Trucking is a lucrative business venture that is essential in any economy worldwide. Logistics is the important backbone of a nation’s economy, and this is why it valued at $700 billion in 2019, with no signs of slowing down. There is enough room for anyone to start their trucking business in the industry. If you’re looking to start this particular venture, here are some things you should know.
Overhead Costs
Your overhead costs depend on your license fees and how you’re going to procure the trucks needed to run your business. Business license fees depend on your state and your industry. It usually costs between $100 to $300. Most of your overhead cost depends on your trucks and how you procure them.
Procuring Trucks
You can’t have a trucking company without the trucks. There are two ways you can go about this. One is to purchase trucks for your company. The other is to rent them.
Purchasing Trucks
Purchasing trucks is a costly venture, as one truck can easily cost you $100,000 to $200,000. But this investment is worth it if you’re planning to stay in the industry for many years because renting costs can increase as more competitors enter the field.
Looking for someone to provide the trucks for your business is essential. It’s always a plus to find someone selling trucks at a much lower price. Currently, one of the more highly sought-out dealers in the industry is those that sell Volvo trucks. Volvo trucks have been known to be resilient against the harshest climates in the world and have engines that can last for years. Furthermore, because they are also much cheaper when compared to other trucks in the market, such as the ones from Man or Caterpillar. It’s a good brand to get started with as you grow your trucking business.
If you have a tight budget, consider buying used trucks instead. The same dealers can sell you these kinds of trucks at a much lower price. Make sure to look for ones with low mileage, such as between 25,000 to 50,000 miles, because this ensures that the truck’s engine is not yet overused. If you’re looking for a much cheaper alternative, you can always rent trucks from dealers.
Renting Trucks
Renting trucks can get you more trucks functioning in your company than purchasing them one by one. It is a much cheaper strategy, but one that will cost your company a lot more once you’re a couple of years into the business. If you have reached a decent enough income to purchase your first new truck, then you should take this opportunity. This is a future investment that will help you build your brand in the years to come.
Consider mixing these strategies as you run your trucking company. We suggest that you rent trucks during the first few years of your business and then eventually transition to buy a big enough fleet to run your business without needing to rent. At that time, your business has grown big enough that you don’t have to worry about expenses aside from gas.
Home or a Dedicated Office?
The next choice you have to make is to either run your business from your home or rent an office. This will determine future expenses, and it has been known that it is more expensive to run a trucking business with an office when compared to running it at home.
Home Office
Running your business inside your home is your best choice when you’re only a few years into the business. You only need a laptop with tracking software and a dedicated phone to communicate with your truckers. These are particularly cheap when compared to procuring the trucks you need for your business. However, you’ll have to do most of the administrative tasks yourself. This can be manageable during the first few years of your business but eventually becomes hectic once your business has grown. Once your trucking company has grown, it’s time to rent or build an office.
Dedicated Office
Once you’ve procured more trucks, you’re going to need more employees to track and manage your fleet. The more employees you have, the more you need an office for them to work efficiently. This is the time you should start looking for an office.
The costs of renting an office depend on your state. It can range between $60 to $500 per square foot, so keep this in mind before renting a big office. Although it’s still possible for you to run your business remotely, you won’t be able to see how your employees are working. Additionally, remote work makes it a nightmare to train newer employees who have little to no experience in the field.
Starting a trucking company can be quite costly at first. However, it is one of the more profitable business ventures out there. Handle your costs during the first few years of your business by renting trucks and running your business at home. Once it has grown, consider having a dedicated office and buying new trucks. By doing this, you can ensure that your business will grow for years to come.
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