When many people talk about starting a trucking business, they usually mean that they want to become an owner-operator. It means that they aim to own and operate the truck in their company. It falls under the category of one-man operation and is considered a self-employed trucking company owner.
When getting started on a truck business, it might not seem easy at first. But with a lot of research and knowledge, you can get the hang of it. As with every business, when you research the topics, each will brand off in many directions and more questions will rise in your mind. You just need to keep going and get the answers to start your trucking business successfully.
Let’s have a look at some of the most important things that you need to know before you start a trucking business.
Business License and Permits
Firstly, you need to decide what kind of business licenses you need for your vehicles like you may need a DOT Authority for interstate travel. This step is necessary to make your company official. Since trucking is a federally regulated industry, there are some requirements that you need to meet whether you run intrastate or interstate.
Here are some requirements that you have to fulfill depending on your state and the type of trucking business you run:
- Get the USDOT number and Motor Carrier (MC) Number through the Federal Motor Carrier Safety Administration (FMCSA).
- Get an International Registration Palm and International Fuel Tax Association decal.
Kind of Freight for Your Truck
Some drivers haul almost anything because that works with their trailer type while other truck businesses specialize and tend to do the same freight regularly. Before you go out to purchase equipment, you need to have an idea of what kind of freight you will be hauling.
You can choose from many trailer types like van, refrigerated, flatbed, removable gooseneck, tanker, and much more. Since there are many trailer types, you will want to narrow down to the ones that meet your specific business operations.
Choose Your Equipment
Before you identify your equipment needs, you need to figure out where you will operate because some trucks are better suited for long-haul operations as compared to others. In the trucking business, equipment usually means trucks and trailers. If you look at the prices, tractors can cost around $30,000 for a used model and $250,000 for a custom sleep truck. Trailers can range from $10,000 to $120,000 depending upon what kind of freight you will be haunting.
Do some research online and ask questions. You can also talk to drivers if you see the kind of freight that you are interested in.
Create a Business Structure
The type of business structure you choose depends upon your situation. Search through the available legal business structures and decide which one suits you the best. If you want to go for the simplest with the least amount of paperwork then that is a sole proprietorship.
Learn How to Handle Maintenance and Repair
When it comes to running a truck business, repairs can be one of the biggest drains. If you are hit with a huge repair then it could blow up through savings. Trailers usually need an occasional repair while tractors may need more money.
So your number one priority should be to ensure good maintenance of your equipment. It will cost you some money but save you from loss in the long run. Look for a repair shop that is professional with their services and knows how to maintain trucks and trailers. If you are mechanically inclined, you can save money and do the maintenance and minor repair work on your own.
Hire a Professional Accountant
Whether you decide to file taxes yourself or hire a professional, you should know that the trucking business is quite similar to any other business. You will also need to file taxes like others along with industry-related specifics like fuel tax, equipment depreciation, per diem, repairs, and much more.
Running any business takes a lot of work so it would be beneficial to hire an accountant who is familiar with tax law, tax codes, and even the trucking industry.
