Want to become a motor carrier but looking for advice on how to start your own trucking company? You’re in the right place! You may be interested in short-haul or OTR. Or sand and gravel sounds more appealing than oil and gas. Either way, you’ll need to get your bases covered before you hit the road.
Five steps to get started:
1. Obtain your commercial driver’s license (CDL)
2. Select a business structure
3. Consider business banking
4. Find the right insurance
5. Search load boards
Getting a commercial driver’s license
There are a handful of steps necessary to take when looking into obtaining your CDL. While requirements may vary by state, let’s cover the basics.
First, get your permit. This allows you to practice on public roads with a CDL holder with you in the cab. To obtain your commercial learners permit (CLP), simply study up for the type of driving you’d like to do, and take the test.
Next, you’ll want to complete your entry-level driver training. This is applicable for those applying for a Class A or B CDL.
After carrying your CPL for 14 days, you’re ready to take the CDL test. Before you do, you’ll want to have your vehicle purchased or leased already – because the first step is the vehicle inspection test. From there, you’ll take your controls test, and finally, the road test.
State governments issue the driver’s license, so make sure you check out your state’s CDL manual to learn about specific rules and requirements.
Selecting a business structure
There are four popular entities trucking companies typically select for their business:
- Sole proprietorships
If you opt to operate as a sole proprietor, this would eliminate the requirement to register your business. Otherwise, you would register with the state to obtain your FEIN, or Federal Employer Identification Number.
A popular entity small trucking companies and owner operators select for their business is an LLC, which stands for a limited liability corporation. It’s important to note that it’s much simpler to manage than a corporation if you are a small business.
Oftentimes you can expect to pay less than $300 to register for an FEIN.
Business Banking for Trucking Companies
If you’re choosing to operate as a sole proprietor, not having to register and saving a bit of money upfront may sound enticing at first, but there are risks that come with that because there would be no separation between your and your business. Technically, you would be the business entity.
Essentially, if you don’t set up a separate entity, your house, your car… everything will be a part of your “business”. So if something happens while working, your personal assets would be at stake. Setting up business banking is a great idea because it offers separation and protection. Not only that, it ends up helping with taxes, too.
If you have your FEIN, you’re eligible to set up a few different forms of business bank accounts:
- Savings account
- Checking account
- Credit card account
- Merchant services account
There are many factors to consider when choosing a bank – like fees, minimum balance requirements, mobile banking, and more.
Need some extra cash? Business bank accounts offer lines of credit.
Here’s an example of a business bank account for truckers.
Business insurance for truckers
You’re getting closer! You’ve got your license, your entity has been selected, and you just solidified your banking options. Next stop, trucking insurance.
Great policies for trucking companies include workers’ compensation, general liability, and commercial auto insurance.
Insurance benefits include coverage if you’re hurt on the job, protection against third-party bodily injury, property damage, accidents, and more. Because of this, you’ll definitely want to consider owner operator insurance.
Without the proper coverage, you would have to pay for damages out of pocket. Insurance will cover damages. Speaking of payments, check out this guide on trucker insurance costs.
Load boards for truckers
There are several freight finders you can utilize to help start and build your trucking business. With certain apps, you can find available, high paying routes. Load boards can be critical at the beginning stages for trucking companies, as they post available work for truck drivers – often in real-time. Additionally, you can post your truck type and its availability.
Outside of load boards, you may find goods to haul through brokers, freight factoring, becoming a government contractor, or simply networking with others.
You’ve got a green light
Now that you’ve got the five key steps down on launching your trucking company, you can put your pedal to the metal. But before you do, don’t forget to get squared away on your commercial insurance. With Pogo Insurance, we compare quotes from over 30 carriers to offer you the best coverage at the right price. Get a free estimate