With the constant need for the transportation of goods across various industries, starting a trucking company can be a lucrative venture with high demand. However, the road to success requires a significant upfront investment, ranging from $10,000 for a small used truck to over $500,000 for a larger fleet of 18-wheelers. You’ll also need a strong foundation of industry knowledge, logistics, and fleet management skills.
With average profit margins ranging from 5% to 10%, the potential for a profitable business is there, but you must be prepared to navigate the complexities of transportation regulations, fuel costs, and truck maintenance. Are you ready to hit the road and explore the opportunities in the trucking industry? Let’s discuss the required steps to starting your own trucking company.
|Estimated startup costs can range from $10,000 (small used truck) to $500,000+ (larger fleet with multiple trucks).
|Knowledge of the trucking industry, logistics, fleet management, and general business management skills.
|High demand due to the need for transportation of goods across various industries.
|Can operate nationwide, with the location depending on the target market and transportation routes.
|Variable — often includes long and irregular hours to meet transportation deadlines.
|Permits and Licenses
|Business license (in some areas), commercial driver’s licenses, and compliance with Department of Transportation regulations.
|Average profit margins range from 5% to 10%, depending on the fleet size, contracts, and operational costs.
|Managing fuel costs, maintaining a fleet of trucks, and adhering to strict transportation regulations.
There’s a reason most new businesses create a business plan as their first step: Business plans increase your chances for success. When you lay out how your trucking company will operate and grow amid the competition, you’ll have fewer surprises to trip you up. According to the U.S. Small Business Administration, basic components of a business plan include:
To avoid drowning in the details, set S.M.A.R.T. goals. The S.M.A.R.T. approach below will keep your plan and business from being too generic to drive value:
When choosing a business structure, most small start-ups opt to create an LLC or a sole proprietorship. While a sole proprietorship requires less paperwork and lower fees to get off the ground, an LLC has distinct advantages.
When you establish an LLC, your liability is limited to the amount of your investment. As a member of the corporation, you won’t be personally liable for its debts. On the other hand, creditors can go after proprietors more fully. They can tap into your house, car, and other personal property to pay off debts incurred through business operations. So, even though you’ll have to cough up a little extra money for state fees for an LLC, it’s worth it for the peace of mind. Using an LLC formation service can streamline this process, leaving you with more time and energy to focus on running your business.
For business taxes, both types of companies must report income and expenses on Schedule C of Form 1040. You’ll pay taxes on your income, whether you take a paycheck or not. You’ll deduct business expenses from your gross income, so be sure to maintain good records and save all receipts in case of an audit. The tax filing process will change a bit if you’ve brought on multiple members as part of your LLC, so keep that in mind if this is your plan.
If you hire employees, both LLCs and sole proprietors must:
While fun names can be easy to remember, you want potential customers to find you. Your name should clearly reflect the general industry (e.g., trucking, hauling, freight) and the services you provide. So, while Thomas Enterprises is nice and simple, it gives no indication that you move goods from A to B.
Coming up with the perfect name for your LLC can be exciting, but legally, whatever name you choose for your trucking company must be one of a kind. Most states have an online business name database through their Secretary of State website. Search it to see if the name is taken. If it is, head back to the drawing board, because simply adding an “s” or altering the punctuation isn’t enough to claim your LLC’s name as unique.
Once you establish an original name, visit the U.S. Patent and Trademark Office website to ensure it isn’t trademarked.
Also check the availability of a domain name and register it. The more unique your business name, the more likely it’s already in use, but you can get creative by adding extra words. For example, “Thomas Timely Trucking” may translate to “ThomasTimelyTruckingLLC.com” or “ThomasTimelyTruckingOnline.com.”
Name Your Business
Enter your desired company name to get started
You can quickly set up an trucking business LLC, open accounts, and get compliant by working your way through these instructions:
Don’t skimp on compliance. It may sound daunting, but in the trucking industry it just means dotting a few i’s and crossing some t’s. Look into a USDOT number, operating authority, heavy vehicle use tax, international registration plan, and BOC-3 Filing, among others.
What about money to get you out on the road? Entrepreneurs looking to start a trucking company can expect an initial investment of $10,000 to $30,000. That covers vehicle down payments, insurance, permits, and a range of expenses specific to your state.
Before you acquire funds, calculate the fixed costs, ongoing expenses, and one-time costs. Fixed costs may include garage rental, monthly truck payments, and insurance. Ongoing costs could be fuel, utilities, taxes, and payroll. One-time costs include licensing or permits, signs, and office furniture and equipment.
Obviously, a lot depends on the size and type of truck you need (for example, refrigeration vs. standard freight) and whether you’ll lease a vehicle or purchase outright.
While a new commercial truck costs more, it also offers the assurance of fewer repairs and less maintenance, which can save money and prevent losses from downtime.
That’s not to say a second-hand unit can’t be well-maintained. If you do buy used, insist on a pre-purchase inspection for rust, mileage, body damage, hidden engine problems, and worn tires. Ask to review the truck’s maintenance and oil change history, too.
Once you determine how much financing you need, brainstorm and research funding options. Consider:
If you’re not buying a truck outright, select a leasing financial plan. Most startup trucking companies will choose from these three options:
What equipment will you buy? That depends on several factors:
You can always start with a single, basic vehicle and adjust your equipment inventory as you grow.
Marketing your new trucking business requires a mix of approaches, but you’ll want to create a website first. Wix and Weebly are two great, out-of-the-box options with premade templates or ZenBusiness offers websites. Claim your business on Google and add it to local business directories for a quick, high-return marketing jumpstart.
Promote your business on social media platforms too, like Facebook, Twitter, Instagram, and LinkedIn. Online freight boards can also help you find customers.
Print collateral like brochures, business cards, and direct mail can help you drum up business, but word-of-mouth promotion works best for most new trucking firms at first. Doing top-notch, thorough work for a few bread-and-butter customers is a solid way to build a deep client list fast.
There are five general classifications of trucking companies you can start. Browse this list and choose the one that best fits your interests, budget, capabilities, and time commitment:
Starting a trucking company can be a high-risk venture, but with a large market (read: high demand) that’s continually growing, profits can be high. Once you establish your trucking business, expect to thrive in a well-paid profession where you set your own schedule and work as your own boss.
LLC formation starts at $0 + state fee
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Start an LLC in Your State
When it comes to compliance, costs, and other factors, these are popular states for forming an LLC.
Ready to Start Your Trucking Company?