How To Start A Trucking Company With Just One Truck [An Ultimate Guide for 2024]

eCapital Corp

Last Modified : Dec 17, 2024

Fact-checked by: Bruce Sayer

If you are passionate about being your own boss and have a keen interest in trucking, this is the right business for you. But carefully consider before you take the plunge. Taking business into your own hands allows you to decide what loads to haul, who to work with, and how often to work, but your income is no longer a regular paycheck. Instead, your income is defined by your determination to succeed and your ability as a business owner.

If starting a trucking company with just one truck is your goal, keep reading to learn 9 steps to success.

Why start your own trucking company?

Owner-operators take in over three times the average salary of an over-the-road (OTR) company driver. However, all expenses must be deducted from this salary to determine the owner-operator’s profit. Managing cash flow and controlling expenses are of the utmost importance. For those with driving experience, a business head, and the desire to be your own boss, starting a trucking company and being an owner-operator has its distinct advantages:

• Owner-operators have more independence with the freedom to be flexible and work on their own terms.
• Being the owner of your own trucking company means you can grow the business to increase your income.
• Adding more trucks and drivers to your roster will significantly increase your revenues and take the business to the next level. At this stage, many company owners stop driving and make a career shift from the driver’s seat to managing the business from a home office or fleet yard.

Learning how to start a trucking company is not difficult – use the nine steps listed below to follow a proven path to success.

How to start a trucking company in 9 steps

1. Get experience

If you aren’t already driving – the first thing you need is experience! Nothing can prepare you better for learning how to start a trucking company than hands-on over-the-road experience. This may sound like stating the obvious, but it’s worth mentioning.

First, you’ll need a commercial driver’s license (CDL), then start logging road experience. You can attend a private truck driving school or sign up with a trucking company offering a training program. Many owner-operators begin as company drivers to learn driver skills, gain road experience, and learn how to start a trucking company.

2. Choose a business entity

The next step in how to start a trucking company is to register your new company as a business entity. There are several options, each providing various personal liability protections, taxation methods, ownership structures, and other technical differences — be sure to understand which is the best fit for your company. If you’re starting a self-owned trucking company, investigate limited liability companies (LLC) to protect your personal property as a business owner and provide several tax advantages.

Most states require you to appoint a registered agent when you form an LLC. A registered agent accepts and sends legal documents on your behalf. They’ll also receive compliance and tax information and be the direct point of contact with the state.

As you continue investigating how to start a trucking company, you’ll discover the need to obtain an EIN (employer identification number) for your LLC. Getting an EIN is critical to your business and required for many aspects of operation, including opening a business bank account.

3. Choose a business name

Be memorable – it is a crucial element of how to start a trucking company built for success. A unique business name is needed for legal requirements but choosing a distinctive and easy-to-remember name is essential for marketing purposes.

Think about how you want your business to be perceived. Write down words associated with your business on slips of paper and then mix and match in different combinations to generate creative ideas. Be sure the name you choose is relevant to transportation, is not too lengthy, and is translatable.

Legal business names cannot be duplicated in the same industry or geographic location. To see if the name you’re considering is available, search for the name using the USPTO website’s electronic search system.

4. Register your business

As you learn how to start a trucking company, you’ll discover that the most time-consuming part is the paperwork needed to fulfill many requirements outlined by the FMCSA. The good news – it may be time-consuming, but thankfully, it’s not difficult to complete.

Depending on the business you operate, your company will need to comply with most, if not all, of the following before you start hauling:

