Trucking is one of the biggest and most profitable industries in the United States.
Without small trucking companies and the drivers who work for them, the economy would come to a standstill. Now is the time to get into the trucking industry by starting a trucking company.
Before you get started, take time to develop a basic business plan covering what type of equipment you will need, if you plan to purchase or lease that equipment, and who your drivers will be. While you may wait until just before getting insurance coverage in place to obtain your equipment, you will want to have an idea in mind of the type of equipment and associated costs before starting this process.
There are a lot of steps to starting and running a trucking company, and it can be a confusing process.
Stay organized and set your trucking company up for success with these steps.
Form Your Trucking Company and Get Trucking Authority
To start a trucking company, the first you’ll need to get a United States Department of Transportation (USDOT) number and motor carrier operating authority (MC) number from the Federal Motor Carrier Safety Administration (FMCSA). Along with insurance and other required filings and registrations, the process can be lengthy and difficult. There are services like the Apex Startup Program that can help you start your own trucking company by collecting all the necessary information, assisting with entity formation in your home state, completing and filing the appropriate registration applications, and sending you a Record Book with all the paperwork.
Find Loads to Haul
If you’re new to the trucking industry, online load boards can help you find freight so you can start hauling. You can try free load boards, like NextLOAD.com, or pay a monthly subscription at other load boards. Load boards can help you create and establish relationships with a variety of brokers and shippers. Once you have a solid customer base, you can build relationships and establish direct lanes to create stable income.
Check Credit Regularly
Checking credit on your customers before you haul a load is one of the best ways to evaluate brokers and shippers. Doing so will help you feel confident that your customers will pay regularly. Subscriptions to credit services are available, but can be expensive. To maximize your efforts, try to choose loads that pay more per mile, not necessarily faster. When you factor with Apex Capital, you get unlimited, free credit checks, which can help you make the best decisions for your trucking company.
Know Your Expenses
It’s important to know your trucking company’s business expenses. A profit and loss statement or bookkeeping software are great ways to track insurance payments, maintenance costs, truck repairs, truck and trailer payments, fuel, office expenses, salaries, and other monthly expenses. You can even track tax deductions, which can help you save money. By having all of your company expenses in one place, you’ll know exactly how much it costs to run your business. This will help you to set a minimum amount per mile required to make a profit, so you never undercharge or come up short on a load.
Save Money on Fuel
Fuel can be up to 40% of a trucking company’s operating expenses. Getting a fuel card can help you control and manage your fuel purchases and save money at the pump. When you use a fuel card, like the TransConnect Services fuel card, you always get the cash price or better, including additional discounts, at thousands of truck stops. Using a fuel card also gives you other benefits like fuel management tools, IFTA reporting information, fuel theft protection and more.
Manage Cash Flow
As a start-up business, you might not be able to get to a line of credit from a bank required to keep your trucks running. As an alternative to bank financing, a factoring company can provide you with operating cash flow through the purchase of your freight bills. Freight bill factoring is a smart way for small to medium-sized trucking companies to manage cash flow and keep their trucks on the road. Instead of waiting 30, 60 or 90 days for your customer to pay, factoring companies will advance you a percentage of your load when you deliver, so you can have operating cash to pay for insurance, pay roll, truck repairs, fuel and more.
Get Back Office Help
If you’re starting a trucking company as a small carrier or owner-operator, you’ll need to make time for paperwork and for contacting your customers for payment. If you don’t have good systems in place, this can take a lot of time away from running your trucking company. Having a partner who can handle the paperwork and collection effort streamlines this process, so you can focus on operations. One of the benefits of factoring is that your factoring company will collect from your customers for you. Just be sure to work with a factoring company that treats your customers in a professional, courteous and civil manner.