Starting a trucking business isn’t like opening a store or restaurant. Before your trucking business can take off, you have to meet specific requirements set by the government. This is more than figuring out how to attract customers and retain employees. So, here’s everything you need to accomplish before opening your trucking business.
Acquire the Appropriate Licensing
Driving a big rig is not like driving a van. Because of their sheer size, you must be able to maneuver it properly. As with any vehicle, you’ll need to acquire the proper licensing before you’re able to legally operate your trucks. You, as well as the other drivers employed by your company, must have a commercial driver’s license. To acquire this type of license, you have to be at least 18 years old. However, in order to drive the trucks themselves, you have to be at least 21 years old.
Getting this specific type of license is different than a regular driver’s license. The issuer will perform an extensive background check. You also have to undergo CDL training, pass the written exam and then pass the driving test. The standards of how the test is performed varies by state, so remember to view your state’s guidelines for specifics.
Come Up with a Business Structure
Trucking businesses can have various business structures. In general, there are four business structures to choose from: limited liability company, partnership, sole proprietorship and corporation. You’ll need to think about which structure is best, so you can officially register your business with the state.
A sole proprietorship is when you are in complete control of the company and responsible for everything that occurs. If you choose this structure, be prepared to do everything you can to mitigate liability and lower the cost of taxes. Since we’re talking about a trucking business, one way of reducing liability is to incorporate ELDs into each truck.
An ELD, or electronic logging device, is a device that’s installed directly in the OBD of the vehicle. You’ll be able to see everything that occurs both in and out of the vehicle. So, if there’s ever an accident or your employee isn’t doing their job properly, the ELD will give you everything you need to know. Be sure to review a detailed guide on ELDs to have a better understanding of how they function.
If you choose to make your business a corporation, you’ll have to choose from one of its sub-categories: S-corp, C-corp, B-corp, non-profit corporation and close corporation. A partnership is when you and someone else have joint ownership of the business. A limited liability company is often considered the perfect choice for beginner business owners as it combines the best of a corporation and a partnership. You won’t have to worry about being held responsible in terms of liability and your taxes may be lower as well. As with any business venture, it’s also a good idea to retain legal counsel and speak to someone who’s knowledgeable about owning and operating a trucking business.