• USDOT Number– used to collect and monitor safety information, inspections, crash investigations, etc.
• Operating Authority– dictates the type of operation your trucking company may run and the cargo it may carry.
• Heavy Vehicle Use Tax(Form 2290) – an annual federal tax on trucks exceeding 55,000 pounds to fund highway programs and improvements.
• Unified Carrier Registration(UCR) – a system designed to validate active insurance coverage within every state your trucking company operates.
• International Registration Plan(IRP) – this license permits your trucking company to operate in all states in the U.S., the District of Columbia, and the provinces of Canada.
• International Fuel Tax Agreement(IFTA) – a reciprocity agreement between the contiguous U.S. states and Canadian provinces to simplify reporting of fuel use by carriers who drive in multiple jurisdictions. Filings are required quarterly.
• BOC-3 Filing – a federal filing that assigns a process agent to whom court papers may be served in a legal proceeding. A process agent must be designated in each state where you maintain an office or establish contracts.
• Drug Testing and FMCSA Clearinghouse– registering all drivers with the FMCSA Clearinghouse provides employers and government agencies with real-time data about drivers’ drug and alcohol program violations. This information is used to complete insurance and licensing requirements.

When learning how to start a trucking company, verify all licenses and permits required for your transportation business. Additions to the above-listed registrations may be required depending on the services you provide and where you operate. To streamline the process, reach out to a registered FMCSA filer who can cost-effectively navigate the maze and complete the procedures of filing requirements.

5. Create a business plan

Starting your own trucking company can be overwhelming if not approached in an organized fashion. As your licenses and permits are in the process of being issued, work on developing a solid business plan.

A good plan will guide you through each stage of starting and managing your trucking business, including how to structure, run and grow your new business. The following are the key elements of a well-organized business plan:

• Executive Summary
• Company Overview
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Marketing Plan
• Operations Plan
• Management Team
• Financial Plan

Download a free business plan for trucking

The importance of having a plan will soon be evident as you become engaged in the turmoil of operating daily — it will keep you focused on building your business according to a blueprint. A key element of your business plan will the financing. In your financial plan, calculate how much you will earn during a particular period, then plan how much you will spend, save, and borrow. Next, identify long-term funding sources for your capital assets (i.e. trucks and trailers) and short-term financing options to provide a reliable cash flow you can count on. One of the leading causes of business failure in small businesses is poor cash flow management and lack of working capital. Plan and be prepared for the high operational costs of hauling freight.

6. Secure startup funding

As you launch your trucking company, it will become evident that trucking is a capital-intense industry with high startup costs and daily operational expenses. The price for a new commercial truck begins well over $100,000 and can balloon to almost $200,000 depending on the make, model, and features. Leasing costs range from $2,500 or more per month for a used truck and more than $3,500 a month for a new tractor, depending on interest and amortization. Discover how to start a trucking company with little or no money by researching government funding options and alternative lenders such as freight factoring companies. Here’s a quick breakdown of some options for you to explore:

Small Business Administration (SBA) loans
Due to their low-interest rate and generous repayment terms, SBA loans are a much sought-after funding source. These loans are a great option to get your trucking company up and running, but only if you qualify! You need an extensive credit history and a good credit score to secure an SBA loan.

Small business term loans
In this funding arrangement, a lender provides a sum of money to the borrower to be repaid over time, usually much quicker than a conventional loan. Qualification is more straightforward than an SBA loan, but interest rates are higher and may be fixed or varied. When investigating funding options for how to start a trucking company, this type of loan arrangement is unsuitable for long-term planning.

Commercial truck financing
Equipment financing loans are a great source of funding to acquire new or used trucks. A truck loan is like a typical auto loan in that the vehicle acts as security for the loan. Payments are made monthly, and the borrower’s financial health determines approval.

Freight factoring
Freight factoring is a hugely popular funding source for trucking companies in any stage of development. It is an alternative form of financing used to accelerate cash flow and provide constant access to working capital. By selling accounts receivable invoices at a discount in exchange for immediate payment, truck company owners have a steady source of cash to support operational costs, pay bills, drivers’ payroll, and taxes when due. Each invoice factored becomes collateral for advanced funds, eliminating the risk of losing higher-valued assets, as could be the case when a company defaults on a bank loan.

The two most significant benefits of freight factoring are easy qualification for new and established trucking companies and increasing credit limits as your business grows. eCapital raises the industry standard for freight factoring services. We provide more money, quicker, and with less hassle than competing lenders can provide.

