There is a lot to think about when starting your own trucking company.
First, do as much research as possible. Read everything you can, especially about trucking regulations and about the costs of starting and operating a trucking company. You’ll need to become familiar with the different requirements prescribed by the FMCSA. Then speak to someone with actual experience, if you can. If this isn’t possible, you can surf YouTube and find numerous owner operators discussing various trucking topics. You can also, call us (Trucking Partners). We’ve owned and operated trucking companies in the past and can likely answer many questions you may have.
(If you’re new to trucking, you’ll need to set aside some time to review the FMCSA’s recent requirement to begin using electronic logging devices, aka ELDs).
Then choose a name. It’s better if it “sounds like” a company that provides trucking service. For example, John’s Trucking Service, LLC is more descriptive than John Doe, LLC.
Next, you’ll need to decide what legal form will your company operate as. In other words, will you operate as a sole proprietor or will you choose to create a separate entity (such as a LLC or corporation)? This decision will have both legal and tax implications. You should consider speaking with both an attorney and an accountant.
When you do form your trucking company, the following may be helpful:
- Entity Formation (LLC, Corporation) – Secretary of State
- SS4 for Employer Identification Number (EIN) – IRS
- USDOT & MC Numbers – Federal Motor Carrier Safety Administration (FMCSA)
- BOC 3 – Designation of Process Agents
- Unified Carrier Registration (UCR)
- IFTA Registration
- Form 2290 for Heavy Highway Vehicle Use Tax (HVUT) – IRS
You should be aware there are significant startup costs, for example:
- Vehicle Down Payment
- Insurance Down Payment
- Apportioned Plates (IRP)
- Heavy Vehicle Use Tax –
Prepare an operating budget. What are your ongoing costs?
- Fixed Costs – Occur whether your truck moves or not
- Truck payments, Insurance payments, load board subscriptions, office/yard rent
- Variable Costs – Vary in direct relation to the operation of your truck
- Fuel, payroll, maintenance/repairs, travel expenses (food and lodging)
What about cash flow? In trucking, cash is king. To ensure your cash comes in at least as quickly as it goes out (hopefully quicker), you may want to consider a factoring company. With factoring, you typically receive cash payments for your completed deliveries within 24 hours!
As you can see, there are many things to consider. Hopefully, you already have some experience as either an owner/operator or as a company driver. Any trucking related experience will be very helpful.
Feel free to call us at (256) 737-8788, if we can be of assistance in any way.