Do you want to start an owner operator trucking business? If YES, here is a complete guide to starting an owner operator trucking business with NO money and no experience plus a sample owner operator trucking business plan template.
Starting a profitable business of your own or better put, becoming your own boss does not necessarily require that you acquire all the certifications or college degrees out there; it is all about determination to succeed backed by knowledge of the industry you want to operate in.
Although you would need certifications, licenses and college degrees to be able to launch some businesses, but the truth remains that there are loads of businesses out there that you can launch with just what you have and one of such businesses is an owner operator trucking business. This business is very ideal for you if you already own a truck.
All you have to do is to ensure that you equip yourself with the required commercial driver’s license (CDL), business network and the right attitude. One good thing about the industry is that it is pretty much open for as many willing entrepreneurs that are ready to play their part in the trucking industry.
An owner operator trucking company requires moderate startup capital, and the money you can make from the business is dependent on how hard you can work because there will always be clients who will need your services. As a matter of fact, most owner truck operators’ work round the clock and they hardly find time to rest.
The fact that you own and operate the business means that you must do both the marketing and execution of the jobs you get.
Operating an owner trucking company has its own advantage and one of the advantages is that the owner trucking operator can either choose to operate as a freelancer without signing a retainer-ship deal with any company or they can choose a lease agreement with a company of their choice and be committed to the company for a period of time; such deals are subject to renewals.
If you are interested in starting an owner operator trucking company, then you should read through this article in order to get the required guidance and industrial tips.
18 Steps to Starting an Owner Operator Trucking Business
Table of Content
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 6. Know the Possible Threats and Challenges You Will Face
- 7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- 8. Choose a Catchy Business Name
- 9. Discuss with an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- Starting an Owner Operator Trucking Business – Technical and Manpower Details
- 16. Write a Marketing Plan Packed with ideas & Strategies
- 17. Work Out a Reasonable Pricing for your Services & Products
- 18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
Owner operator trucking business operates in the trucking industry and it is a known fact that the trucking industry plays a very important role in the economy of the world.
They provide essential services to the united states economy by transporting large quantities of raw materials, machines, equipment, dirt, rocks, building materials, and finished goods over land— typically from manufacturing plants to retail distribution centers and from warehouses to construction sites. As matter of fact, heavy duty trucks are indispensable in the construction industry.
The trucking industry is responsible for the majority of freight movement over land, and they are a major stakeholder in the manufacturing, transportation and warehousing industries in the United States of America and other parts of the world.
In the United States, large trucks and bus drivers require a commercial driver’s license (CDL) before they can be permitted to operate. The activities in the trucking industry are regulated by the United States Department of Transportation (USDOT), the Federal Motor Carrier Safety Administration (FMCSA) and the Federal Highway Administration (FHWA).
They ensure that drivers and trucking companies adhere to safety rules and regulations and also that potential truck drivers undergo special training on how to handle large vehicles before applying and obtaining their commercial driver’s license (CDL).
Statistics has it that food and food products, lumber or wood products, as well as petroleum or coal account for 34.8 percent of truck traffic in the United States and by volume, clay, glass, concrete and stone, farm products, as well as petroleum and coal account for 35.6 percent of truck traffic.
The advancement in technology in areas such as computer, satellite communication, and the internet has contributed immensely to the growth of the industry. The advancement in technology is responsible for the increase in productivity of trucking companies’ operations, it helps them effectively monitor their trucks and their drivers and it helps drivers save time and effort.
The trucking industry is not restricted to trailers or large trucks hauling goods from destination to destination via interstate highways, it also involves smaller trucks that help transport smaller quantities of goods from one destination within a city to another destination within same city.
Trucking business is not only about transporting goods over a long distance. As a matter of fact, in the U.S. about 66 percent of truck tonnage move distances of 100 miles or less; local and regional hauls account for almost half of all truck revenues and they are the preferred choice for private carriers.
No doubt starting and operating an owner operator trucking business can be challenging, but the truth is that it can be rewarding at the same time. One good thing about the industry is that it is open to both big time investors who have the capacity to start the business with fleets of trucks, and aspiring entrepreneurs who may want to start with just one truck.
Despite the fact that trucking business involves both small operators with just a single truck and large operators with fleets of trucks scattered all across the United States, that does not in any way make the industry to be over saturated. The fact that people and industries need to move materials from one location to another on a daily basis means that there is always a ready market for owner operator trucking business.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who hire the services of owner operator trucking companies is not restricted to construction companies and building material sales companies. There is a wide range of both corporate and individual clients who cannot successfully move their goods, machines, equipment and dirt without hiring the services of a standard and licensed owner operator truck company.
As a matter of fact, the target market for owner operator trucking companies should involve Merchants and Warehouse Operators, Retailers who would want to move their goods from one location to another, Manufacturers (Chemical manufacturers, Textiles manufactures et al), Households who would want to move from one apartment to another,
Corporate organizations who would want to move from one office to another, Government agencies who have cause to move goods and materials from one location to another location, Non – Profit and Charity organizations who have cause to move goods and materials from one location to another, amongst others.
