With the increased shortage of qualified truck drivers, the demand for trucking services has never been higher. Suppose you’ve been thinking of starting trucking companies San Diego, but you’ve been putting off the idea due to one reason or the other. Now seems to be the perfect time to start your operation.
However, before going ahead to start your trucking company, it is important that you do adequate research on the industry. This will help you have access to all the information you need to run a smooth operation.
To help you with this, we have listed five things you need to know about owning a trucking company. These points should help you get started on your journey.
Have An Accurate Estimate of Your Starting Capital
In case you don’t know, the trucking business is a capital-intensive one. You will need to cover a lot of upfront payment before you can get your trucks on the road. Aside from the cost of buying the trucks or making a downpayment for them, you’d still need to worry about insurance, licenses, and permits. Some other recurring costs you are likely to deal with include the cost of fuel, salaries, food, maintenance, etc.
So before starting the business, it is important that you have enough money to cover these initial costs and some others. At least before the business starts to make money.
Typically, the first six to 12 months is usually the hardest for most trucking businesses.
Understand Tax Laws Related to the Business
One of the biggest challenges you are likely going to face as an owner-operator is how you and your business are going to get taxed. To avoid any problems down the line, it is important that you take time to learn about them.
As an owner-operator, it is your responsibility to file and pay your taxes yourself. Suppose you are previously an employee who doesn’t have to worry about calculating your tax since your company automatically removes it from your paycheck. This may pose a bit of a challenge.
Typically, you are required to make your tax payments at the end of each quarter. The amount you are expected to pay is usually in the range of 20-30% of your net income.
By doing this, you get to avoid any tax penalty.
Alternatively, you could hire an accountant or tax attorney to help you with this.
Know Your Target Customers
A lot of people venturing into the trucking business usually end up leasing their trucks to an established carrier. This way, they don’t have to worry about customers since the carrier already has an influx of customers looking to transport their goods.
This, however, shouldn’t stop you from working on getting your own direct customers. To do this, you need to know who your ideal customers are.
The type of customers your business will attract is usually influenced by several factors. One of such factors is the type of truck you have. The type of customers a dry van will attract is usually different from the one a flatbed trucker will attract.
Importantly, although you may have little control over your rates when your trucks are being leased to a carrier, still, it would be best if you found a way to stand out from the rest. These unique qualities are what will separate you from the crowd.
Know The Rules You Have To Comply With
When it comes to handling heavy machinery, making sure you follow all the laid down rules and guidelines of the governing bodies in charge is a must. For instance, to prevent your business from getting shut down, you need to ensure you meet all CSA safety standards. An example of this is that all truck drivers are expected to have a functional Electronic Logging Device (ELD) in their truck. The ELD will help track and monitor the number of hours they spend driving each week.
Aside from these rules, drivers are also expected to pass a list of physical examinations put in place by the CSA.
Know That It Is Not An Easy Business
Just like any transportation-related business, the trucking business is not an easy one. Although highly profitable if done well, you still need to put in a lot of work. From marketing your service to managing your fleets, and staff, you need to always be on your toes. In the early days of the business, you should also be ready to wear several hats.
To make things easy, you could outsource some of your basic day-to-day tasks. This will help you focus more on things that matter.