Starting a successful logistics company takes planning and hard work--starting with the inevitable question, where do I start? We’ve provided some resources below to help you develop a plan for your trucking company.
Develop your financial plan. A good financial plan will increase your odds of success while reducing surprises. Starting and running a trucking company is expensive, so it’s important to understand what to expect. While your costs will vary, David McGill has an informative video outlining the costs to start a trucking company which is linked here. For a summary of David’s costs, please see the attached here. To develop your plan, start with a list of your expected one-time, annual and recurring expenses in a spreadsheet. There will be surprise expenses, so it is a good idea to include a reserve for unexpected startup costs (about 10-20%).
Develop your sales, business and revenue plan. Build a strong plan for your customers and revenue. This will improve your odds of success, however, it will take time, effort and consistency to achieve. To begin this process, connect with a direct shipper and create a professional and personable relationship. Once this is established, go the extra mile to keep them happy and dedicated to doing business with you.
Tax ID. File for a Federal Tax ID number. This is something you file independently and is easy to complete. In addition, it is important to note that you may need to file with your state’s Secretary to State to register your business (this is dependent on the state you are located in).
Registrations and Licenses. Businesses that provide motor carrier or brokerage services require Federal and State registrations and licenses. Most carriers need to file for: a DOT Number and an MC Number through the FMCSA Unified Registration System, a Heavy Vehicle Use Tax (HVUT) with the IRS, and Unified Carrier Registration (UCR) / IFTA. Before you can complete registration and start your operation, you will also need to meet insurance requirements. In addition, if you operate trucks with a Gross Vehicle Weight limit greater than 26,000 lbs, your drivers will also need to have a Commercial Drivers License (CDL). More information on trucking registrations and licenses is available here.
Connect with startup carriers. With over 800,000 registered trucking companies in the United States (and growing), this is a great opportunity to connect with other logistics professionals for advice and support.
Define your team and hiring plan. While many carriers start with the owner as the sole driver and employee, it is important to look forward to the future of your company’s internal growth. Before expanding your team, set up a transportation management system (TMS), such as FreightWeb’s Carrier Hub, to provide a structured and clear process for new employees.
Insure your business. Trucking companies naturally carry higher risks, considering transportation may involve accidents and possible property damage, from time to time. Work with an insurance professional to develop a plan to protect your company in the event that the unexpected does happen.
Set up your finances. While many companies start with a spreadsheet or notebook to track financial transactions, Quickbooks Online is a great and reliable solution to handle accounting for startups. Quickbooks is integrated with FreightWeb’s Carrier Hub to simplify your accounting. In addition, it is suggested that you set up a business bank account to keep your finances separate from your personal accounts.