7. Stay compliant

Freight transportation is a heavily regulated industry. Complying with safety and government regulations is paramount for continued operations. Stay current with time-sensitive filing requirements, ranging from IFTA’s quarterly tax returns to multi-year renewals for CDLs. Failure to keep up with these requirements can result in loss of good standing or significant penalties. A registered FMCSA filer can help you stay up to date.

8. Establish a fleet management process

Part of learning how to start a trucking company is knowing how to manage vehicle maintenance, regulatory and safety compliance, fuel management, and driver supervision. Managing these items becomes more challenging as your company grows and more trucks are added to build your fleet. Streamline your fleet administration by using fleet management software. Use eCapital’s cost-saving fuel card program to best manage fuel costs and fuel reporting. The program provides the following:

• Significant discounts off the cash price
• Credit terms on fuel payments
• Cash advances
• Complete control over card use and security
• Easy fuel reporting capabilities

9. Build your business

Knowing how to start a trucking company and build long-term sustainability from day one is critical to the overall success of your new business. Diversify and broaden your customer base to ensure resilience over the long term. The best rule of thumb is not to allow any one customer to represent more than 20% of your revenue. Be aggressive and always look for new sources of freight.

Following are the recommended sources and tactics for getting more loads and growing your client base:

• Load boards
• Freight brokers
• Business networking
• Referrals
• Collaborative partnerships with other carriers
• Media advertising
• Social networking

The best way to retain customers and grow your business is to provide superior customer service. Use a transportation management system (TMS) to maximize customer service levels. Plan, execute and optimize the shipment of goods, then inform customers exactly where their shipments are and monitor on-time performance to meet or exceed customer expectations. That’s how to start a trucking company with the legs to grow!

FAQs

When first learning how to start a trucking company, many concerns will come to mind. Following are the top questions and answers operators need to know right from the start:

• Do I need a business plan for my new trucking company?

  If you plan to succeed, then a business plan is absolutely necessary! It is an important tool to help guide your decisions and provide greater clarity on all aspects from financial to operational and service details. Here are 10 reasons why you need a trucking business plan.

  Getting a new truck or trailer is often top of mind for owner operators in their first few years in business. There are several options, from leasing to buying new or used. There are also several options for funding these purchases, from traditional lending to alternative financial strategies. If you decide to finance a purchase with a commercial loan, the bank will expect to see a viable business plan as part of the qualifying process. Be sure your plan includes an estimate of your operating expenses, expected cash flow and your plans to expand. You’ll be ahead of the game with a well-written plan, especially when you demonstrate industry knowledge and experience.

• Do I need a budget for the first 30, 60, 90 days?

  Let’s cut to the chase: YES! You definitely need a budget, but it doesn’t have to be complicated. You will want to consider your fixed costs like a truck or lease payment, your insurance down payment and monthly fee. Then you have variable costs like fuel, and semi-variable costs such as salaries. Plus, do not forget the unexpected expenses such as a blown tire or mechanical failures.

  It takes time to get your business set up and start hauling freight, invoicing customers and collecting on that well-deserved revenue. Don’t get discouraged. For start-up businesses, it can be several months before regular cash flow covers the expense of running your new business. Be sure your budget includes upfront capital that will carry your business during this initial stage.

  A budget will help you track cash going in and out of your business and project how much revenue you need to keep your business going. At the end of the month, will you have anything left to pay yourself? Think about it… a budget is your financial roadmap to where you want to go.

  Finance Tip: New companies face great difficulty qualifying for a commercial line of credit or to secure enough cash reserve to cover start-up costs. A majority of these trucking companies consider working with a freight factoring company to access the working capital they need. Freight factoring is the ideal funding solution to enable new trucking businesses to operate while they build their way toward regular, sustainable cash flow.

• How do I get funding for my trucking business?

  Commercial banks have restricted credit to small businesses, making operating lines of credit nearly impossible to qualify for. Look for alternative lenders who specialize in transportation financing. A freight factoring company is the ideal financial partner for startups, growing fleets, and companies in transition. eCapital’s low fees and high advance rates are favored by truck company owners focused on efficient cost management.

• What is the best bank for trucking companies?

