How to Start a Trucking Business in 2021: The Complete Guide

Choose your trucking business model

The experts at CDL Life (the largest online community of truck drivers in the U.S.) outline these five types of trucking business models:

1. For-hire truckload carriers

For-hire truckload carriers haul other companies’ freight.  

There’s a good chance that this may be the business model you had in mind when thinking about starting a trucking business. But, make sure to consider it from all angles (and your other options) before committing.

Even within this fairly straightforward business model, there are a lot of variables to be decided.

What kind of freight will you haul? Will you need special equipment to haul it? Will you operate locally, regionally, or nationally? Will your drivers be contractors or employees?

2. Private fleets

Private fleets provide their own trucks, trailers, and drivers, as well as the products they haul. Thus, they’re a one-stop shop for both the items being shipped and the transportation of those items.

If you plan to start a trucking company, this probably isn’t the model you had in mind.

But, if you plan to manufacture an exciting, in-demand product and have a known audience who is reliably waiting for it… then you may want to consider starting a private fleet.

3. Less-than-truckload carriers

Less-than-truckload (or LTL) carriers haul items that comprise less than a full truckload. This means that you may carry smaller quantities of items from several different sources on a single trip.

Travis Overton of CDL Life explains:

 One less than truckload trailer might be shipping 10-30 different products to all different customers.

LTL carriers can operate regionally, locally, or nationally. 

4. Household movers

Household moving companies do just what it sounds like – they help people move.

This business model is generally a hybrid of transportation, manual labor (loading and unloading the truck), and possibly even helping clients pack their belongings.

It’s up to you to decide whether you want to offer packing services as well as loading/unloading and driving. And, you’ll also have to choose if you’ll be a local, regional, national, or global moving company and plan your licensing, permits, and infrastructure accordingly.

5. Inter-modal trucking

Inter-modal trucking companies deliver shipping containers to and from the rail yard or shipping port. This keeps these companies localized in one region while helping to deliver goods all over the world.

If you’re located near a major train hub or cargo port, then this may be a good trucking business model for you. But, if train activity is scarce in your area and you’re landlocked, consider another option.

Once you know your trucking business model, you’re ready to move on to the next step – writing a business plan.

People often make mistakes when they start a trucking company. This is because they rush into things before considering their business from all angles.

Writing a business plan isn’t mandatory. But, it can help you think things through and avoid many mistakes.

Studies show that entrepreneurs who take the time to write a business plan when starting a business are 2.5 times more likely to follow through and get their business off the ground.

The work that goes into creating a business plan helps new owner-operators build skills (like analyzing their competition and examining their finances) that will be important to their success.

But, don’t get obsessed about getting every detail right in your business plan. You don’t even need to write a traditional 100-page business plan. Instead, do your research and create a one-page business plan.

For insights and free downloadable business plan templates, read this definitive guide to writing a business plan.

The trucking industry is overseen by the Department of Transportation (DOT) and the Federal Motor Carrier Safety Administration (FMCSA). These government agencies take their rules and regulations seriously – and they expect trucking companies to do so as well.

That’s why an attorney specializing in transportation safety compliance will be so valuable to your business.

They can advise you on best practices as you establish your trucking company. And, they’ll understand the legal details if you should ever find yourself in trouble with the DOT or FMCSA.

A good lawyer will help you find the proper business structure for the business – and split ownership interests with partners or investors – in ways that will protect everyone and give you flexibility in the future.

There are many different types of legal business structures for various business entities.

(Note: These legal business structures are different than your trucking business model.)

For new trucking owner-operators, choosing the best business entity for your business can feel overwhelming. So don’t rush yourself into deciding to register your business immediately.

For example, while a sole proprietorship or partnership might be quick and inexpensive in the short term, it might expose you to more risk, create an unfavorable tax treatment, and create problems for you in the long term.

A limited liability company (LLC) might make more sense for many trucking companies and a corporation could make sense for bigger trucking companies, especially if they have investors.

Spend some time reading about each possible entity your business might fit into. Then, consider which business structure is most helpful for your business; and how each business structure can help you accomplish your personal and business goals.

You’ll also need to designate a process agent to whom court and other real papers can be served. You’ll need a process agent in each state where you have an officer, operate your company, or establish contracts with customers.

