If you’re an independent owner wanting to open your own business, US Trucking Service wants to help. One way we can do that is to review and explain the basic, essential steps you must take as a professional driver to become the owner of your own company.
The following is our summary of the process, broken down into eight steps, and we hope you find this information helpful.
Step 1 – A Business Plan
As a driver, you obviously know the importance of maps in reaching your destination. Your business plan is equally important. It is, in fact, a roadmap to your business destination – owning and operating a successful trucking company. Don’t think of starting this journey without that map.
In fact, if you’re going to need to borrow money to start your company, a business plan is absolutely essential. A well-written, well-formulated business plan is one of the first things a lending institution will ask for before agreeing to extend you a loan.
If you’re not sure how to begin writing a business plan, here’s a free template that will guide you through the process.
Step 2 – Legal Organization
To separate your personal assets from your business liabilities you will want to organize your company as either a corporation or a limited liability company (LLC). What’s the difference? Simply stated, a corporation is owned by multiple stockholders. An LLC is owned by one or more individuals, but not by a large body of stockholders.
Whatever your choice – corporation or LLC – you should do the following:
- Choose a registered agent – Taking this step is required in most states. The state government communicates with your company through your agent who must have a physical address, not a P.O. Box. The agent is responsible for receiving such things as tax statements and legal notices, among others, and must be accessible during regular business hours.Failure to receive and respond to the state’s legal notices and requirements could adversely affect your company, costing you significant amounts of money.
- Obtain an EIN – Your EIN is your employer identification number. Think of it as your company’s social security number. You must have an EIN to open a business banking account, and you must include the number on all tax documents.
Step 3 – Business Licenses and Permits
To operate a trucking business, you must have the proper licenses and permits required by state, county, and local entities.
Here are a number of the items you’ll need.
- Commercial driver’s license (CDL) – Federal law requires that commercial drivers have a CDL.
- USDOT number – This number is used by the Federal Motor Carrier Safety Administration (FMCSA) to identify companies when conducting investigations, inspections, and audits.
- Motor Carrier Operating Authority – For short, this is called your MC number, and depending on your operations, you may need more than one of these.
- BOC-3 filing – Your designated agent must file this form with the FMCSA, and it must include all the states in which agency designations are required. You must also retain a copy of this filing at your primary place of business.
- International Registration Plan (IRP) credentials and International Fuel Tax Agreement (IFTA) decal – If your company will operate across state lines, you must have IRP credentials and your trucks must have IFTA decals.
Step 4 – Equipment
No matter how many expert CDL drivers you have, your company may well succeed or fail based on the equipment choices you make. Do extensive research and consult with other company owners about equipment needs. Also, tap into your own memory bank of experiences – past successes you’ve had and mistakes you’ve made – before buying or leasing your equipment.
Step 5 – Insurance
Shop around and speak with several agents to secure your best possible rates. Your insurance should include liability, cargo, physical damage, and passenger accident coverage. Despite your best efforts to prevent them, accidents will happen, and you need to be protected!
Step 6 – Income and Expense Tracking
Maintaining accurate records of your income and expenses is another absolute essential for maintaining a successful trucking business. Consequently, you should:
- Either hire an accounting firm or maintain the most up-to-date accounting software for in-house accounting.
- Maintain complete records of all business expenses so that you can justify and prove these expenses for tax purposes.
- Have a thorough knowledge of payment for deliveries.
- Keep business and personal finances completely separate from each other.
Assistance is available here for organizing and tracking the financial side of your business.
Step 7 – Business Growth
Now that you’re an entrepreneur and not a truck driver for hire, you must take every opportunity to grow your business. You can’t afford to slack off here. You must market your trucking business, and ways to do that include attending trade shows, signing up on DAT load boards, and maintaining an easy-to-navigate website that explains your trucking services and provides contact information.
Step 8 – Compliance
Compliance, in its various forms, is another absolute essential. You must stay current with things like tax filings and multi-year CDL renewals to avoid severe penalties. Compliance also includes keeping up with corporate reporting requirements in your state. Failure in that area could possibly lead to the revocation of your corporate or LLC status, the last thing you want after all the hard work you’ve devoted to organizing your company.
US Trucking Service – Here to Help All in the Trucking Industry
If you’re a would-be entrepreneur on the verge of organizing your own trucking company, we hope you’ll find this information helpful. On the other hand, if you’re not ready to take that step, we’re also here to help job seeker owner-operators find loads with job alerts and assist companies recruiting reliable, long distance drivers, full time or part time, to deliver their merchandise.
Whatever your trucking needs, US Trucking Service is here for you.