Writing up your trucking business plan is one of the first things you need to do when you start a trucking company. Your plan will allow you to clearly define your trucking business and give you some direction before you get out on the road.
Your plan should include your goals, define how your company will be different, explain how you will grow, how you are going to acquire clients, and a financial plan that shows how you are going to make money. This business plan will be a fluid document and should be updated every year or so.
Steps to consider prior to creating a business plan for a trucking company
Before you start writing a business plan for your trucking company, there are several important steps you need to take. These steps will help ensure that you’re officially registered, and in compliance, with trucking industry regulations.
First, you'll need to register your trucking company as a business with the appropriate state and local authorities. This typically involves filing the necessary paperwork and paying any required fees. Not sure what business structure you should be? Click here to learn about the different options.
Next, you'll need to obtain an Employer Identification Number (EIN) from the IRS. This number is used for tax purposes and is also required when applying for certain licenses and permits.
In addition to the EIN, you'll need to obtain a USDOT number. This number is issued by the Department of Transportation and is required for any commercial motor vehicle that transports cargo or passengers across state lines.
You'll also need to apply for a Motor Carrier number from the Federal Motor Carrier Safety Administration. This number is necessary if your company operates as a for-hire carrier and requires you to comply with FMCSA regulations.
Another important step is filing a BOC-3, or a Designation of Process Agent form. This form designates a person or company to receive legal documents on behalf of your trucking company.
Additionally, it's crucial to obtain truck insurance that meets the minimum requirements set by your state and the FMCSA. This will protect you, your drivers, and your client's cargo in the event of an accident or damage.
Other steps to consider include setting up an International Registration Plan and International Fuel Tax Agreement, which allow your company to operate across state borders and file fuel taxes accordingly. Lastly, you'll need to obtain a Unified Carrier Registration, which is an annual fee paid to the UCR program.
By completing these steps, you'll ensure that your company is legally registered and operating in compliance with industry regulations. This will not only give you peace of mind but will also help attract potential customers.
Essential information for creating your trucking business plan
When creating a trucking business plan, it is crucial to gather all the necessary information to ensure its success. Here is a list of key details that need to be considered:
Determine assets and liabilities: Assess your financial situation, including the availability of trucks, finances, and other resources.
Understand spot market vs. contract market rates: Differentiate between the two types of pricing models to develop a clear revenue strategy for your trucking business.
Research going rates in freight lanes: Analyze the current rates in the specific freight lanes you plan to operate in to accurately determine your pricing strategies.
Calculate operating costs and cash flow: Conduct a comprehensive analysis of all expenses, such as fuel, maintenance, insurance, and permits, to determine the company's financial viability.
Know where to find loads: Research and identify reliable load boards or freight brokers to ensure a consistent stream of work for your trucking business.
By obtaining this information, you can lay a solid foundation for your trucking business plan. Success in the trucking industry requires a thorough understanding of assets, liabilities, market rates, operating costs, and load availability. A well-informed and comprehensive plan will increase your chances of attracting potential clients, securing loans, and ultimately thriving against your competitors in the trucking industry.
What to include in a trucking company business plan
When starting a trucking company, having a solid plan is essential for success. A trucking company business plan outlines the strategy and goals of the business, as well as the targeted market and potential customers. It serves as a roadmap for the company's operations and provides crucial information for potential customers or lenders. In order to create an effective business plan, there are several key components that should be covered. This includes a company description, market analysis, operational plan, financial plan, and marketing strategies. Additionally, details about the management team, target market, types of freight, and potential competitors should also be considered. By including all of these essential elements, a trucking business can set itself up for success against its competitors.
Executive summary
This is a summary of your company and your personal reasons for starting a trucking company. It is important to highlight your unique qualities and make a positive impression. It is recommended to seek assistance from an editor to refine your executive summary. It is advised to write this section last for optimal results.
Company Description
Your plan should start with a general description of your company. Begin with the background of the business and how it got started. It should also include the overall mission statement of the company and some of the key facts.
The overall mission of the company should go into what you plan on delivering and how you are going to differentiate yourself from the competition. Key facts could include when the company was founded, the number of employees on the team, what states you plan on operating in, and any other facts you feel are important about the company.
Services
Within the services section of your trucking business plan, explain what materials you plan on hauling and what industries you plan on operating in. You should also go into detail about how the service you provide will be beneficial to the clients in the locations you are operating in. This will help justify why you will be successful and why your services will be in demand.
Market Analysis
In the market analysis, you should portray how well you know the industry. It should give insight into where the industry is going and how you will capitalize on the changes. In addition to the industry outlook, your market analysis should include your target market, the characteristics of the market, the market's size, and how much of the market you want to capture. Thinking about these things will take time but will help you set goals you'd like to accomplish.
Management and personnel
If you plan to have staff or additional office help, your business plan should include details on your approach to hiring people. This should encompass your hiring process and how you will onboard new employees.
Owner-operators will need to adhere to the compliance standards set by the shippers and brokers they collaborate with. It is important to familiarize yourself with basic industry standards, regulatory compliance, and safety records.
Hiring skilled drivers with strong performance records will greatly contribute to the growth of your business, allowing for expansion into additional freight lanes. It is essential to have a retention plan in place due to the highly competitive market and high demand for qualified drivers.
If you find that managing people and paperwork is not your strength, it may be worth considering hiring additional personnel or a trucking business service partner to assist with running your business.
Sales and Marketing
Knowing what part of the market you want to capture is only half the story. You need to figure out how you're going to get the word out about your company. Specifically, what channels you will utilize to market your business and where you want to promote your business will be important for not just acquiring customers but keeping them long-term.
Through your marketing tactics, you will be able to build up a pipeline of potential clients. However, it is not likely that all your contacts will reach out to you first. You will need to come up with a plan for how you're going to engage those people who know about your company but aren't yet convinced they need your services.
This part of the trucking business plan will be crucial for the success of your company. It is easy to describe your business and what type of customers you want to serve but actually coming up with a strategy to acquire those potential customers will take time and effort.
Financial Projections
Within your financial projections, you will prove how your company will be able to stay in business and meet its goals. You should provide basic statements like profit & loss, cash flow, and a balance sheet. You will also need a sales forecast for the next three to five years.
Making financial projections might be difficult for those who are not experts in finance and who have never prepared information like this before. If you need assistance with your financial projections, give ATBS a call at 866-920-2827. We have been in the industry for over 25 years helping owner-operators keep track of their finances.
Finishing your trucking business plan
A trucking business plan may be time-consuming and seen as an obstacle getting in the way of getting out on the road. However, your plan will allow you to think about the big picture of your company and it will help you realize what it will take to be successful. You might also discover things that could stand in your way.
Not all business plans need to look exactly like this and there are plenty of sources online to help you get started. Don't skip out on this important step in starting your trucking business!
