From Driver to Owner-Operator: 9 Steps for Starting Your Commercial Trucking Business

Building a business from the ground up can be a daunting task, but with discipline, organization, and a little grit, you can become president and CEO of your own trucking company. Use the steps outlined below to set goals and deadlines, and stick to them. Soon, you too could become a trusted name synonymous with quality and dependability within the trucking industry.

Develop skills and experience as a commercial driver.

Begin with getting your commercial drivers license (CDL). You can get a CDL several ways: complete a private commercial trucking program, attend a driving program provided by a commercial transport company, or go to a driving school with expenses paid by your prospective employer. Owner-operators often get their start driving for another carrier for a few years.

Draft your business plan.

Before you open for business, you must create a plan that clearly states your revenue and operating expenses, including your salary. Consider hiring a business advisor to help you establish a business plan that best suits your needs.

Establish a business structure.

There are a few structures frequently used in the trucking industry that you will want to investigate. These include:

• Sole proprietorship
• Partnership
• Limited liability corporation (LLC)
• Corporation

Each structure type comes with its benefits and disadvantages regarding liability and taxes, and there can be differences with each from state to state.

Put away money to cover your start-up costs.

No surprise, starting a business can be expensive. There are the costs for buying your vehicle(s) and fees for licensing and registration. You will need to establish financing options and finalize a line of credit. We recommend playing it safe by having six months worth of cushion for when you first start out.
Determine how your business will operate.

The key to having a successful business is running it well. That may seem obvious, but you would be surprised how many businesses fail due to a lack of leadership and organization. No detail is too small, so some things to consider include:

• Operations – How will you house/maintain your vehicles and equipment?
• Sales – How will you identify freight for transport?
• Back Office – How will you address billing, bookkeeping, and taxes?

Assure compliance with state and federal regulations.

Before you pick up your first load, you will need to ensure that your company complies with the following commercial regulations:

• BOC-3 Filing – In the event that your company becomes involved in legal proceedings, you must have a process agent who can accept legal documents on your behalf. You must have a process agent in every state that you have an office or contract. For quick and painless BOC-3 filing, depend on Logistec/TTS. Our courteous customer service representatives can assist you with BOC-3 processing that gives you blanket coverage across the contiguous United States (48 states).
• Heavy Vehicle Use Tax – The U.S. Government charges a tax each year for vehicles weighing more than 55,000 pounds, which supports highway programs.
• International Fuel Tax Agreement (IFTA) – In an effort to make fuel reporting less complicated for carriers operating in multiple states and the Canadian provinces, you simply complete a fuel tax report each quarter which determines your tax obligation and disperses it to the states.
• International Registration Plan (IRP) – Registration fees are calculated based on the total distance trucks are driven throughout the continental United States and Canada.
• Operating Authority – As a for-hire carrier, you must obtain operating authority from the U.S. Department of Transportation (DOT), which determines the kinds of cargo you can transport.
  Logistec/TTS makes getting your operating authority easier and faster than ever with a turnaround of 16 – 20 business days. Click here to learn more about our operating authority packages, as well as our other regulation compliance services.
• USDOT Number – To efficiently monitor motor carriers’ safety and inspection data, as well as collision investigations, the DOT assigns all motor carriers a numeric identifier known as a USDOT number.

Logistec/TTS offers a USDOT number application and consultation services to simplify the process and help you focus on what’s most important, opening your business. Click here to see how we can help you obtain your USDOT number without the confusion.

Protect Your Investment with Commercial Insurance.

In the same way that you are required to have insurance on your personal vehicle to cover damages in the event of an accident, laws dictate that owner-operators insure their trucks for commercial transport. Truck Insurance Inc. offers a variety of affordable policies which include:

• Primary Liability – The law stipulates that drivers be insured for a minimum of $750,000 to cover damages and injuries should they cause a collision. Brokers and shippers will frequently require as much as $1,000,000 in coverage.
• Cargo – Often, shippers will want carriers to have $100,000 in coverage for cargo, which compensates for damage and theft.
• Physical Damage – In accidents where commercial drivers are not liable, a physical damage policy will cover damages to your rig.
• Non Trucking (Bobtail) – If you ever cause a collision and you aren’t transporting freight for a client, non-trucking insurance will compensate for damage to your truck.

Click here to request a free quote and start saving with Truck Insurance Inc. today.

Purchase or lease your truck and trailer.

Similar to buying or leasing a personal car or truck, you have options to purchase or lease trucks for your business. Be sure to consider options such as trucks with our without sleeper cabins, and van, refrigerated, and flatbed trailers.

• Operating (Full-Service) Lease – You’re responsible for covering maintenance, permits, and taxes, and when the lease is up, you’re free to leave.
• Terminal Rental Adjustment Clause (TRAC) Lease – Once the lease is up, you can either choose to place a small down payment and purchase the truck at its remaining value, or have the leasing company sell the vehicle. If there is any profit, it goes in your pocket, and if not, you cover the difference.
• Lease Purchase Plans – If you can’t afford a down payment or have poor credit, you can consider this lease plan, though you will typically pay more than with standard financing.

Grow your business.

To nurture your business and allow you the flexibility and efficiency you need to be successful, there are several tools and resources you can take advantage of. These include:

• Load boards – These online networks assist owner-operators by matching you with shippers. Popular load boards include DAT.com, DirectFreight.com, GetLoaded.com, FreightFinder.com.
• Brokerage – Skip the load boards with The Match Maker’s match brokerage service. The Match Maker has a proven record for matching carriers and shippers, and has been doing so for 30 years. Click here to see how The Match Maker can find you the perfect match for your burgeoning business.
• Freight Factoring – Often for owner-operators, it can take as long as 3 months to receive payment on invoices. Rather than waiting 90 days for payment, potentially limiting your business opportunities and accumulating debt through loans to continue operations, you can contact Match Factors to obtain a 95% advance on your invoice within 24 hours. Click here to learn more about freight factoring with Match Factors and how they can give you increased financial freedom to run your business. Leave the collections to them.
• Fuel Cards – With fuel cards, you gain convenience and benefits when fueling up at participating filling stations. Match Factor clients receive a free Comdata Fuel Card when you sign up, which is the leading fuel card in the industry. Drivers enjoy perks such as “cash only” or better pricing, ATM cash withdrawals, direct deposit, and more. Learn more about how Match Factors can save your business money on fuel with a free Comdata Fuel Card today.