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Registering your business is an absolutely crucial step — a prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
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Written by: Carolyn Young
Carolyn Young has over 25 years of experience in business in various roles, including bank management, marketing management, and business education.
Published on November 4, 2021
Updated on December 25, 2022
Investment range
$25,700 – $203,200
Revenue potential
$115,000 - $942,000 p.a.
Time to build
1 - 3 months
Profit potential
$58,000 - $188,000 p.a.
Industry trend
Recovering post-pandemic shutdown, Growing
Commitment
Full-time
The demand for transporting goods is strong and constant, which makes trucking big business. If you are a truck driver, or even if you’re not yet, you could start a lucrative trucking business of your own. It could be a great opportunity for you to take advantage of the market, and work for yourself.
Of course, starting any kind of business takes a lot of work. The key to success is gaining the requisite knowledge and moving patiently through the development and launch process, as detailed in this step-by-step guide.
Starting a trucking business requires significant time, money, and effort. Before you jump in, it’s a good idea to educate yourself so you avoid the most common pitfalls.
Every business has its pros and cons, which you should weigh to decide whether a trucking business is a good fit for you.
Here are some basic pros and cons of starting and running a trucking business.
The trucking industry is highly sensitive to economic fluctuations. When commerce is up, the trucking industry flourishes. During economic downturns when consumers make fewer purchases, there are fewer deliveries and trucking suffers.
Trends in the trucking industry include:
Challenges in the trucking industry include:
The startup costs for a single-vehicle trucking business range from about $25,000 to more than $200,000. To start with a fleet of trucks, you would of course need much more capital.
You will need several key items to successfully launch a trucking business, starting with:
Start-up Costs | Ballpark Range | Average |
---|---|---|
Setting up a business name and corporation | $200 - $200 | $200 |
Licenses and permits | $200 - $300 | $250 |
Insurance | $5,000 - $10,000 | $7,500 |
Business cards and brochures | $200 - $300 | $250 |
Website setup | $1,000 - $3,000 | $2,000 |
Initial marketing budget | $200 - $500 | $350 |
Truck and trailer | $15,000 - $175,000 | $95,000 |
IRP plate | $500 - $3,000 | $1,750 |
Heavy vehicle use tax and permit | $100 - $600 | $350 |
US Dot number | $300 - $300 | $300 |
CDL training and license | $3,000 - $10,000 | $6,500 |
Total | $25,700 - $203,200 | $114,450 |
Your profit will vary depending on whether your business is a one-person, one-truck operation, or has a fleet of trucks and several drivers.
The average truck business owner-operator makes $1.55 in revenue per mile and drivers average 121,500 miles per year, according to industry advisor American Truck Business Services. But if you can drive 75,000 miles your first year, you should make gross revenue of just over $115,000. Expenses generally take about half of your revenue, and include fuel, maintenance, insurance, food, and lodging. This would leave you with a profit of about $58,000.
As you build a reputation, you might acquire more trucks and hire drivers, with each driver reaching the industry average of 121,500 annual miles. If you employ five drivers, your gross revenue would be around $942,000, but your profit margin would drop to 20%. You’d still make a profit of $188,000.
There are some real barriers to entry for a trucking business, including:
Now that you have a good idea of what’s involved in starting a trucking business, you might want to hone your concept in preparation to enter a competitive marketplace.
Research US trucking and look for industry needs and weaknesses. Maybe there’s a certain kind of freight that is short on committed drivers. You could start by calling trucking firms and asking if they’re looking for drivers — this is a good indication that that line of work offers a real opportunity.
Once you have built a proven track record, it will be easier to get new clients and repeat business, which will be key to your business success.
Determine if you want to specialize in a certain industry or in a certain region of the country. Keep in mind, a bigger driving range will likely mean more opportunities.
When you are just starting out, you may have to charge a lower-than-average price until you build a reputation. On average, owner-operator drivers make $1.55 per mile. But to command that price you will need to first make a name for yourself through industry experience.
Research trucking services in your area to determine the best prices for your market.
Your target market will be just about any company with goods to transport. A good way to start is to research which businesses transport the most goods and then give them a call offering your services at a discount. If you do a stellar job, you should be able to retain them and gradually increase your price to the market rate.
In the early stages, you can operate your business from home to keep costs in check, assuming you have space for your truck. But as your business grows, you may need to hire workers for various job roles and rent out an office. Find commercial space to rent in your area on Loopnet, Craigslist, Crexi, and Commercial Cafe.
When choosing a commercial space, you may want to follow these four rules of thumb:
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Every business needs a plan, a rough outline that helps guide a startup through the launch process while maintaining focus on key goals. A business plan is also crucial for helping potential partners and investors understand your company and vision:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — a prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s done, you have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to trucking.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your trucking business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate on a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a trucking business.
Starting a trucking business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your trucking business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked but is vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business, and your life.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software such as prophesy, ezloads, and tenstreet to find and hire qualified drivers, manage billing and payments, simplify communication, and more.
Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
Unique selling propositions, or USPs, are the unique characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your trucking business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your trucking business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a trucking business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working as a truck driver for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in trucking. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
You may not need to hire any employees straight away if you plan to start small and use your home as your office. But as your business grows, you may add more trucks and find a need to hire staff. Potential employees for a trucking business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
The trucking industry may have been severely impacted by the Covid-19 pandemic, but the long-term trend is still positive, according to the American Trucking Associations. So if you’ve been planning to buy that truck and get into business, act on it now.
In your first year, it’s a good idea to create a niche for yourself to jumpstart your word-of-mouth marketing. But as a trucking business owner, however, you probably will not want to stick with one niche for long. You’ll want to be available for a broad variety of transport services.
You’re now ready to start your entrepreneurial journey in the trucking industry. Good luck!
With one truck, you’ll be an owner-operator and a one-person show. It’s a lot of work — you’ll do your own sales and marketing, manage operations, and drive the truck — but the rewards are all yours.
The profit potential in trucking is solid, with most owner-operators making at least $58,000 in a year. With five trucks and drivers you could push your profit up to nearly $190,000.
Start-up costs range from $25,000 to $200,000 for a one-truck operation. The key to keeping start-up costs down is to find and buy a reliable used truck.
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