grow and scale your business. This is a little out of the scope of this article, but there's plenty of resources out there - including here at FreightPath! Whether you're looking to scale your business - or you're looking to add your first truck - we've got resources for you on the FreightPath Blog.