  Setting up a business banking account is essential to separate personal transactions from business dealings. For tax purposes, credit history and financial liability issues, it’s critical to separate your personal life from your business enterprise. The best bank for truckers is one that provides the financial support, flexibility and service features that support transportation companies. For you this may mean picking a bank close to a truck stop on your route, or a convenient online banking service that’s easily accessible no matter where you are.

  Do some research before you choose a bank because not all of them service the trucking industry well. Many banks limit their services to just the business basics and will not extend credit to transportation companies. The best bank for trucking companies are those willing to provide the credit you need to grow your business without imposing restrictive loan covenants that protect the bank at your expense. For this reason, a growing number of trucking companies use a bank to manage their transactional needs only, but turn to alternative funding options such as freight factoring to support their growth plans.

• How can a small business get a loan for a truck?

  Look for alternative lenders’ equipment financing or ABL (asset-based lending) options. Terms and qualification requirements are far more favorable compared to conventional bank loans.

• Is owning a trucking business profitable?

  Yes, if you focus on controlling costs, maximizing equipment utilization, and charging a competitive yet high enough rate. Use these four tools regularly to maximize financial performance:

• • Cost-per-mile calculator – this tool is used to compute the total cost to operate your business on a per-mile basis.
  • Profit and loss calculator – know your profit margin for each load before you haul.
  • Credit check tool – verify your customers’ ability to pay before you haul.
  • Five Star Load Board – find loads and monitor freight rates.

• Why do trucking companies fail?

  The main reason contributing to the failure of many trucking companies is that they undercapitalize their business. Ensure your trucking company has efficient processes to maintain positive cash flow and the financial resources to access working capital. eCapital’s unsurpassed speed of funding is your ticket to uninterrupted financial support.

• Is running a trucking company hard?

  Trucking involves long hauls, long days, and extended time away from home. For independent-minded entrepreneurs who can work hard and provide outstanding service, it’s an opportunity to shape your financial success.

• Can I start a trucking company without driving?

  Yes, but you will need to employ CDL drivers rather than operate alone. You are the best person to establish your company’s brand as a reliable service provider. Build your reputation and grow the business before you step out of the driver’s seat.

• How much money do you need to start a trucking company?

  Startup costs can range from about $10,000 to $20,000 (not including your equipment). This includes obtaining all licensing, permits, and insurance.

• How do I get loads for my truck?

  See Step 9 – Build your business.

• How do I get trucking contracts?

  Prospect and build a referral network to connect with targeted shippers best suited for the lanes you run. Use brokers and dispatching services to expand your reach.

• What credit score do you need to buy a semi-truck?

  Lenders generally require a minimum credit score of 600 to buy a semi-truck. Better rates and terms are available to business owners with a score of 640 and higher. If you’re in the 700s, your rates, terms, and options will be even better.

• How much does insurance cost for semi-trucks?

  Your needs, driving history, credit, and other factors determine the amount of your owner-operator insurance premium. The policy should include motor truck liability (also known as public or primary liability) and physical damage coverage. An owner-operator with new authorities can expect to pay about $16,000 per truck per year for a commercial truck policy.

• How can I manage collections from slow-paying customers?

  You need to concentrate on serving your customers, not chasing them for payment. Yet, with so many customers taking extended periods of time to pay their invoices, how do you manage collections efficiently? Another benefit of factoring invoices is that the freight factoring company will manage your invoicing and accounts receivable collections cost free. In addition, a reputable freight factoring company will help manage credit risk and avoid bad debt from delinquent customers with advice and a free online credit search tool. With this support you can monitor potential customers’ ability to pay before you haul a load.

• How can I save on the cost of fuel?

  Fuel will be your largest operating expense, representing over 30% of running costs. Any savings of this expense will have a significant impact on your bottom line. Driver habit and fuel saving technologies are well worth investing in, but the easiest and fastest way to achieve savings is to participate in a fuel saving program. eCapital provides fuel cards with significant discount pricing at thousands of service stations nationwide. With easy qualification for any fleet size, these convenient to use fuel cards provide the added benefit of credit terms on all fuel purchases made within our extensive network of over 16,000 major truck stops.

