With the world shifting online, eCommerce businesses are relying heavily on trucking companies to transport and deliver goods. Such freight services are a pivotal part of their operations, so there is always demand. Because of this, trucking businesses have an excellent opportunity to generate good profit margins and grow exponentially with time. Therefore, if you are considering setting up your own business, the field of trucking is a definite viable option.
As lucrative as the idea sounds, building your trucking startup is no easy task. There is plenty to consider, plan and prepare before you are in the position to launch your company and establish operations. Even after the launch, you need to build a plan to grow the business.
These challenges may prevent you from taking the first step; however, you can be better prepared with the proper guidelines. Here is the ultimate guide to starting and building a successful trucking business.
Prepare a thorough business plan
The success of any startup lies in having a strong business plan at hand, and the world of trucking is no different. Before doing anything else, focus on creating a trucking business plan. You need to consider several factors such as the name of your company, the vision, and mission, the model you plan to operate with the revenue you want to achieve.
Brainstorming on such crucial factors will help you create a very clear roadmap that will be the guiding light for the business. Work out the finances and create projections for at least the next three to five years to understand how much runway you have in terms of money and how much revenue needs to be generated to stay afloat and grow the business. If you plan to raise funding for your startup, a detailed business plan will come in handy to seek the interest of potential investors.
Get the relevant licenses
To start your trucking company, you need to secure the necessary licenses and permits to operate. The requirements will change depending on the country where you are starting your company, so it is advisable to research and contact the relevant authorities. Look up a driving school that offers a commercial driver’s license so that you as a company owner also have the authority to drive a trucking vehicle. If you plan on building a fleet, ensure that they are adequately trained and possess a commercial driving license. You will also need to get authorized before you operate. Other than that, there are additional requirements outlined by authorities, such as the Federal Motors Carrier Safety Administration (FMCSA), that you should look into to avoid legal hurdles and roadblocks.
Determine your business type and establish operations
As you plan your trucking business, an important consideration is the structure of your business. There are some common ways trucking companies are structured, and it is essential to do that for legal and tax-related purposes. Some types of trucking business include sole proprietorship, partnership, corporation, or a limited liability company. Each structure has its pros and cons, so you need to do enough research on all options before settling down with the most suitable one. The sole proprietorship model is most commonly used because it is easy and cheap to execute; however, there are other nuances to consider. Once you determine the business type, you need to focus on creating standard operating procedures for efficient fleet management and generating sales.
Generate adequate funding
Setting up a trucking business requires heavy investment, which is why you need to be ready to put in the work. Even if you have a set amount of savings in the bank, you will still need more as there are several costs involved before you can start generating revenue. Approach banks with your business plan and apply for business loans that can help kick-start the operations. Banks typically require one or two years of operating history, so research into other ways to secure loans as well. You can also approach relevant investors and invite them to provide funding for your startup. There are different rounds of fundraising that you will need to do as your business begins to grow.
The world of trucking is in high demand at the moment, which is why it is the right opportunity to launch your very own trucking business startup. Before you do, make sure you put in the work and do enough research on everything you need to prepare and do to succeed. Once you have solid baseline knowledge, you will be ready to jump right in and learn as you go along the process.