If you’re passionate about trucking, starting a business could be the key to liberating yourself from the limitations of a nine-to-five job.
However, like any business venture, starting a trucking business can be intimidating without prior experience.
You’re not alone if you’re struggling with turning your passion into a dream.
While it’s difficult to imagine you’ll succeed in breaking into an industry that generates over $700 billion per year, starting a trucking business isn’t as difficult as people make it be.
Many successful trucking companies are small fleets with a handful of employees, so hold on to your passion – we’ll tell you how to start a trucking business with one truck.
You’ll be ready to launch it confidently and turn it into a six-figure revenue stream by the time we’re done!
- How Profitable is Owning a Trucking Business?
- What You’ll Need to Start a Trucking Business [& Associated Costs]
- Why You Should Consider Starting a Trucking Business As a Side Hustle
- How To Start A Trucking Business With One Truck in 8 Simple Steps
- Things to Consider When Building a Trucking Business
- INSPIRATION: Trucking Business Ideas
- Frequently Asked Questions
- Similar Businesses to Consider Starting
- Wrapping Up
How Profitable is Owning a Trucking Business?
Once you launch your single-truck business, its success will depend on several factors.
The factors that influence your trucking business’ success are the operational costs (fuel costs, maintenance, repair, driver wages, etc.), the type of freight, how many commercial vehicles you have, and most importantly, your hard work and determination.
But let’s talk numbers. According to the SBA (Small Business Administration), the average annual income of small trucking businesses ranges from $200,000 to $500,000. With a profit margin of 5%, that equates to:
- $10,000 to $25,000 of net profit with an annual income of $200,000
- $25,000 to $62,500 of net profit with an annual income of $500,000
Although these numbers may seem dispiriting at first, remember that they’re statistics of small businesses.
So, it’s best to learn how to run a business to grow your customer base, evolve your business model, expand your operations, and achieve a higher annual profit.
What You’ll Need to Start a Trucking Business [& Associated Costs]
Several legal requirements come into play to permit a business entity to operate. In the case of trucking, these are the things every small business needs:
- Commercial Driver’s License: Obtaining a CDL is necessary to becoming a truck driver. This license is required to operate large vehicles. You’ll be tested rigorously through a background check and several exams, including a written, medical, and driving exam, before being issued one. The average cost of a CDL is $300.
- A Commercial Truck: Depending on the type of truck, its age, mileage, and features, it can cost anywhere from $30,000 to $150,000. Leasing trucks is also an option.
- Business Registration: Registering your business comes with an application fee that ranges from $50 to $500. While a sole proprietorship is the cheapest option, a Limited Liability Company provides liability protection and flexibility in management.
- Trucking Authority: This allows you to get paid for transporting goods. Register for a USDOT number on the FMCSA (Federal Motor Carrier Safety Administration) website and apply for an MC (Motor Carrier) number. This costs $300.
- Business Insurance: You’ll need liability insurance and cargo insurance. You’ll also need physical damage insurance if you leased the truck. Depending on your coverage, the cost is around $10,000 to $15,000 per year.
- Permits and Licenses: Permits such as the IFTA, UCL, and IPR are required by government regulations and allow for interstate commerce, paying fuel taxes, etc. Their cost depends on your number of trucks, the states you operate in, etc. They range from$1,000 to $3,000 per year.
- Operation Fees: Operating expenses include fuel, repair, and maintenance costs, and dispatch and administrative costs such as accounting, business liabilities, software, hardware equipment (load boards, for example), etc. These fees depend on the size of your business but can reach$50,000 for maintenance and $10,000 for administrative costs.
- Marketing: To advertise your business and grow your clientele. Depending on your business decisions and plan, marketing can cost anywhere from $500 to $5,000 yearly.
Fortunately, business loans are an option if funding is a concern.
Programs like SBA Microloans can provide startup funding of up to $50,000 if your business plan is solid.
You can also look to private lenders and bank loans to cover initial costs.
Do I Need a License or Certificates to Start a Trucking Business?
Yes! There are several business licenses you’ll need to start a trucking side hustle. These include a CDL, business registration, operating authority, insurance, and any extra necessary permits.
Certificates are unnecessary, however. But, you can enlist in training programs to better your management, marketing, or interpersonal skills to help manage your business more efficiently.
Why You Should Consider Starting a Trucking Business As a Side Hustle
Starting a trucking business is a way to break into the transportation industry, which nets the country hundreds of billions of dollars per year.
Aside from freeing free yourself from the struggles of nine-to-five jobs by turning from driver to owner and working under your terms, trucking businesses have several standout characteristics:
- Low Startup Costs: Starting a trucking business with a single truck is significantly cheaper than investing in other businesses. Even if funding is a concern, there are many funding options available. For example, some organizations offer hefty grants for truck drivers with generous repayment terms.
- Always In-Demand: Trucking services are always in demand, so work will always be available.
- Potential for Growth: Even if you start with a single truck, with enough time, dedication, and a great trucking business plan, you can turn your business into a full-time endeavor that’ll replace your job.
- Total Control and Valuable Experience: You’ll have complete control over your freight rates, the type of cargo you transport, who you work with, and when you work.
How To Start A Trucking Business With One Truck in 8 Simple Steps
Read on if you’re ready to start your trucking business. We’ll tell you how to get it up and running in eight simple steps.
Step 1: Create a Business Plan
The first step to starting any business is having an appropriate plan ready.