So, if you are looking towards defining the demographics of your owner operator trucking company, then you should make it all encompassing.
3. Decide Which Niche to Concentrate On
The trucking industry is one of many industries that are highly regulated by the Federal Government and also an industry that issues license.
Most owner operator trucking companies tend to operate general services that a standard owner operating trucking company is expected to offer, and owner operator trucking business is a niche area in the trucking industry. But on the other hand, some owner operator trucking companies may decide to major in some key areas such as;
- Local and long-distance movement of construction materials, machines, equipment, dirt, rocks, building materials, et al
- Heavy duty equipment movement
- Excavators movement
- Bulldozers movement
- Construction equipment movement
- Agricultural equipment movement
- Movement of oil and gas waste products
The Level of Competition in the Industry
No matter the line of business you decide to pitch your tent, you are still going to compete with others and even the government who are into same area of business, and owner operator trucking business is not an exemption.
The level of competition in the owner operator line of business or the trucking industry to some extent depends on the location of the business, your niche area of operation and of course the capacity of your truck. If you can successfully create a unique niche for your owner operator trucking business, you are likely going to experience little or no competition.
For instance, if you are the only owner operator trucking company in your location that is into radioactive waste collection and local hauling, you can successfully monopolize the market for a long time before you start having competitions.
It is important to also state that the competition in the owner operator trucking line of business cum the trucking industry depends on the capacity of your truck.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their business and the results they have achieved over the years.
These are some of the leading owner operator trucking businesses and trucking companies in the United States of America and in the globe;
- US Express
- Amodio Van and Storage
- Shaffer Trucking
- PRO Transport, Inc.
- Con-way Truckload
- Schneider National
- Sierra West Express
- Sinclair Trucking Company
- Southeastern Freight Lines
- Swift Transportation
- Consolidated Freightways
- Covenant Transport
- Daseke Inc.
- USF Glen Moore
- Knight Transportation
- YRC Worldwide
- Werner Enterprises
When it comes to starting an owner operator trucking business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business and start competing at national level.
When conducting costing and economic analysis for your owner operator trucking business, you have to critically examine these key factors; place, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your owner operator trucking business.
As an owner operator trucking business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
It is important to note that truck fueling, servicing and maintenance cost are some of the most important factors contributing to the overall cost of an owner operator trucking business and should be considered as a major factor when carrying out your costing and economic analysis.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting an owner operator trucking business, you would have to start from the very scratch because you will not get the franchiser of an owner operator trucking business to buy except you want to partner with an established trucking company.
Besides, starting an owner operator trucking business from the scratch is less stressful when compared to other related businesses which usually require detailed groundwork before launching the business. With an owner operator trucking business, you should just try as much as possible to secure an efficient haulage truck, commercial driver’s license (CDL) and then leverage on every marketing tool within your disposal to market your trucking services.
Please note that most of the big and successful owner operator trucking businesses and trucking companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own owner operator trucking business today, one of the major challenges you are likely going to face is the presence of well – established owner operator trucking businesses in your target market location. The only way to avoid this challenge is to create your own market; concentrate on households, individuals and start – up construction companies who need the services of a trucking company.
Some other threats and challenges that you are likely going to face when you start your owner operator trucking business are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising fuel prices.
So also, unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumer spending and of course emergence of new competitors within the same location where yours is located. There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the option of either choosing a general partnership, limited liability company, or a sole proprietorship for a business such as owner operator trucking business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale owner operator trucking business especially if you are just starting out with a moderate startup capital and a single haulage truck.
But if your intention is to grow the business from one haulage truck into a fleet of trucks and start operating all across the United States of America, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder’s meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your owner operator trucking business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your owner operator trucking business, you will agree that limited liability company; an LLC is most suitable especially if you have plans to grow into a full-blown trucking company. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
Normally, when it comes to Choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own owner operator trucking business, here are some catchy names that you can choose from;
- Alexis Gunter® Owner Trucking Company
- Leo Marvin & Sons Owner Trucking Company
- Mike Lawrence Owner Trucking Company
- Johnson Pedro Owner Trucking Company
- Silva Pearson Owner Trucking Company
- Walcott Ron Owner Trucking Company
- Rodney James Owner Trucking Company
- Ferguson Tony & Sons Owner Trucking Services
- Glaziers Brothers Trucking Company
- Charles Lance Owner Trucking Company
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your owner operator trucking business.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own operator trucking business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Equipment and Auto Insurance
- Risk Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own operator trucking business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
11. Get the Necessary Professional Certification
Apart from the results you produce as it relates to safe transportation of goods, professional certification is one of the main reasons why some owner operator trucking businesses and trucking companies stand out. If you want to make an impact in the owner operator trucking industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in the market.
