Truck Company

What One Needs to Start a Commercial Truck Company

While it may look easy to start a commercial truck company, this niche is clearly not for every entrepreneur. It takes a synergy of business skills coupled with technical know-how to make up a good business involving commercial trucking. It is a very lucrative business indeed but is also very volatile and highly competitive to begin with. You need to assess whether you have what it takes to start and grow a commercial trucking company. Knowing how to man a truck does not make one entrepreneurial enough. You need to be adept with running your fleet and getting it going the right direction.

Check out these pointers on what one needs to start a commercial truck company:

  • Determine the purpose for commercial trucking business. What goods do you intend to transport with your trucking business? You need to specify these details early on to know what the requirements and be able to meet those. There are governing laws and contracts that depend on specific purposes.
  • Meet the standard requirements for business legalities. There are different laws and rules depending on the state when starting a commercial trucking business. You would need to file for an International Registration Plan, IFTA Decal, Motor Carrier Authority, Federal DOT Number, Heavy Use Tax Form, and BOC-3. In addition, there are also legal requirements that must be complied with.
  • Get the proper equipment. This is one of the most expensive requirements necessary for manning a commercial trucking business. Know what you can afford and start from there. Your startup capital will dictate your discussion regarding this matter. You can either buy or lease your equipment. This depends on your financial situation though. It is advisable to purchase your own equipment if you can afford it because leasing or renting equipment could complicate things although it’s fairly cheaper than the latter. Weigh your options with your CPA like if you would want to consider semi truck financing and decide on what will optimize your business from day one, whether that be through a standard loan or factoring freight bills.
  • Get a load board. Most commercial trucking businesses use load boards at the startup phase; or while you are on their way to building a solid customer base. It would be tasking to make sales calls when pooling customers but it may be well worth it over the long haul. You can do contract bidding that can be done online so it is also best to build a virtual presence of your business online. You must know how to bid well enough to be competitive yet remain profitable.
  • Man your fleet from the ground up. You have to handle daily back-office operations primarily because this is critical to running your commercial trucking company. One of the most important aspects is managing cashflow especially when you do not have a large cash reserve for paying off drivers, repairs, and fuel needs. Shippers most often pay their bills in a matter of 30 or 60 days which could be a problem if you do not have enough cash available to run the business engines.

Freight factoring is one financing option that a lot of startup commercial trucking businesses are contemplating on especially when in need of more cash to ensure smooth business operations. Factoring plans most likely offer fuel advances too which gives you immediate funding for delivery needs and in taking on new loads.