Can You Afford The Truckloads Of Money It Takes To Start A Trucking Business?
Every product you use, from the food you eat to the shampoo you use, is trucked in to distribution centers and stores. Trucking is one of the largest industries in the United States and employees millions of people. Estimates say that about 300,000 new trucking jobs will be added to the industry each year over the next several years. Can you run your own trucking business? What is involved?
First, you have to decide on the business route you want to take. You can start your trucking business and then hire drivers with their own trucks and equipment or you can buy a truck and work as an independent trucker. Either way, you'll need a lot of business skill to succeed. Here are some skills you'll need as an independent driver:
- Great driving skills and a spotless driving record
- Ability to sit for long periods of time
For owners and drivers alike, you need to be able to:
- Remember and follow numerous DOT regulations
You may have always dreamed of traveling across the country. The trucking business allows you to do that and more:
- Potential to earn big income
- Lots of opportunities for work (local, long distance, trucking products, gases, etc.)
- Freedom to travel
On the flip side, there are downsides associated with the trucking business:
- Long hours
- High costs of fuel, insurance, maintenance
- Extremely competitive field
- High start up costs
If you decide to become a trucking business owner and hire truckers, your costs will be cut because you won't need to purchase your own truck. But you will need the following:
- Office space
- Phones to keep in touch with your drivers
- Access to tow and repair services
As an independent trucker, you'll need:
- A truck
- Radio or cell phone
The list may seem small, but it can be very costly.
To own your own trucking business, you'll need a license to do business. Check with your state to find out which licenses are appropriate. You will also need liability insurance, IRP tags on tractors (International Registration Plan - for vehicles that travel throughout more than one district), IFTA (International Fuel Tax Agreement) permits, Department of Transportation numbers, and state registrations. You and/or your drivers also need to have commercial drivers licenses (CDL).
A good place to find information, support, and tips when you're a trucking business owner is to check out professional associations, like the following:
You may also want to check out the following sites for information on finding freight to haul and more:
The investment required to start a trucking business and hire subcontractors can vary from $10,000 to $50,000. If you are planning on becoming an independent trucker, a new tractor can cost from $70,000 to $120,000. If you need your own trailer, that is another $30,000 or more.
You can buy used trucks for much less, from $30,000 on. You will also need to pay insurance: the minimum liability required for trucks must be $750,000, so your premiums will be quite high. Another cost to keep in mind is user taxes. In 1997, commercial truckers paid about $28 billion to the government for federal and state highway user taxes. While this burden is spread out over more than a half million trucking businesses, it could still be a big bite out of your profits.
If you are passionate about starting a trucking business, you need to consider costs very carefully. It will be expensive to start and maintain a trucking company. You will always need to repair and maintain trucks, pay employees, pay for fuel, and more. If you are committed to doing it, though, it can provide great income and other benefits.
Important Point To Keep In Mind
See Also: How to Start A Business : Business Idea of The Day
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