It’s been an up and down year for the trucking industry. After starting off the first half at a loss because of COVID-19, it ended on a high note, thanks to a huge increase in online shopping.
The industry is expected to grow by 7% between now and 2027 as those shifts accelerate because of the prolonged pandemic.
What does that mean for you? It means that if you want to start a trucking company, now is an excellent time to do so. There is a great chance you can create a profitable business, even with an increase in competition.
Are you ready to learn what it takes to build a money-making enterprise from the ground up? Keep reading to learn the steps you need to take to build a profitable trucking business.
The Type of Trucking Business
People have different ideas as to what a trucking business should be. The good news is that you have many options to choose from when you start your trucking business.
One path to start a trucking business is to be a self-employed trucker. You sub-contract through other companies. You get to work your own hours and days, giving you freedom and flexibility.
You are responsible for getting your own health insurance, business insurance, and trucking equipment. You also have to pay self-employment taxes, which can be more than what you’re used to.
Another option is to have a trucking business where you dispatch other truck drivers to deliver goods. You could start as a one-person contractor to gain experience and then decide to scale up into a full-on trucking company.
One type of trucking business that you may find appealing is a trucking logistics business. This is a business that makes a lot of sense right now with the rapid rise of ecommerce.
Write the Business Plan
Once you have your business idea set, you’ll need to write a business plan. This helps you outline everything about your business. More importantly, you understand the internal and external forces that affect your business.
What goes into a business plan? You’ll start off with market research. You have to demonstrate that you know your competition, how they’re positioned in the marketplace, and who their customers are.
You’ll then decide how you’ll differentiate your trucking business from the competition and who your main customers are.
The most important part of the business plan is the financial spreadsheets. These spreadsheets show how much it costs to start your business and the monthly operating expenses.
The hardest thing to do is to estimate your income for the trucking business. There are a number of sales forecasting methods to use.
One of the easiest ones is to look at the sales of local trucking companies and base your projections on those average figures.
Keep in mind that you’ll need to lower those numbers since you’re a brand new business.
License and Register the Business
Your trucking business has to be legal to operate. The first place to register your business is with your state. You’ll decide the legal structure of your business, which can impact how the business is taxed.
The types of licenses you’ll need depend on where your business is located and the goods you transport. At the very least, you’ll need to have a CDL, Motor Carrier’s Authority number, U.S. Department of Transportation registration, and your state’s Department of Transportation registration.
Finance the Business
Did you look at your start-up expenses and think it’s impossible to afford them? You’ll need to find financing for your business.
This is where your business plan pays off because most lenders and investors require a formal business plan. They don’t want to invest in a business that’s going to fail. That’s how they end up losing money.
Take your business plan to a few different lenders and investors and go with the one that offers the best terms for your business.
Once you get the financing in place, you can purchase equipment and find a location for your business.
Get Your First Clients
Marketing a trucking business is a lot different than marketing a consumer-based business. What do you need to do to market your trucking company?
If you did your homework on the business plan, you’ll know exactly why your business is the one clients should choose. You’ll also know where your clients are online and offline. This makes it much easier to find and meet potential clients.
You’ll want to invest in a website, search engine optimization, and paid search ads. These things will help your business get found online and jump-start your business. Networking on LinkedIn is another useful tactic to reach people online.
Look at ways to market your business offline, too. For example, you can look at trade shows that your potential clients attend on a regular basis.
As you get clients, do everything you can to focus on building long-term relationships with them. It’s much easier to upsell existing clients than it is to constantly try to get new clients.
Ask for Reviews and Referrals
If you have a stable of happy customers, you can leverage them into more clients. It doesn’t happen automatically, though.
You need to have systems in place so you can regularly ask for feedback and referrals.
Building a Trucking Company That’s Successful
What does it take to build a trucking company? It starts with a solid idea, but you need to do a lot of work to make it a reality.
For starters, you need to make sure you can legally operate. You have to learn about the marketplace and understand why your company is better than the competition. Once you have those things in place, get your first trucking clients, and keep them happy.
Be sure to check out the home page of this site for more transportation articles.