Costs Involved In Starting A Truck Business

starting-a-truck-businessIn today’s economy, while many aspects of daily life are getting consumed by the Internet, the need to move products from one location to another remains. Trucking companies tackle the logistics of getting those trucks to and from their destinations, including the distributor or shipping location to the final recipient. This can be a lucrative industry, but as with any industry, the startup costs need to be carefully calculated to ensure accurate financing. If you are considering starting a truck business, here are some costs you will need to cover:

 

  1. Purchasing the Trucks

The trucks themselves are one of your biggest expenses. Determine how much horsepower and hauling capacity you will need, and how many trucks you will need to have in your fleet, then price the trucks to determine the cost. If startup money is tight, don’t neglect purchasing new trucks — the extended warranty available with a new truck is invaluable because of the truck’s increased lifespan. If you do need to buy used, avoid anything over 10 years old to lessen the risk of costly repairs.

 

  1. Administrative Needs

Administrative costs include all of the expenses needed to run the business. These might include:

  • Business registration fees
  • Local business permits
  • DOT licensure
  • Office supplies
  • Computer equipment

Check with both the Federal DOT website and your state transportation department to ensure you have all of the correct licensure in place before starting your business.

 

  1. Fleet Management Program

While it could be considered an administrative cost, fleet management programming is so vital to the overall job of running a trucking business that it deserves its own mention. Your fleet management program or telematics system will give you insight into how well your trucks are performing, how safe your employees are driving, where you can limit fuel consumption and how to best route drivers to their next location. These systems use GPS technology to keep you in touch with your trucks and drivers. The price varies tremendously, so take time to find one that is a good fit for your needs and budget.

 

  1. Insurance

Commercial trucking companies need the right insurance to protect their investment, their drivers and other vehicles on the road with them. You will need to discuss your insurance responsibilities with a local insurance agent. Make sure you have coverage for your business as a commercial enterprise as well as the automotive insurance required by the trucking industry.

 

  1. Marketing Costs to Build Your Client Base

Having the right equipment and facilities is just the start to a successful trucking business. This industry is quite competitive, and you will need a game plan to market to your respective clientele and land the right contracts. Be sure to allot costs for flyers, business cards and a website, as well as the costs to put your name on your trucks and trailers and any signage at your facility. If cash isn’t available to market yourself, there are invoice factoring companies for truckers that can free up funds.

 

  1. The Facility Purchase or Rental

Your facility, whether you rent or buy, will be another major cost for your business. Not only do you need a facility to securely store your trucks when they are not in use, but you will need to have an office facility as well — at the same location or nearby. As you shop for a facility, make sure you consider the security features you will need, such as gated parking areas for your trucks or a covered, locked garage for storage.

 

  1. Driver Hiring Expenses

The final piece of the trucking business puzzle will be the drivers who drive the trucks that you disperse. You will need money to pay them, advertise openings, cover benefits packages and ensure proper insurance for the fleet drivers you hire.

The expenses for a trucking business can add up quickly, so it’s important to calculate all costs before seeking financing. With the right estimates in hand, you will be able to seek the financing you need for a solid start to your business.

 

Robert J. Hall is president of Track Your Truck, a leader in fleet management using GPS vehicle tracking systems and software for small and mid-sized companies.

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About Dequiana Jackson

Dequiana Jackson, CEO of Inspired Marketing, Inc., is a small business marketing coach who shows women entrepreneurs how to use solid marketing strategies to turn their life’s passion into a profitable, service-based business. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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10 comments

  1. Very informative post! It is important that you know everything that you need before you start a trucking business. The investment you need will be a bit big. But if you can handle it right and you have knowledge with the industry, the return will definitely satisfy you.

  2. Starting a trucking business will surely need a huge amount of money. The costs will never be that simple. But following these tips will give you the right idea on how to start a company in the trucking industry.
    A-1 Freight System´s last blog post ..Growth and Retention Strategies

  3. My neighbor owns a trucking business, and my husband has thought a lot about starting one of his own after seeing how successful the guy is with it. I really like this list of starting costs because I don’t think my husband has considered everything, like all the administrative needs. I’ll have to send him this list and talk about it with him to make sure he knows what he’s getting into. Thanks!

    • I’m glad you enjoyed the post, Veronica. there are many costs involved that people don’t think about. It’s great you’re able to share this with your husband so that he can be prepared for them.

  4. Thanks for your article about the costs involved in starting a trucking company, Dequiana. Many people don’t understand the logistical complications that can be involved in running a trucking company. You make a great point about how having a good fleet management program in place is essential to keeping all of your equipment running and prevent delays. Thanks for your informative article. Many people in the US can take the trucking and shipping industry for granted.

    • I’m glad you enjoyed the article. And yes, we all see the trucks going back and forth but don’t always think about the business behind them. It takes a lot of coordination to get a fleet from Point A to Point B on time and without incident.

  5. Determining how much horsepower and hauling capacity you need are important concerns. Choosing the appropriate amount of trucks is also important.

  6. Great tips. You really have to consider a lot of things in hiring a contractor. It is really important.
    commercial construction Winton´s last blog post ..Amazing commercial fitouts from around the world

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