If you want to know how to start a trucking business, chances are you want to work for yourself. Maybe you’re a trucker now and you want to get off the road and have steady income coming in. With more people in the U.S. ordering products online, the shipping and delivery industries are booming. The country relies on truckers to get products delivered on time. That’s why now is a good time to start your own trucking business. You can hire drivers, make more money, and even start saving for retirement (and a vacation).

Trucking is a profitable industry. Trucks deliver about 70% of products across the U.S. worth about $700 billion. This opens opportunities for driving revenue and profits to your trucking business, whether you’re an owner or owner-operator.

We’ve put together this checklist for starting a trucking business to help you succeed.

Step #1: Write a business plan.

A solid business plan is an essential step in any company. The Small Business Association (SBA) recommends your business plan should project 3-5 years ahead. It should also detail your plan to grow revenue.

A business plan typically includes:

• Executive Summary. A brief description of you, your company, and how you plan to achieve your goals.
• Company Description. More detail on you and your business, what sets you apart from other trucking companies, and how your trucking industry knowledge and experience will benefit your company.
• Operations. The technology, systems, and staffing you plan to deploy to operate efficiently.
• Services. A list of the service you will offer customers.
• Market Analysis. An analysis of the current marketplace and how your company will be able to generate revenue.
• Sales and Marketing. How you will attract and build a loyal base of customers.
• Financial Projections. A roadmap that explains how you will accomplish your revenue goals.

If you’re asking for financing or soliciting investors, you will also want to include a funding request.

Step #2: Get your commercial driver’s license.

Whether you’re an owner-operator or you hire drivers, you/they need a valid commercial driver’s license (CDL), as required by the Federal Motor Carrier Safety Administration (FMCSA).

Drivers age 21 and over can apply. Ages 18-20 can drive intrastate. Drivers submit a CDL application and pay application fees. They need proof of identity, U.S. residency, and a valid social security number. Drivers also have to pass vision and knowledge exams. After getting a commercial learner’s permit (CLP), they must pass a pre-trip inspection and road skills and driving exam (with their vehicles). After passing these tests, drivers pay the applicable fees and receive their CDL.

Step #3: Apply for your trucking authority.

One of the first steps in exploring how to start a trucking business is to complete your trucking authority. Trucking businesses need to have an operating authority when they work as a hire carrier over state lines for vehicles more than 10,000 gross vehicle weight (GVW).

To get started, create a unique business name and check online to make sure it’s available. Then file it with your state. Complete an application clickbet88 bola for your trucking authority with the FMCSA. File for your motor carrier number (MC#) for transporting interstate commerce.

Step #4: Select process agents.

The next step in starting a new trucking business is choosing a process agent. This is the person who can legally represent you when you file the court papers for your business. Your business needs process agents in every state that you travel, work, and operate in. This is a legal requirement by the FMCSA so don’t skip this important step.

Process agents are helpful in that they work on your behalf if you ever have a problem in another state. As noted in Step #2, your process agent completes your BOC-3 paperwork. To find available process agents, refer to the FMCSA’s site.

Step #5: Determine your business type.

When starting a trucking business, you’ll have to file taxes with the IRS. It’s essential to form the type of trucking business structure you want to establish. It might be a sole proprietorship, partnership, limited liability company (LLC), or corporation. They vary in type so speak to a tax accountant.

Some business owners file sole proprietorship as this is the cheapest and easiest when filing taxes. But if a person or business sues you as an owner or owner-operator, they can sue you personally versus if you have a corporation. In that case, they would sue your company and not you, protecting your personal assets.

Step #6: Open a business bank account.

Apply for a small business bank account and business credit card. It’s important to keep personal funds separate from company funds for tax planning and to help establish a good business credit score in case you need a business loan or funding in the future. You can start building your business credit right away by using your business account to apply for a business license, permits, and insurance as you start your trucking company.

Step #7: Know the legal requirements.

The trucking/transportation industry is a highly regulated industry. That means the FMCSA has several legal requirements for owner-operators.

• Apply for your U.S. Department of Transportation (DOT) number and your Federal Authority.
• File a BOC-3 and start a trucking insurance policy (primary liability, cargo).
• Get your International Fuel Tax Agreement stickers.
• Register for your UCR permit and International Registration Plan (IRP) and get apportioned plates.
• Obtain an Employment Identification Number (EIN) from the IRS, whether you’re filing as a sole proprietor, LLC, or corporation, to establish yourself as a business entity.
• Install FMCSA-compliant electronic logging devices in your vehicles (for non-exempt carriers).
• Obtain a Standard Carrier Alpha Code (SCAC) from the National Motor Freight Traffic Association (NMFTA).
• If your truck weighs more than 55,000 pounds, you are required to pay heavy highway vehicle use taxes using IRS tax form 2290.
• Get the required business licenses from your state and/or city.

Step #8: Get insured.

In 2018, large trucks accounted for 112,000 injury crashes and 4,862 fatal crashes. Transportation businesses need insurance to protect against losses (damages, injuries caused by commercial vehicles). Shop around for the best rates and refer to the FMCSA for business insurance filing requirements.

Trucking insurance might include:

• Commercial liability insurance: $750,000 in coverage. Some brokers require $1 million in coverage.
• Cargo insurance: $100,000 in coverage.
• Physical damage: This coverage protects in no-fault accidents.
• Non-trucking use: This is coverage for accidents if you’re hauling loads for another person or company.

Find additional information with the Owner-Operator Independent Drivers Association.

Step #9: Get financing.

When you start a new trucking business, you may need to get business loans or find investors to pay for startup costs. If you do apply for a business loan or seek investors, make sure you have completed all of the steps above.

Check with large and small banks and credit unions for financing. Credit unions can be easier to get a loan from, as larger banks want to see two years of operating history. You can also check online for trucking lenders.

And if you need to approach lenders, investors, or partners to finance your trucking business, the first thing many of them will want to see is your business plan. Here’s a look at how to create a trucking business plan.

Step #10: Get a truck and/or trailer.

Commercial truck financing terms vary depending on your credit. When you purchase your trucks, there are different types of leasing options available.

Types of leases:

• Operators: This is having the vehicle full-time and always in your possession. You pay for permits, taxes, and maintenance and turn in the vehicle when the lease ends.
• Lease-purchase: Lease-purchase is for drivers with less-than-perfect credit. They can finance trucks right away but may pay more in interest.
• Terminal Rental Adjustment Clause: For this, you pay a down payment up front. At the lease end, you can pay the balance for the vehicle. Or, let the leasing company sell the vehicle, and they might share part of the profit with you.

Step #11: Subscribe to a load board.

Subscribing to a load board is the best way to keep your trucks full and on the road. They can help connect you with shippers, brokers, and find loads.

Load searching gives you unlimited access to jobs in every state where you work. Access rates, load weights, and distances all in one glance. Use the Book It Now feature, and in a few clicks, view new available loads and click on the ones you want to book.