How to Start a Trucking Service Business Successfully: 15 Easy Steps

 

You want to successfully start a trucking service business as an entrepreneur to make money, right? Whether you have some experience or not this guide is meant to show you a clear path to use to make the dream come true.

E-commerce and online orders are really pushing the trucking business to greater heights compared to decades way back in the day.

This is not only happening in first-world countries like the United States, Canada, Japan, China, and the United Kingdom but also in developing countries.

However, to grow the delivery and shipping industry the country needs to acquire appropriate internet and transport infrastructure. The availability of truckers ensures effectiveness and efficiency in service delivery.

The trucking industry transacts billions of dollars in revenue in the United States, Europe, and Asia. There also are lots of employment opportunities available in the industry.

Planning to quit your day job? A trucking business is an option too when you want to get started on your own to earn an income.

Pros and Cons of Starting a Trucking Service Business

Before starting a trucking company you need to know about its pros and cons to clearly decide whether it’s worth the investment hence get a picture of the business you want to get into earlier.

Pros

• It’s a profitable business idea
• Sustainable since there are lots of opportunities
• Offering service at your own schedule
• You’re at an advantage of having fun for adventure.

Cons

• Takes some time to make some good money
• As the business grows, you may get less time for family fun
• Trucks are quite expensive to purchase
• High Fuel prices fluctuate transportation costs.

How to Start a Trucking Service Business

You don’t have to raise millions of dollars to start up a profitable trucking company, but as long as you use the right knowledge you can succeed.

In a few simple steps, we have clearly detailed how best you can build a trucking business empire from scratch for about a quarter of a million dollars.

1. Carry Out Market Research

First things first, carry out market research about the trucking business industry to identify whether it’s worth investing your money. And it’s part of the process when you want to succeed in this business.

When you study the industry through market research you’ll start up with a competitive edge in business to exploit any available opportunities.  Sure, you’ll take advantage of any loopholes identified.

You need to know about your competitors, the target market, rewarding trucking service types, and strategic places to locate office space to ease accessibility for effective service delivery.

Market research will guide you in identifying strengths, weaknesses, opportunities, and threats in the industry but you must be ready to walk the journey to get results.

2. Pick a Niche

Though the trucking business can do a lot in delivery and shipping, you have to niche down for effectiveness and efficiency in service delivery.

There are different niches to pick out from for example furniture and timber, electronics, construction material, garments, and more. Niching down is the way the business can easily get identified to acquire market share.

When you decide to pick a niche it means you must specialize within an area of expertise without deviation to offer service to the target market.

Understanding the industry through carrying out market research is what will determine the right type of niche for a trucking business startup. You need to select a niche that is right for you in relation to your interests and the industry as a whole.

Planning to start up a trucking business now? Niching down is all about being service-specific to offer service with proficiency.

3. Select a Suitable Business Model

After picking an appropriate niche for the target market, it’s time to select a sustainable business model that suits that target market. Let’s look at the main business models to consider when starting up a trucking company.

• Consumer to consumer – This is where trucking business is done between individuals.
• Business to consumer – Here trucking is done from businesses to individual consumers.
• Business to business – This is where trucking business is done from one business to the other in a similar sector.
• Hybrid model – This consists of both business-to-business and business-to-consumer business models combined.

Pick a business model that suits your niche and business structure for better service delivery in the industry with a competitive edge. Where model selection is a hard cut you can talk to a business professional for advice before taking any action.

4. Create a Business Plan

If you don’t plan, you’re planning to fail. Any business should have a plan in place to act as a guiding tool in the execution process.

A business plan has a list of components to consider for business success and sustainability.

• An executive summary – This is a detailed overview of the business plan reflecting the business’s future plans.
• Strategic market analysis – This involves identifying the target market for trucking services and its location for targeted service delivery.
• Company Description – It’s an entire description of the business goals, missions, visions, and products or services offered.
• Competitive analysis – This is meant to give a clear picture of the business and its competitors. Analyzing your competition is what enables you to plan ahead of your competition.
• Financial plan – This contains planned capital expenditure and projected income for the business. It also helps to predict the financial future of the trucking company.
• Organizational structure – It gives details about the trucking business’s legal structure and its team.