And, remember that most states require you to register your trucking company with the secretary of state or county clerk in the county in which you operate if you run your business under a different trade name than your legal business name.

This is an easy problem to solve. Just register your actual trade name with your state (and/or local government) by filing a “doing business as” (DBA) certificate. DBAs are also commonly called “assumed name,” “fictitious business name,” or “trade name.”

Here’s a terrific resource that explains what a DBA is, the DBA state requirements, and how to file a DBA for your trucking company in all 50 states and U.S. territories.

Business accounting is how your business records, organizes, interprets, and presents its financial information.

• Accountants analyze the financial condition of a business and offer financial advice to help the business owner make better decisions.
• Bookkeeping is the recording, organization, storage, and retrieval of financial information related to your business.

Accounting and bookkeeping do overlap. The main difference between the two is that bookkeeping is how you record and categorize financial information, whereas accounting puts the information to use through analysis, strategy, and tax planning.

Typically, bookkeepers record and organize your day-to-day business transactions, keep your business bank account balanced, produce simple reports, and assist with keeping your financial records in order.

While a bookkeeper can handle most of your day-to-day number crunching and record-keeping, it’s still important to have an accountant.

Filing state and federal taxes can be complicated. And, you don’t want to get caught in a situation where you’ve underpaid or violated any tax laws.

This is where an accountant will shine. Hire an accountant to advise you on taxes before officially starting your trucking company. It’s important to know how to plan for taxes from day one.

And, an accountant can also help you analyze your finances to help you understand if you need additional financing to get your trucking business up and running.

When you start a trucking company, it’s essential to know exactly how much money you have to invest into the project.

Purchasing or leasing trucks and trailers, drivers’ wages, and trucking insurance payments… it all costs money.

You’ve got to know if you have enough. Then, you may need help with your business financing. Luckily, there are many business financing options for small businesses.

If you don’t understand the numbers, you’ll have a tough time building a sustainable, profitable business. Most of your strategic decisions will be impacted by your cash flow.

And be extra careful to conserve your funds when starting a business. Don’t overspend.

Some purchases will be necessary and will make sense for your business, but others, like expensive and unnecessary equipment, will threaten your trucking company’s chances for survival.

To keep track of your finances, you’ll need to set up a bookkeeping and accounting system. We talked about this above. This is important so that you understand your business’s cash flow and will also be necessary for tax-filing purposes. 

It’s hard to build a successful trucking company unless you take branding seriously.

Branding provides a reassuring level of professionalism that small business trucking operations sometimes struggle to establish. So, don’t think you can afford to leave your brand identity to chance. 

WHICH LOGO IS BEST?

Your brand’s importance cannot be understated. Businesses trust trucking companies with thousands (and sometimes hundreds of thousands) of dollars in product. Weak brand identity will undermine their trust and make them reluctant to hire you.

So, before you hit up your first networking event, ask yourself these critical questions:

• What identity/personality do I want my trucking brand to project?
• Who will want or need my services?
• What can my clients get from my services that they can’t get from other trucking companies?
• What values guide the way that I do business?
• What is the most important part of my clients’ experience?

Your answers to these questions (and others like them) will build the core of your brand.

All of your future branding decisions should expand on these ideas. For example, your company name, company logo, and website design should grow from the concepts you laid out here.

So, take the time to think – really think – about your brand from the start. Trucking is a competitive industry. And, it’s the trucking companies with clear, authentic brands that survive and thrive.

Important branding elements for a trucking company include:

• A unique and distinctive company logo that is easily recognizable from a distance (so potential customers can recognize your trucks on the road)
• Truck wraps or decals that include your brand name and logo (so potential customers can recognize your trucks on the road)
• A custom email address and web domain that matches your business name (because people think less of businesses that use Gmail or Yahoo email addresses)
• A professional-looking website that provides possible clients with all of the information they need to decide if your trucking company is the right fit for their needs
• Business cards that can be passed to potential clients in your region of business operations

And if you’ve already started your trucking company, but are struggling to grow it, maybe it’s time to consider a rebrand. It’s possible that your existing branding is holding you back more than you realize.

The cost of brand design

Before you decide that you should put off building a strong brand identity because your budget is tight, rethink that plan.