• How do I finance my start-up trucking company?

  You have the experience, skill and motivation to succeed, but how do you fund your new company in one of the most capital-intense industries on the planet? For smart entrepreneurs, the answer is freight factoring.

  Over-the-road freight transportation is a highly irregular industry with wild swings in volume, capacity, rates and costs. To make matters worse, the industry is known for having slow-paying customers that often take 30, 60 or even 90 days to pay their invoices. This creates an extremely difficult environment to manage your new company’s cash flow. Even large, established trucking companies experience periods of cash shortages that negatively impact operations. For these reasons banks are reluctant to extend credit to trucking companies, especially if they have little to no credit history.

  A reputable factoring company that specializes in invoice factoring for trucking provides fast, cost effective funding to pay your invoices within 24 hours. With immediate access to working capital, your new trucking company has the ability to react quickly to customer demand without limitation due to lack of funds. Take on new customers as fast as you can and grow your company with positive cash flow to support expanding operational needs.

• What should I know about taxes for my trucking company?

  Nothing can be more confusing or frustrating than figuring out the abundance of federal and state tax regulations. Be sure to keep up with your business’ tax requirements, otherwise you may face penalties from the IRS such as a lien on your accounts receivable. Besides income tax, there are employment, road and fuel taxes, and vehicle and state use taxes that you need to be aware of. Select a trusted tax advisor who can give you sound advice and help you stay on top of your tax obligations.

• Brokers won’t look at me because I’m just starting out, what do I do?

  It is a well-known fact that freight brokers don’t often take on clients who are just starting out. Fortunately you’re not out of luck, there are many options out there to find loads. Load boards are easily accessible providing an open market for hunting down freight. If you were a salaried driver and are now becoming an owner operator, try reaching out to places you have previously worked for or call companies that may need freight shipped. Talk to other truckers, word-of-mouth referrals are one of the most reliable sources for new business. Also, building relationships with direct shippers may help you get in the door sooner rather than later. You will certainly earn more revenue by bypassing brokers and working one-on-one with shippers. It’s a win-win!

Managing the whirlwind in 2024

The advantage of starting a trucking company now is the ability to make business decisions based on current economic conditions. Higher-cost trucking companies that started, expanded operations, or invested heavily in upgrades during the spot market frenzy of 2020-2021 are worried about turning a profit in the coming months. Startups that set themselves up to run lean and maximize efficiencies have a competitive advantage.

The key to success is maintaining a proper balance of costs versus revenues. Base decisions knowing what effect it will have on costs, charge customers enough to pay expenses yet remain competitive, and drive as many loaded miles as possible. This may sound like an easy enough balance to maintain but be aware of the whirlwind.

As business ramps up, so does the draw on your time and attention, creating a whirlwind of activity. The hunt for loads, meeting pickup and delivery schedules, maintaining compliance, and multiple other distractions will swirl around you and distract your attention from your company’s financial responsibilities. A common problem to avoid is allowing operational issues to overwhelm you and for financial obligations to become secondary in importance. Efficient accounts receivable management is key to your success. Bill customers as soon as deliveries are made, collect payments as quickly as possible, and pay bills on time.

To help manage the whirlwind, build alliances, and develop relationships with industry experts who are willing and want to help you succeed. Working with a financial partner to manage accounts receivables and ensure steady cash flow is highly recommended to manage the whirlwind and be profitable.

Conclusion

Being in business for yourself requires a keen understanding of the industry. You need to know what customers want and how to take care of them better than your competitors. It’s knowing the difference between revenue and profit, that you need to subtract all your expenses before putting money in your jeans. That you have to set funds aside for a rainy day. This is what separates the owner-operator from the company driver.

With so much to think about and manage, its important to have experienced business connections that can support you through the process. eCapital are experts in the trucking industry and have served thousands of clients with fast funding, discount fuel programs and back office support.

eCapital Corp

eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment refinancing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit eCapital.com.