It is quite common for those in the long distance trucking industry to consider starting their own trucking business. After all, it might be frustrating week after week to only receive a portion of payment because the company takes their cut. What you might not realize is that the trucking companies pay significant overhead costs and risk their own capital in the process. Although starting a small trucking business can be a successful venture, it requires lots of time, effort, patience and money. Here are some things you will need when starting your own company.
1. A Sound Business Plan
The first and arguably most important thing to have in order to start a small trucking business is a plan. Come up with a written business plan that shows how much you expect to earn, where you plan to get your financing, how many staff you plan to hire and when you expect to break even after starting the company. It will be impossible to get financing or clientele unless you have a clear and realistic plan for your endeavor.
2. Financial Backing
In order to start a business you will need the capital to purchase trucks, finance fuel and wages before the first payments come in and start marketing your company to potential clients. If you plan to have a permanent office, that will also involve some expenses that can add up quickly. Few entrepreneurs have the capital initially, which is why you will probably need to borrow money from investors or a financial institution. Meet with your local banks for information or suggestions first. Additionally, there are institutions that provide factoring for the transport industry as a source of immediate cash flow.
3. Insurance, Permits and Licenses
It is illegal to simply declare yourself a trucking company, as there are many legal and business matters that need to be addressed. You will need to visit your local state offices to create an official business as well as inquire about what paperwork is necessary to legalize freight carrying vehicles across state borders.
4. A Client Base
You simply won’t have a successful business until you have attracted a significant amount of clients to use your trucking services. If you know some clients be sure to spread the word of your business in any way you can. Make business cards to hand out and leave in truck stops as well as creating a simple website and email address so that you can be reached at any time. You might also consider advertising in newspapers or even magazines that reach the right demographic you are looking for.
5. Reliable Staff
The first staff requirement will obviously be fellow truck drivers to haul freight across the country, but there are other staff members that will be truly vital to the trucking business. You will need administrative staff to take calls, book schedules and keep drivers up to date on their loads and the log book. In addition, someone will need to take control of the finances and begin the accounting and payroll. In a small company you might take on these roles yourself initially in order to save money.
Starting your own trucking business can be financially rewarding as long as you address these five issues!
About the Author: Patrick Johnson is a contributor offering advice on obtaining commercial truck insurance for those looking for freelance truck driving jobs.
Image: ACE Solid Waste / Flickr