How to Start a Trucking Company

The trucking industry is growing with 70 percent of the freight moved each year in the United States. You can take advantage of that growth and start a trucking company. Do you want to start a trucking business but don't know how to go about it? Starting a trucking company is a huge responsibility and can be overwhelming to take the first steps. Here is a step-by-step guide to help you start a business.

Establish your business legally

The first thing you have to do is form a limited liability company (LLC). With an LLC structure, your assets are separated from business liabilities. Apart from protecting your assets, an LLC also offers business, tax, and legal advantages.

  • You'll need to appoint a registered agent who will be your point of contact with the state.
  • You'll also need an Employer identification number(EIN) to open a bank account. The EIN is crucial as it is needed in several aspects of your business.

Get the required business licenses

Most county, state, and local governments require companies to have business licenses and permits. If you are not already driving, you need a commercial driver's license (CDL) and driving experience. However, most owner-operators start as drivers, so you may have already completed this step. After getting that out of the way, you'll need business licenses and permits. You'll need the following:

  • Motor carrier operating authority (MC) number: indicates the cargo a trucking company may carry and the type of operation.
  • USDOT number: it identifies your company during audits and inspections
  • International registration plan (IRP and International fuel tax agreement (IFTA): It's needed for companies offering services in multiple states.

Buy or lease equipment

The proper equipment can make a difference whether your owner-operator company becomes a success or a failure. Your finances will come into play when deciding whether to buy or lease equipment. Leasing a truck is good if you want to cut down on the monthly costs.

Buying equipment, on the other hand, saves you money upfront but will cost more later. Purchasing is a better option if you have enough capital to make a down payment.

Get insurance coverage

You'll need insurance for your owner-operator's business. Contact several agents to get the best coverage. Here are the options to consider when choosing an insurance policy:

  • Cargo insurance
  • Primary liability insurance
  • Physical damage insurance

Track your income and expenses

As an owner-operator, you need to be attentive and stay up to date with filing requirements. Missing deadlines will only make you get penalties and lose good standing. You'll need a system to track your income and expenses. Your business will receive payments weeks or months after delivery and that makes it hard to track expenditures.

You can use bookkeeping software to keep track of your income and expenses. You can also use factoring to solve financial issues. With factoring, you can get back into business within a short time and keep your trucking business moving forward.

Have a good dispatching company

You'll also need a truck dispatcher to smoothly run your owner-operator business. A dispatch company helps you manage the back-office aspects of running your business, like finding loads, providing end-to-end services, and making sure shippers pay their invoice on time.

Outsourcing your administrative tasks to 24/7 DISPATCH helps you to focus on growing your business. Contact us today.