What You Need to Know Before Starting a Trucking Company

What You Need to Know Before Starting a Trucking Company
What You Need to Know Before Starting a Trucking Company. Image source: Pixabay

Are you a company driver who’s planning to make the transition to owner-operator? It’s a big understatement to say that it’s a big step to become your own boss. You’ll have to consider many things before you start your own trucking company – from writing up business plans to obtaining trucking business loans. Have a look at this list of what you need to know before you start a trucking company:

1. Create a business plan.

One of the biggest mistakes that overzealous people do is to start a trucking business with nothing but a truck and a dream. You can’t set up a business without writing up a business plan. Over time, changes in how you operate your business may certainly take place. However, your business plan will serve as your roadmap that will help keep you right on track.

It’s important to identify the type of trucking business that you want to run. For example, try to decide if you want to focus on specialized loads or a dry van operation. Your business plan must clearly state how you plan to set your trucking business apart from others and how you can develop a budget.

You’ll also need to determine your vision for growth and cite this on your business plan. Growth could mean eventually adding more trucks or bringing on a team driver. When you document these items on your business plan, you’ll have something you can follow in the future – even if these items are changed over time.

2. Determine your company’s business structure.

What kind of entity would you like your business to be? Now that you’ve decided to become an owner-operator, you’ll need to determine your company’s business structure. Decide whether you want a sole proprietorship, a limited liability company (LLC) or a small business corporation. Most of these business structures are very similar, but the most popular ones are LLC or S-Corp, so it would be great to check their differences before you make your final choice.

However, you won’t be able to do this without considering income taxation and owner liability. Each of the mentioned entities has different tax consequences. For this reason, your decision should be based on your business needs.

3. Identify what carrier you’ll drive for.

Rather than getting their own authority, a driver-operator usually decides to start by leasing with a carrier. You’ll enjoy the freedom of being your own boss while being protected by somebody who pays a portion of the upfront costs and finds loads for you. Before you can choose a carrier, you’ll have to decide on the kind of operation you’re planning to run, how the fleet treats the owner-operators, and where you want to drive. Your chosen carrier will determine the types of freight you’ll be hauling and which parts of the country you’ll be driving in. You’ll need to do a little research on the reputation of your prospective fleets. While you’re at it, try to find out how much they pay for miles, if they have loads available on a regular basis, if they pay drivers on time, etc.

4. Get your own truck.

You can’t start a trucking business without getting your own truck first. However, you need to be aware that it can be challenging to purchase a truck upfront. This means that you can look for carriers that offer lease-purchase programs to owner-operators. Although you won’t own the truck, you’ll be required to make monthly payments on it until the contract expires. When the contract is up, you can choose to start a new contract or purchase the truck. You can find carriers out there that offer maintenance benefits and discounted fuel.

you should consider applying for trucking business loans that would best suit your needs. Purchasing a truck through a financing company won’t require you to lease it through the carrier you drive for. You’ll also have more freedom choosing the carrier you want.

5. Hire people to handle other tasks for you.

You can focus more on driving if you have reliable professional business services providers to help you with the bookkeeping and accounting tasks, safety and compliance issues on your behalf, and assist you with all of your legal and tax needs, you’ll also need to choose an insurance provider.

The key for us to start your trucking business with the end in mind. After all, it’s impossible to come up with a roadmap towards your destination when you haven’t even figured out what the destination is.

Learn More About Trucking Business Loans!

Are you interested in applying for trucking business loans? If so, get in touch with the lending experts at SMB Compass now. We’re here to help you make wise financial decisions. Call us at (888) 853-8922 or email us at [email protected].