With such a shortage in the trucking industry, now may be an ideal time for entrepreneurs who want to launch their own trucking company.
Here are some of the considerations people may face as they enter this potentially lucrative field.
Business plan
The typical business plan includes an executive summary, a description of the company, an analysis of the market, a sales and marketing plan and financial projections. Creation of the plan should be among the first tasks of the future owners of a company, but they should keep in mind that this road map may need to change as they move through the process. Even after a company is well underway, owners may need to adapt the plan to adjust to changes in the industry.
Business structure
Sole proprietorships, partnerships, limited liability companies and corporations all have different tax obligations, paperwork and owner liability. Choosing the right one from the start can save a lot of time and money, and may be the difference between making or breaking the business.
Transport Topics notes that the Tax Cuts and Jobs Act has drastically altered taxation matters for trucking companies. Many who formerly received a sizeable refund are now paying thousands of dollars due to expense deduction and tax rate changes.
While those already in the industry consider restructuring to adapt to the new laws, startups have the benefit of reviewing how last year’s tax season affected the various types of business structures before making their choice.
Licenses and permits
Every new company owner will need to apply for licenses and permits based on the type of business, the location and other factors. There are a number of these that are specific to the trucking industry:
- A federal Department of Transportation number from the Federal Motor Carrier Safety Administration
- Commercial driver’s license for each driver in the state of their residence
- Motor Carrier Authority Number from the FMCSA
- Unified Carrier Registration
- International Fuel Tax Agreement permit
Owners must renew many licenses and permits on an annual basis, as well as filing reports and fulfilling other trucking and transportation compliance requirements.