You don’t have to spend thousands of dollars on building a strong brand identity. Here are a few pricing guides that can help you identify the sweet spot for pricing:

The above guides describe free, cheap, affordable, and expensive options. So, you’ll find a price point that will fit your budget, regardless of the size of your budget.

You can learn more about the nuts and bolts of establishing and maintaining a consistent brand identity in Grow Your Small Business with Consistent Branding.

Your new trucking company is being born into a framework of laws, licenses, and permits that already exist. 

While it’s easy to get caught up in the excitement of becoming your own boss, it’s essential to give equal attention to the less glamorous aspect of business ownership – following the rules.

If you don’t operate legally, your new trucking business may get shut down before it has a chance to grow. So, let’s talk details.

After you determine your business’s legal structure, you’ll need to file the necessary paperwork.

The U.S. Small Business Administration tells us that some form of license or permit is necessary for virtually every business type. Their website has all of the info you need to find out what sort of license or permit you’ll need to start a trucking company in your state.

In addition to any basic business licenses or permits you may need to operate in your state legally, you will also need some licenses and permits specific to the trucking industry.

Trucking-specific permits and licenses

Many states require special permits and other specific licenses or paperwork. So, check out your state’s Department of Transportation website for the details in your state. But, some requirements are fairly universal.

You can expect to complete the following:

1. Obtain a commercial drivers license (CDL) if you don’t already have one. Visit your state’s Department of Transportation, Motor Vehicle Administration, or Department of Motor Vehicles for the CDL guidelines specific to your state.
2. Register with the FMCSA (Federal Motor Carrier Safety Administration) to obtain your U.S. DOT number and your MC (motor carrier) number. The MC number is also known as a motor carrier operating authority, trucking authority, or carrier authority. Having carrier authority means the government permits your trucking company to be paid for hauling freight for your customers and dictates the type of cargo you can carry.
3. Once your business is insured and you’ve acquired your U.S. DOT and MC numbers, complete your Unified Carrier Registration (UCR). This verifies your active business insurance coverage.
4. If you plan to operate in more than one state, obtain your International Registration Plan (IRP) tag. The international registration plan distributes registration fees based on the actual distance traveled in each state or Canadian province. You can get the IRP from your state’s transportation website.
5. Get your International Fuel Tax Agreement (IFTA) decal through your state DOT if you’ll be hauling loads in more than one state. The International Fuel Tax Agreement is required if you’re doing interstate trucking. The IFTA is an agreement between the continental 48 U.S. states and Canadian provinces to simplify reporting of fuel use by carriers that drive in multiple states. Carriers must submit a quarterly fuel tax report and a quarterly tax payment, which is distributed to the states.
6. Consider the Heavy Vehicle Use Tax – This tax is charged for trucks exceeding 55,000 pounds. The proceeds fund highway programs.
7. If you plan to operate in more than one state, file your BOC-3 form to ensure that you have legal coverage everywhere you go. The form designates a process agent in each state where a carrier maintains an office or establishes contracts. In addition, some companies offer blanket coverage that designates a registered agent in every U.S. state, making this process simple.
8. Drug Testing and FMCSA Clearinghouse. You’ll want to set up a drug-testing program, and be sure you check the FMCSA Clearinghouse for CDL driver drug and alcohol program violations.

This list is not exhaustive. You may need to complete other paperwork as well. 

Bookmark the FMCSA website and your state Department of Transportation website. These will be your go-to resources for the licenses and permits you will need to obtain to start a trucking business in your location.

Insurance for trucking companies

Every truck in your fleet will need to be covered by commercial auto insurance.

But that’s only the start.

There are many different types of business insurance that you may need (or want) to carry to protect your trucking business.

• Cargo insurance protects your business from loss if cargo is lost or damaged while in transit.
• General liability coverage protects your business if a person or property is damaged due to a crash or load delivery errors.
• Bobtail ( or non-trucking liability) insurance covers your drivers when driving between gigs (off-dispatch) or using the truck for personal reasons.

There’s also physical damage coverage, medical payment coverage, trailer interchange coverage, and more.

In most cases, you must carry at least $750,000 in primary liability coverage. This covers damages or injuries that result from an accident when you’re at fault. But many brokers and carriers require higher minimums, starting at $1 million in liability coverage.

You’ll also need at least $100,000 in cargo coverage, which covers damage to the freight and theft. The amount of cargo coverage depends on what you’re hauling. 

