Are you dreaming of starting your own trucking company?
The option is lucrative but make sure you start with proper planning.
Trucking services are in high demand in North America. Trucks move approximately 70% of the goods between Canada and the US. Trucking is $800 billion industry in the US and $70 billion industry in Canada and is growing rapidly. According to an estimate every 2.5 seconds, a truck crosses the US-Canada border. You must prepare to take up the challenges of starting your trucking company and plan strategically to build a stable and sustainable business. Focus on the finest details to build a fail-safe business.
We have put together a comprehensive guide on how to start your own successful trucking company. This will help you build a successful trucking business and grow it.
The most important factor in the growth of a business is the demand for the offering. The trucking industry is a major revenue contributor in the Canadian and US economy. As per research, the demand for skilled workers in the industry is high and it will rise by 31% by 2030, as compared to 2010. Though a lot changed since COVID-19 pandemic and the economy is not in great shape right now. However, the rising demand for consumer goods, grocery, and sanitation products has opened up fresh opportunities. You can start a profitable trucking company as an owner-operator, with a couple of trucks, and grow it with proper business planning.
Trucking industry is highly fragmented and there is a lot of competition with several small players in the business. Approximately 90% of the companies in the US have 6 or less than 6 trucks and limited manpower. As a new entrant, you need to concentrate on business planning so you can start off on the right foot. Experts at Truckadium offer professional consulting services to help you plan and build a sustainable trucking business.
The most important requirement for starting your company is having business acumen and capital flow. In case you need help, then you can reach out to companies that specialize in business consulting and funding. They help you understand the important milestones and guide you through the process.
Like every other business you have to build your path to success on your own — but here are a few details that you must focus on.
1. Understand the industry: In-depth knowledge of the trucking industry will help you plan your business. You must understand your customer’s demand and the need for the type of services you wish to offer. This will help you make an efficient business plan and devise an effective growth strategy. If you have hands-on experience working in the industry, then it might be easier for you. If not, then you will need to research the industry to find out the best niche for your work.
Some of the questions below can help you take important decisions before you start your own trucking company
Do you want to do short haul or long haul?
Where to operate? Within Canada, within US or cross border?
Which lanes will be cost-effective? Identify the supply and demand for different lanes. Also, look for freight rates for your preferred lanes.
Which trailers would you need to serve your niche? Dry Van, Reefer, Flat Bed, Step Deck, or any other trailer type.
What would be the size of your fleet? Most people start with one or two trucks and then eventually grow into a big fleet.
What are the authorities and permits you need to start your own trucking company?
How to do detailed operational cost calculations?
How to maximize your freight rates?
What are the insurance requirements for a new trucking company? This could be one of the biggest roadblocks in some Canadian provinces like Ontario. The insurance requirements are very stringent and you must carefully check if you are eligible to get a competitive insurance quote.
How will you find loads if you start as a new trucking company?
How will you manage cash flow? Would you want to start by using factoring services to get paid quickly?
How will you hire and manage staff especially new truck drivers to grow your fleet? Answering these questions will take time and effort, but it will help you prepare a layout for your business.
2. Make a Business Plan: Prepare a strategic plan that works as a guide to managing your business. You can note all the important aspects of your business such as the type of registration, the structure of your company, and the description of services. This planning will also help you figure out your strengths, weaknesses, financial requirements, and other compliance aspects.
A comprehensive business plan comes in handy when applying for a loan, so make sure you pay attention to detail. It must include budgeting details, financial projections, cost calculations, payment terms, and expansion plans if any.
You can also take the help of professional business consulting services and leverage the experience of industry experts to speed up your business start-up process.
3. Work out the finances: Managing operational costs is important as it helps you your financial success. You must calculate the cash flow needed to support your business and the freight rates for the lanes you wish to operate in. You must also take into account the cost of operations, including all fixed and variable costs. You will have to decide whether to buy or lease the transport equipment and account for the associated costs of maintaining it. Performing these financial calculations will help you when applying for a loan and insurance. In case you plan to avoid bank loans and still ensure better cash flow for your new trucking business, factoring services are a suitable option. You should do a detailed operational cost calculations to arrive at a per mile cost for running your trucking operations if you are planning to do long haul. If you plan to run local, calculations will be little different.
4. Get the required authorities and permits: Depending upon your business plan you would need to apply for the relevant authorities and permits. If you plan to operate only within Canada, then you must get permits for the provinces where you want to operate. For operating in the U.S., you will need to apply for a Motor Carrier (MC) Number and USDOT Number with the FMCSA. There are some other permits you might need depending on the kind of cargo you are planning to haul. You must also apply for safety and compliance-related certifications to establish your company as a trusted carrier and speed up cross border deliveries. You can take help from professional services offered by industry experts to get all required authorities and permits. They help you understand and apply for the relevant authorities and permits. The consultants handle most of the paperwork so you can focus on other aspects of your business in the meantime.
5. How to find loads?: As new company finding profitable loads can be another big challenge. If you are a Canada based company you can start by subscribing to Loadlink which has the largest network of trucks and loads in Canada. On Loadlink you can find both Canadian and cross border freight. You can also build long term business relationship with Freight Brokers you will connect on Loadlink. If you are a US based company DAT can be the go to load board which offers one of the largest network of trucks and loads. If you want to eventually grow your business you should also look at hiring seasoned sales and business development professionals who can reach out to shippers directly and get your company regular work on some dedicated lanes.
6. Hire the best talent: Your trucking business will need a team of dedicated professionals who can flawlessly handle the various operations. You will need truck drivers, salespersons, truck dispatchers, and other back-office staff. You may also handle one or more of these roles on your own to cut down costs. But you must hire well-trained professionals for various roles like maintaining books, finding loads, and dealing with customers. Make sure your staff is proficient in handling computer systems and have strong relationship building skills. Hiring qualified truck drivers is one of the biggest challenges the trucking industry in North America is facing today. The work experience requirement for truck drivers is stringent for new trucking companies. You must concentrate on sourcing and hiring qualified drivers to deliver quality services consistently and grow your trucking business.
7. Embrace technology: Technology plays a very important role in growing and scaling any business. Right type of technology tools can reduce cost and effort and increase productivity and efficiency. COVID-19 changed the entire landscape and all companies are moving towards a complete digital transformation. Whether it’s a professional looking website to increase your online presence or using a good Truck Dispatch software to manage your trucking operations, technology will play a very critical role in helping you scale your business. Even if you have just started your company you should have a website for your company which your customers can easily find when they search online. Truckadium offers state of the art technology solutions which includes website design and development, custom software development, mobile app development and digital marketing.
8. Enroll into a training course: First step to start a successful trucking company can be to enroll into a training course which can offer you real world training about trucking industry and how to start your own successful trucking business. Truckadium offers very hands-on and practical Truck Dispatch Training Course which can help you get started off on the right foot. Our training course covers all the above points in detail and much more.
Strategic planning and effective implementation are key to start a successful trucking business. We have listed down all important things you must keep in mind before you start. You need to focus on volumes and productivity to increase the efficiency of your operations. Keep costs under check to maximize profitability and scale your business gradually. Offer great customer service to build long lasting relations that will take your business a long way ahead of your competitors.
For detailed consultation and help to start your own successful trucking company, contact the experts at Truckadium today.