7 Steps to Starting a Successful Trucking Company
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, literally. So why not get into an industry that will always be in high demand, like trucking, by running a successful trucking company?
Before you get started, it’s a good idea to take the time to develop a basic business plan. This business plan should include the type of equipment you will have, whether you plan to purchase or lease that equipment, and who your drivers will be. While your equipment can be obtained after you have an insurance coverage plan in place, it’s important to know the type of equipment you want because you’ll need to know the associated costs before starting this process.
Believe it or not getting equipment and insurance is only one piece of starting your own trucking company! There are a lot of other steps to starting and running a trucking company, and it can be a confusing process.
With these seven steps you can set your trucking company up for success and stay organized.
Step 1: Form Your Trucking Company and Get Trucking Authority
To start a trucking company, you’ll first need to get a United States Department of Transportation (USDOT) Number and Motor Carrier operating authority Number, or MC Number, from the Federal Motor Carrier Safety Administration (FMCSA). Along with insurance, equipment purchases or leases, and other required filings and registrations, the process can be lengthy and complicated. Services like the Apex Startup Program can help you start your own trucking company easily. We handle the tedious parts for you. We do everything from collecting all the necessary information, and assisting with entity formation in your home state to completing and filing the appropriate registration applications. Once your trucking company has active authority we send you a Record Book with all the paperwork organized and ready to go.
Step 2: 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. 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 on those relationships. In some cases you can start hauling directly for your customers and establish your own lanes which creates a regular, stable income.
Step 3: Check Credit Regularly
Checking credit on your customers before you haul a load is one of the best habits to form. Doing so routinely helps you assess brokers and shippers. Running credit checks 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.
Step 4: Know Your Expenses
It’s important to know your trucking company’s business expenses. A profit and loss statement or bookkeeping software are two of the most effective ways to track insurance payments, truck maintenance and repairs, truck and trailer finance payments, fuel, office expenses, salaries, and other expenses. You can even track tax deductions, which can help you save money. When you have all your company expenses in one place, you’ll know exactly how much it costs to run your business. Knowing how much it costs to run your trucking company is important to ensure that your business is profitable. Setting a minimum amount for your cost per mile will help so you never get undercharged or come up short on a load.
Step 5: Save Money on Fuel
Fuel can account for 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 Apex fuel card, you always get the cash price or better 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.
Step 6: Manage Cash Flow
As a start-up business, you’ve just spent a small fortune getting your insurance premiums paid and your truck financed or purchased and once you haul a load, you have to wait 30, 60, or even 90 days for your customers to pay. You might not be able to get a line of credit from a bank in order 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 and easy way for small to medium-sized trucking companies to manage their cash flow. Instead of waiting for your customer to pay, factoring companies will advance you a percentage of your load the same day you deliver, so you can have operating cash to pay for insurance, pay roll, truck repairs, fuel, and more.
Step 7: 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 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 help with billing paperwork and collections streamlines this process, so you can spend your time focusing on operations. One of the benefits of factoring is that your factoring company handles the collections for you. Just be sure to work with a factoring company that treats your customers in a professional, courteous, and civil manner.
You Can Do It
These seven steps can put you on your path to starting a successful trucking company. Many of our clients start out with one truck and a dream. With a little hard work and dedication they lead to growing their trucking company into an impressive fleet. What’s their secret? Finding the support systems that make their jobs easier. It can be as small as finding a load board that makes booking loads quick, a fuel card that saves you thousands on fuel, or a freight factoring company that serves as your back-office support. A few steps can quickly add up over time.
Learn More about Starting a Trucking Company
Planning for Costs
Wondering how much it’s going to cost to start a trucking company? Learn more about the initial costs and ongoing expenses to plan for as you get your trucking business started.
Name Your Company
Choosing a name for your trucking company sounds simple, right? It can be little more complicated than it seems. Here are some ideas and requirements for trucking company names.
What to Expect
Running your trucking company for the first year has it’s own set of challenges. In this guide, we outline what to expect in the first year of trucking, or your “new entrant period”.