In today’s world, it is becoming increasingly difficult to carve out a good living, especially if you lack education or immigrated to the United States. A professional career is out of reach for many.
Entrepreneurship is an exciting option, but it comes with numerous risks. On the other hand, it offers a stable, profitable and an opportunity to feel pride working for yourself. The trucking industry is a good entrepreneurial bubble to pop.
This vertical is mammoth. The trucking industry in the United States accounts for a whopping 5% of the gross domestic product and boasts over $726 billion in annual revenue. And that number is trending upward, as deliveries to manufacturing plants, businesses and households are skyrocketing. The boom in online shopping before and especially after the pandemic has further skyrocketed demand.
The trucking industry does require some navigation. It can be tricky because the competition is intense. It also requires marketing moxie and paperwork like pursuing the right licensing. A trucking gig requires sacrifice and an upfront investment.
But do not let that deter you. Once you get up and running, you will be able to enjoy significant revenue and be your own boss.
A straight box truck, an emerging component to the trucking business, is also known as a cube van. It is not a cargo van as a straight box truck separates the freight from the front cab where the driver is. A straight box truck is a great business option because it circumvents a lot of protocol that the larger trucking businesses require.
Lighter duty Class 3 straight box trucks cost, on average, $35,000. Medium duty Class 4 straight box trucks go for, on average, $43,000. And medium duty Class 5 box trucks average about $58,000. It is important to note the salary generated by a box owner in context with his or her truck investment: straight box owner operators generate an average salary of $110,000 or $53 an hour. Over time, that truck investment will be nominal. Having your own trucking business is profitable!
One thing to know about the straight box truck business is that if you were to join the fray and start a trucking company, you would be behind the trend. Those that had the foresight to enter the market at its inception have established a “first to market” brand and a customer base if they are “best in market”. “First in” and “Best in” are two long standing principles for success in any industry. The way in which you thwart that kind of competition is to create your own lane, differentiating your service from others. Do your research as to what you market lacks in regards to consumer demand. In other words, if your small town already has a dozen perishable food delivery trucks, all with established routes and customers, that probably is a saturated market where your penetration will be a task.
Here are six vital steps on starting a Straight Truck Business:
- Once you’ve drafted a business plan and organized your preparation, establish and receive your LLC (Limited Liability Company). This is the first important step as you are incorporating your company. The benefit of such is that the LLC limits personal liability because it is separate from the owners. Personal assets such as your home and bank account are protected against debt collectors and lawsuits.
- Get your EIN (Employee Identification Number). Also known as a Federal Tax Identification number, it is used to identify your business. You will have that number for the life of your business. Don’t be fooled with internet services that want to charge you for it. Get yours for free at IRS.gov HERE. From there, open up a business bank account with either your long standing, trustworthy bank or a credit union that works well on behalf of small business professionals.
- DOT your truck if you will be using the interstate and carrying hazardous materials or being compensated by 9 – 15 passengers (including the driver). Additionally, you need a DOT if your truck is over 10,000 pounds. The cost is $300 and can be acquired HERE. You’ll need a commercial driver’s license as well as make sure not to skip any of these steps for your trucking company to be successful.
- Apply for your United Carrier Registration (UCR). It informs the government as to how many trucks you are operating in your trucking company. It is necessary for any truck carrying cargo over state lines. If you have a Taco truck company in Texas, you likely won’t need one. However, it is smart to register your truck if the possibility exists. It is attainable at UCR.gov and the cost varies by state.
- Once you have your straight box trucking company insured, apply for a BOC3 which files your insurance with the government. More straight box trucks are cruising the roads without insurance. The results of detection include driver suspensions or revocation. This also doesn’t bode well for your company’s efficient delivery. It also can be costly to your company’s name and create problems with both existing and past customers.
- Part of your business plan should be to understand the variations in gas prices. This affects your bottom line differentially every month. Research the international registration plan and the international fuel tax agreement
- To start a trucking company, you may consider getting an ELD (Elite Logging Device) that records important data on truck status and movement. It records engine running time and hours of service that goes directly to your software. Basically, it records record maintenance for both you and governing bodies (per state). A Garmin ELD runs for about $100 on Amazon.
- Head to Amazon. They have increasing needs for delivery drivers and they won’t discriminate against lack of experience. If your trucking company has the credentials above, and a clean driving record, make Amazon your first customer. From there, seek out opportunities that are not being capitalized by other straight box truck drivers. Carve a niche amongst the other trucking companies as the exclusive carrier of some specific cargo. That way, when it comes to shipping that product, your business is “top of mind.”
- Subcontract your truck to other reliable drivers who will work for you at a low wage, thus, freeing up your time to go after customers, manage your trucking company and look into purchasing another truck. That way, you can drive one truck while your reliable employee drives another. Scale the business accordingly. Just make sure you hire the right drivers that will take good care of the cargo.
Start a trucking company with a strong business plan, attention to detail and a ton of gumption. If you carve out a niche and work hard, you will leave the other trucking companies in your rear view mirror!