As many of you may already know I am fresh out of the corporate world and brand new to the business owner arena. You may be asking yourself why did I decide to start a trucking business?
For starters, I was fed up with my 9 to 5, I couldn’t wait to be my own boss! And not only did I have the advantage that my brother/business partner had many years of truck driving experience but he knew very well he needed a partner in crime. I have a natural born talent of figuring things out as I go. My brother saw the potential of teaming up and we went for it.
I am truly enjoying having my own trucking business, but it took a lot of work!
4 Steps to Start a Trucking Business:
STEP 1| Get the proper equipment to get started.
According to one of many statistics calculated and tracked by American Trucking Associations’, trucks move roughly 70% of the nation’s freight by weight. However, different types of freight require different equipment.
- If you’ll be transporting food, you may require a refrigerated truck
- If your freight is oversized, you may require a flatbed truck
- Or, if you decide to transport dry good (like we are), you will need a dry van truck.
Purchasing a lemon for a truck, was one of the many challenges faced early in my journey. A very expensive lesson from it was to never purchase our equipment without having a mechanic present to inspect it prior to closing the sale. Paying a few extra hundred bucks for the mechanic would of saved us thousands!
STEP 2| Get a CPA accountant.
Starting a trucking company is A LOT of paper work. There are braver souls than me who have dared and succeeded on doing the paper work themselves. We on the other hand was like hell no, let’s call in a professional! So, we did.
In the process of finding a professional I learned that there are different types of accountants (who knew?!). The one we needed was a CPA accountant specialized in transportation.
The paper work she submitted for us included:
- Registering business name
- Applying for an Employee Identification Number (EIN)
- Form W-9 (Request for Taxpayer Identification Number and Certification)
- Form 2552 (Election by a Small Business Corporation)
- BOC-3 Filling
- Federal DOT Number and Motor Carrier Authority Number
- Heavy Use Tax Form (2290)
- International Registration Plan (IRP) Tag and
- International Fuel Tax Agreement (IFTA) Decal
If I could turn back the hands of time, I would still have had a CPA help us out. This is legit no joke and can get very confusing when your first starting out. However, if you or someone you know is interested in taking up the challenge, I would recommend visiting the Small Business Association website for more detailed information to help understand the requirements and how to file.
STEP 3| Get the proper insurance.
As of 2017, obtaining insurance for trucks working under a brand-new DOT number is more difficult than in the past. But not impossible. Knowing what insurance companies are providing coverage for new ventures will save you a ton of time. A good resource for truck insurance is OOIDA. Be prepared to provide the insurance company with the vehicle and driver information.
Insurance requirements for dry van trucks include:
- Cargo Liability
- Commercial Auto Liability
- Commercial General Liability
- Worker’s Compensation/Employer’s Liability
Something else I wish we were aware of was that you cannot apply for your Motor Carrier Authority Number (MC #) until you have insurance. It takes about two weeks to get the MC #. That means two extra weeks before you can put your truck(s) to work. This caught us off guard and was not something we were financial prepared for.
STEP 4| Open a Business Bank Account.
Opening a business bank account was easy but complex. There are so many perks to look out for. My recommendation would be to collect a business solution guide from each bank you’re interested in.
Documents required to open a business account with most banks include:
- Employer Identification Number (EIN) (or a Social Security number, if you are a sole proprietorship)
- Your business formation documents
- Ownership agreements
- Business license.
I personally enjoyed sitting face to face with a representative who explained things thoroughly. We even got free cash bags, that we really don’t need but they look cool. What I appreciate the most is that the representative takes the time to call me every couple of months to see how we are doing and continues to cheer us on.
I don’t claim to be an expert in the trucking business. Everything I learned about the trucking business was by trial and error, research or connecting with other truckers. The four tips I share in this post are things I wish someone laid out for me when I first got started. If sharing my knowledge and story simply encourages someone to start their own business, even if they don’t know anything about it, then I’ll be extremely happy. Have you ever started a business without the knowledge? Do you have questions or tips you want to share? Leave a comment below, I’d love to hear from you!