Please note that all standard owner operator trucking business, especially those that transport hazardous waste companies are mandated to obtain the appropriate certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own owner operator trucking business in the United States of America;
- Business and liability insurance
- Commercial Vehicle Operator’s Registration for heavy duty trucks
- Appropriate driver’s license for drivers (Commercial driver’s license (CDL)
- Assistant’s license for assistants
- Health inspection Certificate
- Proof of ownership, proper identification and vehicle license
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Apostille (for those who intend operating beyond the United States of America)
13. Raise the Needed Startup Capital
Starting a standard owner operator trucking business can be cost effective if you already own your haulage truck. Securing a haulage truck is part of what will consume a large chunk of your startup capital. So, if you choose to start the business without owning a haulage truck, you may not have the need to source for fund to finance the business.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your owner operator trucking business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from government, donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Starting an owner operator trucking business is simple and straightforward; it is a business that can be started in any location of your choice. As a matter of fact, most owner operator trucking businesses run the business from their homes especially if they have a good parking space in their compound.
It cannot be overemphasized that the location you chose to start your owner operator trucking business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses with the required purchasing power, and a location that has minimal hurdles to cross especially as it relates to securing permits for parking heavy duty haulage truck.
If you make the mistake of renting or leasing a facility for your owner operator trucking business in a location that is difficult to access; a location with difficult terrain, then you must be prepared to spend more on fueling and maintenance of your haulage truck.
It is important to note that a business facility in a good location does not come cheap hence you should be able to allocate enough fund for leasing/renting of packing space in your budget.
Starting an Owner Operator Trucking Business – Technical and Manpower Details
When it comes to starting a standard owner operator trucking business, you will need at least one haulage truck and other related equipment that will aid you in carrying out your job. It is important to state that this haulage truck and equipment can be purchased as fairly used if you are operating on a low budget.
When it comes to choosing between renting and leasing a facility for your owner operator trucking business, the size of the owner operator trucking business you want to own, and your entire budget for the business should influence your choice. If you have enough capital to run a pretty large and well – equipped owner operator trucking business with enough parking lot for your haulage trucks, then you should consider the option of long lease or out rightly purchasing a land.
As regards the number of employees that you are expected to kick start the business with, you don’t need to employ anybody, it is a business that can be run by just the owner. The owner can serve as the driver, marketer, accountant and logistic manager.
But note that there will be times when you are expected to go out of your way to hire laborers to help you in loading and offloading your trucks and also experts to help you handle some job functions such as servicing, repairing and maintaining your truck.
If you are just starting out, you may not have the financial capacity or required business structure to retain all the professionals especially a maintenance team that is expected to work with you which is why you should make plans to partner with specialists in the industry.
The Service Delivery Process of the Business
The operation process as it relates to an owner operator trucking business depends largely on their area of operation and the size of the haulage truck.
Usually, when an owner operator trucking business gets a contract to transport a large quantity of construction materials, machines, equipment, dirt, rocks, building materials et al over land—typically from manufacturing plants to construction sites and from construction sites to dump sites, they will first conduct cost analysis in order for them to know the manpower and resources needed to carry out the job.
Once they conclude their cost analysis, then they will deploy the required manpower and machines to execute the job and then they will get paid after successfully carrying out their jobs.
16. Write a Marketing Plan Packed with ideas & Strategies
The fact that the entry barrier for starting an owner operator trucking business is low means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must be creative if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans and strategies for your owner operator trucking business, make sure that you create a compelling personal and company profile. Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to the trucking industry. This will help boost your chances in the market place when marketing your services.
Here are some of the platforms you can utilize to market your owner operator trucking business;
- Introduce your business by sending introductory letters alongside your brochure to construction sites, farmers, corporate organizations, manufacturers and retailers of machines and equipment, demolition and wreckage companies amongst others in the United States (if you are just starting out, you may want to concentrate on startups and smaller businesses)
- Promptness in bidding for transporting large quantities of construction materials, machines and equipment from corporate organizations
- Advertise your services in community based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet to promote your owner operator trucking business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
- Leverage on the internet to promote your business
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your trucking services at a price that is highly attractive is to ensure that you source your startup capital (money required in purchasing a haulage truck) from sources that won’t put pressure on you or give you high interest rate.
Another strategy that will help you offer your trucking services at the right price is to ensure that you cut operational cost to the barest minimum (fueling, repair, servicing and maintenance of your truck), and channel your efforts towards marketing and promoting your brand name. Asides from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost of paying sales and marketing executives.
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting your owner operator trucking business is to grow the business from a one – man owner operator trucking business to a standard trucking company with fleets of trucks transporting goods all across the United States, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your owner operator trucking business;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your business
- Install your billboards on strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- Contact construction sites, farmers, corporate organizations, manufacturers and retailers of machines and equipment, and demolition and wreckage companies amongst others in your target areas by calling them up and informing them of your owner operator trucking business, and the services you offer
- List your owner operator trucking business in local directories
- Advertise your owner operator trucking business in your official website and employ strategies that will help you pull traffic to the site
- Ensure that all you wear your branded shirts and all your haulage truck is well branded with your company logo et al.