Research the insurance options and requirements for your state. And protect your business by investing in the strongest coverage you can reasonably afford. 

Getting to know all of the necessary legal and logistical considerations of starting a trucking business will create a strong foundation for your trucking business’s successful future. 

For a trucking business, you’ll want to track revenue, but there’s so much more to think about. So you’ve got to start at the beginning –  with your start-up costs.

Start up expenses and costs for a trucking business may include:

• brand design (logo, business cards, and website)
• any license or permit fees
• vehicle insurance
• deposits and rent for a physical work location (Will you have a terminal for storing a fleet when they’re not on the road? Where will your office be located?)
• basic infrastructural costs like phone and internet service, scheduling, invoicing, and dispatch software, etc.
• marketing and advertising costs
• initial legal and accounting services.
• equipment (trucks, trailers, securement straps, chains, tarps, etc.)

When looking at trucks and trailers, leases can help you get more for your money. Here are three common types of leases:

• Operating (Full-Service) Lease. Under the Full-Service Lease, you must take care of maintenance, taxes, and permits. When the lease ends, you simply walk away and don’t owe any additional payments.
• Terminal Rental Adjustment Clause (TRAC) Lease. Under a TRAC lease, you must make a small down payment and then make regular lease payments. When the lease ends, you pay the difference in value and purchase the truck. You can also ask the leasing company to sell the truck. If the leasing company makes money on the sale, you get the profit from the sale. However, if the leasing company loses money on the sale of the truck, you owe the difference between the sale price and the purchase value of the truck in your TRAC lease.
• Lease-Purchase Plans. These are designed for truckers who don’t have enough funds for a down payment to buy a truck outright or for those with bad credit. These plans are costly, and you do pay more over the course of the lease-purchase agreement when compared to traditional purchase financing. But, this is a good alternative for those who cannot take advantage of traditional financing. 

Once you know how much it will cost to get started, compare it with your actual funds. Then plan how you’ll make up any difference. 

Then it’s time to consider what your recurring costs will be.

Recurring costs for a trucking business may include:

• fuel (diesel)
• vehicle maintenance and repair
• utilities (phone, internet, electricity, etc.)
• office rent
• software subscription costs (bookkeeping and dispatch)
• license and permit renewals
• bookkeeping, accounting, and legal services
• employee wages
• annual taxes

Researching ahead and running smart calculations to determine how much it will cost to start and run your business will allow you to plan and think about pricing.

Setting your prices

Setting prices isn’t a simple matter. You should keep several factors in mind when setting your prices.

The hard numbers

To create a competitive pricing structure, you have to start by knowing how much it costs you to run your trucking business (your recurring operating costs).

While there may always be unexpected expenses, the recurring costs you know should all be considered.

But, your operating costs are only a starting point. It’s essential to bake some profit into your prices as well. Otherwise, it will be challenging to sustain your trucking business over time.

So, make sure your prices are high enough to cover the cost of doing business and deliver some profit.

Your competition

Your potential clients are most likely doing research – and they’re considering your competitors, too.

Consciously or not, they gather data about what they think trucking services like yours should cost and what they’re willing to pay. That means you need to be aware of what your competitors are charging, too.

You might feel that your services are worth more; or that you want to charge new clients less than your competitors. And that’s okay.

But, if you’re entirely unaware of what your competitors charge, you may miss the mark completely – either costing you profit if you charge too little or costing you business if you charge too much.

Perceived value

Perceived value is the amount that a client thinks a trucking service is worth.  And, your competitor’s prices are a part of that perception. But, not the whole picture.

Your time has value, and you need to make a living wage. But your clients and potential clients won’t care about that. Instead, they will care about the tangible results that your trucking company delivers for their business.

The more they stand to gain, the higher the perceived value.

Your branding influences how your trucking services are perceived, as well. A professional logo and high-end brand positioning will lead to a higher perceived value than a cheap logo and discount branding.

Clients, especially new clients, may be willing to pay you more if they trust your trucking brand more.

So, remember to consider your brand and your competitors’ pricing when creating your pricing strategy. 

A website is active online, promoting your business 24/7 – even when you’re on the road. So, put this vital business tool to work for your trucking business.

Start by ensuring that your website design truly embodies your trucking brand. Visitors should understand who you are and what your company is about as soon as they arrive.

