How to start a trucking business in America
Trucking plays an essential role in the American supply chain. It’s often the most efficient way to move goods between states and even to neighboring countries. Working as a trucker is a demanding yet rewarding career, and truckers are in high demand throughout the US.
Starting your own trucking business gives you the freedom to choose where you drive and what jobs you take on. You can even train other drivers and work behind the scenes to find clients and schedule shipments.
To launch a trucking company in America, you’ll need to get the appropriate licenses and permits in addition to developing your sales and marketing strategy. Here’s what you’ll need to do to start your own trucking business in the US.
1. Write your business plan.
The first step to launching any new business, regardless of industry, is to put together a business plan. This should be a comprehensive overview of how your business will operate.
In particular, your business plan should specify the types of trucking services you’ll offer as well as the types of customers you’ll work with and how you’ll find them. It should also detail your expenses and your sources of revenue. If you plan to hire other drivers or staff beyond yourself, you should detail your hiring methods as well.
If you plan on applying for loans, grants, or other forms of external funding, you’ll likely need to present a business plan to start the process. However, a business plan is more than just a piece of paperwork - it’s also something that you’ll refer back to over time as your business grows.
2. Get your commercial driver’s license.
You’ll likely begin your trucking business as an owner-operator, which means that you’ll drive and handle operations at the same time. In order to drive these shipping routes, you’ll need a commercial driver’s license.
Many owner-operators start their careers driving for a larger company, so there’s a good chance you already have your CDL. However, if you don’t, you’ll need to get one before you can get started.
Attending a CDL training program for truck drivers is usually the most efficient way to prepare for the test. You’ll need to pass a vision exam, written knowledge test, pre-trip vehicle inspection, and driving test in order to get your CDL.
3. Establish your business structure.
There are several different ways to structure a business in the US. Many trucking owners register their businesses as either LLCs or corporations, although you could also launch as a sole proprietorship or partnership.
It’s best to speak with a tax attorney when selecting a business structure to determine which one makes the most sense for you. However, it’s important to note that registering as an LLC or a corporation protects you from personal liability as an owner, and may also come with some tax benefits.
Once you decide which structure you want to use, you’ll need to register your business with the state and get an EIN, which will be essential for filing taxes and hiring employees. Additionally, you should open a business bank account that is separate from your personal account.
4. Get your trucking operating authority and other necessary permits.
In order to offer commercial shipping services in the US, your trucking business will need to apply for operating authority with the federal government. To do this, you’ll need to complete an application with the Federal Motor Carrier Safety Administration (FMCSA) and choose a process agent for your BOC-3 forms. Additionally, you will need to get your motor carrier number as well as your US DOT number.
5. Purchase insurance.
You’ll also need insurance in order to start driving commercially. In general, you’ll need commercial liability and cargo coverage as well as physical damage and passenger accident insurance, but you might also want to add other forms of coverage to protect yourself further.
This insurance will protect both your drivers and other drivers on the road, as well as your vehicle and your customers’ cargo. Since trucking insurance is more complex than traditional road insurance, consider working with an insurance broker to guide you through the process and help you find a provider and policies that best meet your needs.
6. Invest in vehicles, tools, and services.
To get your business off the ground, you’ll need at least one truck. Buying a truck outright can be very expensive, so many new owners opt to lease trucks or participate in a lease-to-own program. You’ll need to determine what type of truck makes the most sense for you, based on the types of jobs you take on and the cargo you carry.
Additionally, you’ll need to invest in tools and services to get your business started. Using a transportation management software (TMS) will help you keep track of your shipments, manage quotes and invoices, work with freight brokers, and dispatch loads to your drivers.
At minimum, you’ll also want to invest in software programs for bookkeeping and marketing. Many busy owners even opt to outsource these services to third-party firms or freelancers to save time and get professional expertise.
7. Adhere to government regulations.
As a commercial trucking business, there are many different government regulations you’ll need to follow, particularly when it comes to taxes. Most notably, if you’ll be driving in multiple states, you’ll need to comply with the International Fuel Tax Agreement (IFTA) by filing quarterly tax reports and placing an IFTA sticker on your trucks.
Additionally, you will need to install electronic logging devices in your vehicles. You and your drivers will need to understand labor laws for the trucking industry and how to log the hours you spend driving.
Starting a trucking business in the US gives you the freedom to manage your own shipping client base and pursue the jobs you want. To manage your trucking business effectively, you’ll need the right tools. Ready to streamline your operations? Check out Rose Rocket, the #1 rated TMS.