5. Chose a Business Location

Business offices are supposed to be strategically located for effective service delivery to target clients. Stakes holders need to find your business in an accessible location for example a business center.

When the business is just starting it should be situated in a state that won’t cost you much in taxes, rent, and other legal requirements. If where you’re living the cost of business startup is high, shifting to a cheaper location can be an option.

Sure, there are states where starting up a business to offer employment comes with benefits, and this is where the startup should be situated provided there’s a ready market.

6. Register the Business

Register the trucking company with the appropriate authorities to officially start business operations. At business registration, for effective service delivery, the business structure should suit the business model selected.

There are different types of business structures to choose from during the registration process as below

• Sole Proprietorship – This is operated by a single person with absolute control and is liable to business proceedings during the calendar year.
• Partnership – Here a team of members known as partners register a business and are equally liable to any proceeding in a calendar year.
• Limited Liability Company – Under this type of business structure members are subject to liability and tax protection benefits in a calendar year.
• Corporation – It’s a separate legal entity from its owners hence any legal actions and business transactions are done in its name. Business profits are shared in the form of dividends quarterly, half-yearly, or annually.

Reserve a company name after choosing an appropriate business structure that suits the business.

7. Tax Registration

Apply for an Employer Identification Number (EIN) for tax purposes, and for a sole proprietorship, a social security number is used as the EIN for tax clearance. And after registering for taxes you need to select a tax year starting in a given month of the calendar year when returns for the business will always be filed.

8. Get a Business Bank Account

Open up a company account to separate company income from personal income. Talk to your service provider about creating an account for the business and the requirements for opening up one.

With a company account, you can’t easily mess up business transactions, and it eases accountability for business incomes and expenditures.

Organize the required documents as requested by the service provider to open a company account for example the EIN or SSN, articles of incorporation, directors, business address, and other legal documents.

9. Secure Funds

A trucking company needs funds to use in setting up the business for effective service delivery in the long run. Despite startup capital, the business can further get facilitation for thorough service delivery from different sources.

There are different ways in which you can get funds for the trucking business to support daily operations.

• Personal Savings – Money in the savings account can be used as startup capital to support the business in its early stages hence saving you from using borrowed money that comes with abnormal interest rates
• Crowdfunding – Check out online platforms like Wefunder and Fundable through which new startups get access to potential investors for funding. Properly document the business so that investors can rate it worth an investment when an opportunity comes up.
• Government Grants – Grants.gov is a government platform that offers grants to businesses that need funding. You need to be updated about any government support available through the platform.
• Friends and Family Members – Some family members are willing to offer financial support when you talk to them about the business idea with its long-term goals. However, here most people want to invest in a business where they can also be business partners to share profits.

10. Process Licenses and Permits

To start successfully without government intervention, the business must acquire appropriate licenses and permits. Depending on the type of business, there are authorities in charge of licensing trucking businesses to start operations.

Acquiring a business license or permit in several states is quite different according to the rules and regulations governing the business environment. One of the most critical authorities is the Federal Motor Carrier Safety Administration (FMCSA) in charge of transportation and motor carrier licensing numbers.

Since the trucking business is most likely to carry out transportation to different locations, an international registration plan and fuel tax agreement tag are ideal.

Talk to a business expert about any extra licensing requirements to keep up with state laws to work safely in possession of patents, trademarks, health and safety licenses, and more. An online resource to use to learn more about business licensing and documentation is the Small Business Administration (SBA) guide.

11. Staffing

The need for people to work with depends on the demand and size of the business in the startup stage. If right now employing people isn’t so demanding you can skip this step.

Staffing is something that should be put in plan, when the business grows you will need support staff and other professional employees to offer service to the business.

Hiring people to work with in business for effectiveness and efficiency should be done with competence to outsource the right people for the available positions. You can use free platforms like Fiverr, Upwork, Jobs.com, and more to list available opportunities at no cost.

You don’t need to use paid platforms to make job adverts since the trucking business is just starting. It’s very possible to receive thousands of quality applicants through unpaid platforms.