Are you the fastest transport service? The safest? The most reliable?

Important brand differentiators (things that set your trucking company apart from your competition) like those should be communicated on your website.

Your website’s visual design and marketing copy should project your business’s personality and identity. Here are some suggestions:

• Use your brand’s colors.
• Prominently feature your company logo.
• Write marketing copy with your target audience (best customer) in mind.
• And showcase your personal identity and what makes your trucking business the best choice.

Besides helping people to get to know your trucking brand (increasing the likelihood that they’ll hire you (now or in the future), your business website is also an excellent venue for showing off your success stories. Consider sharing testimonials from past satisfied clients. 

Finally, a strong website design will lend credibility and legitimacy to your business.

And don’t worry that you have a brand new site and trucking business. You can overcome that obstacle too. Mandi Ellefson, CEO of The Hands-Off CEO, told us that:

I could take a brand-new company and spin up a website and a logo and make it look like they’ve been around for 10 years. 

Perception is everything.

To learn more about excellent website design, check out Grow Your Small Business With These 7 Website Design Best Practices and 10 Biggest Web Design Trends for 2021.

Marketing is essential. 

An owner-operator is often the only member of their team; so, you’ll need to get comfortable with selling… well, yourself.

And, if you’re planning to start a small fleet, you’ll need to learn to sell your business.

Either way, build a game plan for selling yourself and your trucking services. And, opt for tactics that you can really implement daily without taking too much time from your core business – trucking.

Your marketing efforts will mean the difference between success and failure.

Here are three tips to get you started:

Take time to develop and rehearse an “elevator pitch” (explaining exactly what your trucking company does, what it does best, and why it’s the best choice) until you can deliver it comfortably and confidently to anyone, anywhere.

This 20-30 second explanation of what you do should be interesting and descriptive. After all, you’re the expert in trucking – not your potential client.

Check out MindTools’ guide to Crafting an Elevator Pitch.

Practice overcoming objections. No matter how excellent your transport services are, clients and potential clients will always have reservations – after all, their money is on the line.

For example, how do you answer questions about your safety track record or timeliness of delivery? So, brainstorm as many possible objections as you can think of.  Then practice putting those concerns to rest.

Develop and execute a list of day-to-day tactics that will keep your sales/marketing efforts moving forward.

If you’re not selling your services, then it’s likely that no one is. So, you’ll complete your current contracts to find an empty calendar and no income looming ahead of you.

Make sure to make marketing a part of your day every day.

Here are a few ideas…

• Use your truck(s) as passive marketing ambassadors everywhere you go. For example, place decals or vehicle wraps with your business name, logo, web address, and contact info on every truck. This will also help your trucks visually stand out and create a professional impression.
• Build a mailing list and stay in touch with your clients and prospective clients. This will keep your business top of mind, so you’re more likely to get a call when your services are needed.
• Ask happy clients to refer you to their friends and colleagues. Word-of-mouth is the most powerful form of marketing there is.
• Keep business cards with you at all times and hand them out whenever you see an appropriate opportunity. (Be sure to share business cards with any potential clients who are already located along the routes you regularly travel.)
• Contact local businesses that may need your services and offer them a first-time discount. 

However you approach it, plan to seek new business to help your trucking company grow proactively.

Of course, hiring drivers or other employees for your trucking company means that you’ll have to deal with all sorts of legalities and paperwork.

This isn’t an area where you should “wing it.” So, we went straight to the source. The hiring experts at Indeed recommend that you:

• Get an Employer Identification Number (EIN) by applying on the IRS website (you’ll get your number immediately after applying!). You’ll need an EIN for many things, including to open a business bank account for your trucking company.
• Register with your state’s labor department.
• Fill out paperwork to withhold federal taxes from your employee’s wages.
• Set up workers’ compensation insurance if it is required in your state.

You’ll also need to decide whether you’re hiring full or part-time employees.

Part-time employees cost less. So you may want to start with part-timers. Then, as the business grows and you can afford it, you can expand their hours.

Full-time employees also require more paperwork to get set up.  

For the brave men and women who dare, starting a trucking company may be the most rewarding, life-changing decision they ever make.

Will you join them and start a trucking company of your own?

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We regularly update this guide to keep it current. We most recently updated this guide on June 20, 2021.