It’ll help you define your business goals and the practices you’ll follow to achieve them.
The key elements you should plan carefully are the financial plan and funding, legalities, operations, market research, and services.
Step 2: Register Your Business
Registering your business will protect your assets from business liabilities and allow you to operate in your state legally. There are three steps to this:
1. Choose a Business Structure
There are several types of trucking businesses, from sole proprietorships to LLCs. Each structure has its advantages and disadvantages, so do your research and consult with a lawyer to find what’s best for you.
2. Register your Company
Register your company in the state you’ll operate in by submitting paperwork to the Secretary of State’s office and paying a fee. The process and costs differ depending on your state.
3. Get an EIN from the IRS
The Federal Employer Identification Number (EIN) is a unique ID number that allows you to operate legally, hire employees, open a business bank, and take advantage of any benefits a registered business entity offers. You can apply for one online, via mail, or by fax.
Step 3: Pick Your Process Agent
The process agent will be responsible for handling any legal documents or duties on behalf of your business, such as BOC-3 filings and court summons, and keeping your business’ legal side in check.
Research for one online or ask for recommendations from your legal counsel or associates.
Step 4: Obtain Permits and Licenses
Get the necessary permits and licenses to operate without trouble across your state or nationally.
You’ll also be able to get financing to help in this step if you register your business first. Some licenses you’ll need include:
– CDL (Commercial Driving License)
– IFTA (International Fuel Tax Agreement)
– IRP (International Registration Plan)
– UCR (Unified Carrier Registration)
– MC (Motor Carrier) and a USDOT number (for trucking authority)
IFTA and IRP can be obtained from your base jurisdiction. Talk to their respective administrators to learn about the procedure.
Step 5: Get a Truck
Purchase or lease your first truck and trailer!
Make sure it’s suitable for the freight you’ll be hauling.
Different trucks are suitable for different jobs, and several factors influence freight rates. Consider small business bank loans if you’re looking for commercial truck financing.
Step 6: Get Insurance
Liability insurance covers damage caused to other people and property due to your truck company’s operations.
Cargo insurance protects your cargo in case of damage, theft, or loss. And physical damage insurance protects your truck from any physical damage caused by accidents.
Getting insurance is critical. It’ll protect you and your personal assets from costly lawsuits. You can learn more about insurance costs from an insurance agent.
Step 7: Hire Employees
Consider hiring employees to help you once your business grows from one truck to a fleet of trucks and there’s more work.
A professional truck driver, a bookkeeper, a dispatcher, and a dedicated repairman can go a long way toward easing your everyday operations.
Step 8: Market your Business
Start marketing your business to grow your clientele and network with other trucking companies.
Launch a website, use social media, print business cards, or seek help from a marketing agency.
Things to Consider When Building a Trucking Business
While building a trucking business, consider these things to ensure its success:
- You should assess the demand for your trucking services in your area. Study the market to find out if what you provide is in demand.
- You must know who your competitors are and learn their strengths and weaknesses to stand out.
- You need to hire the right employees later on. While you can run a single-truck business by yourself, you’ll need help once it grows. So, learn management skills and determine your staffing needs.
- You need to carefully calculate the costs of launching your business and how you’ll fund it. Launching a small trucking business can cost from $100,000 to $200,000 in the U.S.
- You need to carefully study your state’s laws and regulations and comply with them to keep operating.
- You need to develop a good marketing strategy to attract potential customers and network with other trucking businesses to grow.
INSPIRATION: Trucking Business Ideas
Trucking isn’t limited to hauling goods interstate! Your trucking business can offer many services to its clients, for example:
- Refrigerated Food Transport: A business where you transport temperature-sensitive goods such as food and pharmaceuticals. You’ll need a refrigerated truck.
- Moving Business: A business where you transport the personal belongings of people to their new homes. You’ll need specialized equipment to transport fragile items safely.
- Express Freight Delivery: A business where you transport small loads of high-value items as quickly as possible to clients – ideal if you’re starting with a single truck.
Frequently Asked Questions
Who Pays the Most in Trucking?
It depends on factors such as distance, weight, and freight type. Generally, delivering specialized goods such as hazardous materials or making long-distance hauls pays the most.
What Percentage of Trucking Companies Fail?
What Are Some Common Challenges the Trucking Business Faces?
Some common challenges trucking businesses face include rising fuel costs, tough competition, changing state regulations, and workforce shortages.
What Types of Trucks Are Used for Trucking?
There are several types, including flatbeds, box trucks, tankers, and refrigerated trucks.
Will the Trucking Industry Continue to Grow?
Absolutely. There’s always a demand for transporting all types of goods, and it’ll only continue to grow due to people’s increasing need for the said services.
Similar Businesses to Consider Starting
There are several opportunities for you to make money off a side hustle if long-haul trucking isn’t your cup of tea. Let’s look at a few alternative options.
- How to Start a Box Truck Business: Learn how to launch a successful trucking business wherein you transport personal belongings or make small-time deliveries across your locale.
- How to Start a Food Truck Business: Learn how to access and thrive in the restaurant industry through a food truck.
Starting a trucking business can be your way to liberate yourself from a limiting job and become a free business owner.
Although the trucking industry requires tremendous patience and determination to thrive, having the appropriate guidance can go a long way toward helping you launch a successful trucking business.
Our steps tell you precisely what you need to know to get started.
We’ve done our research to rid you of any potential headaches you’ll face during your journey to financial independence, so tell us what you think and share the article if you liked it!