If you’re an entrepreneur looking for a line of work that pays well and where demand far exceeds supply, then you may want to consider becoming a truck driver and building a career as a logistics service provider. This is such a lucrative field that global market value is not measured in billions but in trillions. It’s flourishing because the world’s supply chain never sleeps. Goods are constantly being transported between points of origin to points of consumption; transported over land, sea, and air; and transported within countries, over borders, and between continents.
After getting your commercial driver licensing, buying or leasing a truck, registering as an operating authority, and creating your own company, you could get a fast start by looking for loads on load boards. Since most trucking contracts require you to give your customers 30- to 60-day credit, you may also want to use a financing company like TBS Factoring to sell your invoices so that you have positive cash flow. Additionally, quickly build a reputation as a reliable provider by applying for fuel cards to get discounts on gas and by using mobile apps to find truck stops, scales, rest stops, and service stations on your delivery routes.
Here’s a roadmap to help you launch your own truck driving business:
Table of Contents
Get Skilled Up
How do you start? Start at the beginning. Long before you figure out how to finance your truck or how to launch your own business, get your CDL and then get some experience. If this is too big a leap for you, if you’re not fully prepared to become an independent owner-operator right away, then join a trucking company that has its own training program or that will pay for you to go to school to earn your commercial driver’s license.
Create a Business Plan
Build a solid business plan. If you’re not sure how to write one, then hire a business adviser to help you develop a realistic plan that you can take to the bank. What will your expenses be? How much revenue do you hope to earn? Figure out all the details.
Set Up Your Company
You could set up your trucking business as a sole proprietorship, as a partnership, as limited liability corporation (LLC), or as a corporation (either as C- or an S-corp). Each legal structure has its advantages and disadvantages. If you can’t figure out which one to use for your business, then get professional advice on what will work for your business model.
Get at Least 6-Months of Working Capital
Your biggest start-up expense, of course, will be the cost of your tractor and trailer. Decide whether you want an Operating Lease, a Terminal Rental Adjustment Clause Lease, or a Lease-Purchase plan. Choose an Operating Lease if you’re prepared to take care of permits, taxes, and maintenance and walk away when the lease comes to an end. Choose a Terminal Rental Adjustment Clause Lease if you want to make a small payment and cover the difference in value and cost price when the lease comes to an end. Or choose a Lease-Purchase plan if you can’t afford a down payment and are prepared to pay more in the long-term.
Next, either get a substantial loan or secure a good line of credit. Remember your business plan is only a financial forecast and if you start out with too little money, then the smallest setback could prematurely force you out of business.
Besides the start-up expenses, there will be the cost of business operations. For instance, the cost of parking, the cost of maintenance, the cost of marketing, and the cost of hiring employees or outsourcing services (e.g. bookkeeping and invoicing.)
Compliance and Insurance
Before you start you must comply with a number of trucking regulations like:
- USDOT Number
- Operating Authority
- Heavy Vehicle Use Tax
- International Registration Plan (IRP)
- International Fuel Tax Agreement (IFTA)
- BOC-3 Filing
In addition, you will need to consider Primary Liability, Cargo, Physical Damage, and Non-Trucking Use (Bobtail) insurance.
In conclusion, although it may seem as though there are a lot of hoops you have to jump through, your chances of earning six to seven figures a year is fairly realistic. In fact, as your business grows, which can happen fairly quickly if you get good at marketing it, you’ll be spending most of your time organizing the business rather than doing the actual freight hauling yourself.
About Carson Derrow