Filling demanding positions should be prioritized when the need for professional assistance arises during implementation.

12. Get Business Insurance

Some new startups dodge spending on insurance and don’t take it seriously. But insurance protects the business when an unpredictable event with costs to the business occurs.

Every business at any stage should have an appropriate insurance cover despite the high premium charges with some service providers. You can shop around for the best offers personally or using an insurance brokerage firm.

If you don’t have a priority list of insurance covers for the business, here is a list of some to choose from at the time of taking a cover.

• Commercial Auto Insurance – The insurance plan is designed to cover business vehicles.
• Liability Insurance – This insurance policy covers injuries and property damage. Businesses need liability insurance since it’s more like an all-in-one policy.
• Workman’s compensation – The policy covers workers when they get into accidents while performing company work.
• Business Property Insurance – The insurance policy covers equipment and supplies for the trucking business.

The trucking business needs insurance protection against any future unpredictable events that may happen. And there are lots of other types of business insurance protection to save the trucking company.

13. Establish an Online Presence

Today a business with no online presence is like a business without a location or physical address. Involving digital marketing in business it’s the easiest way you can get closer to clients who are in need of your service.

Most clients don’t have time to come to your offices as long as you can deliver to their expectations hence online platforms make communication easier.

Online platforms like social media and a business website are good to start with despite some setup costs that might come with them. However, if you’re tech-savvy you can work out the platforms yourself.

Through social media and a business website, you can easily start spreading awareness to people interested in the services that the trucking business offers. Nowadays people to know about your business don’t need to move to your offices when you have online platforms.

In relation to the type of audience for a trucking business, you need social media platforms like a Facebook page, Instagram page, and some others you find relevant to the business.

Create online platforms that match your type of business and target audience for success. Not all social media platforms are fit for the trucking business.

14. Transport and Route Planning

Since the trucking business is all about transporting cargo you need to know which types of trucks are fit for business, the leasing options available and the shortest routes to use to minimize transport costs.

In the future, you will need to invest some money into route optimization software despite some costs but worth it. Sure, you need to save money on the transportation of cargo with on-time delivery and route planning for the business to make profits and grow.

Route planning helps in identifying busy routes, time management, road restrictions, and other factors that may hinder trucking business operations upon delivery.

You must plan transport and routes for the trucking business for effectiveness and efficiency in service delivery, this is one of the most critical steps in the transportation business.

15. Market the Trucking Company

In the business of trucking, marketing is a very important aspect if you want to reach out to target clients for recognition to grow business sales.

Choose proper marketing channels like a business website, social media, and paid ads for the business to get traction in the industry.

However, when you’re just starting you mayn’t need to spend money using paid marketing channels to spread awareness. Organic traffic for business awareness will work best since the trucking company has not yet started making money.

Some traditional marketing channels that won’t cost you much in advertising include fliers, newspaper banners, car adverts, and posters.

You don’t have to do all the marketing alone, hire a marketing expert even when you’re just starting for assistance.

Here you’ll have to spend some money on a marketing expert to offer service professionally but worth it, and you can use platforms like Fiverr and Upwork to get cheap quality marketing professionals.

FAQs

How Much Money Do I Need To Start A Trucking Company?

When you’re just starting with a single truck, at a small scale you may need up to $200,000 as startup capital. And here the biggest cost is that of a truck or trailer which may go for about $180,000 on average.

What Are The Main Requirements For Starting Up A Trucking Service Business?

In setting up a trucking business, there’s a list of items that must be acquired before starting operations which include a truck, business website, physical location, US Dot number, permits and licenses, international registration plan (IRP), and more.

How Long Does It Take To Start Making Profits In A Trucking Business?

You can’t start enjoying the profits made right away, it will take at least five years to see pure profits when the business is fully grounded. However, you may take less than five years or more depending on your level of commitment to business goals.

Conclusion

The steps followed in starting up a trucking company are not much different from those of other businesses in transportation despite the differing startup costs. For company success, it’s not about how much you invest but the passion that drives the dream is what matters most.