Running a trucking business requires proper tracking of your income and expenses. A profit and loss statement can help you keep track of insurance payments, truck maintenance and repairs, and salaries. It also helps you keep track of other expenses like office expenses and taxes. In addition, you can use a transportation management system to maximize customer service levels. By using this system, you can track your drivers’ performance and notify them about the status of a shipment.
Another important aspect of running a trucking company is having enough cash on hand. You need to have enough cash to pay your drivers and pay for repairs and fuel. You may need a line of credit to finance your business. You can also use a factoring company to provide the cash you need to pay your trucks and drivers.
Before forming a trucking company, you must register as a business entity with the state. There are different types of business entities, and each one offers different advantages and disadvantages. A limited liability company, for example, protects the owner’s personal property if the trucking company fails. In addition, most states require you to hire a registered agent, which is your point of contact with the state.
A trucking company must register with the FMCSA and obtain a USDOT Number, which helps the agency monitor safety information, accidents, and inspections. The company must also obtain an Operating Authority that determines the type of operation and cargo it will haul. Additionally, trucking companies must pay the Heavy Vehicle Use Tax, which is an annual federal tax on trucks weighing over 55,000 pounds, to support highway programs. The FMCSA also requires that a trucking company has active insurance coverage in all states.
You can also structure a trucking company as a partnership. A partnership involves two or more people who invest in the company and share profits and losses. The partners also share lawsuit debts. This structure gives you flexibility and personal protection against losses. You must also consider the tax implications of incorporating your trucking company.
Another important thing to remember when starting a trucking company is to keep detailed records of your expenses. Make sure that your personal finances and business finances are separate. Your trucking company needs a steady flow of cash, especially during the early stages. Typically, it takes two to three months for a client to pay you.
The trucking business requires many employees. There are company mechanics to maintain the trucks, the dispatcher to coordinate the loads, the safety director who makes sure the Hours of Service rules are followed, and salespeople to find new shippers. The operations manager also oversees all drivers and loads. Additionally, the file clerk keeps track of all driver paperwork.
The trucking industry is a vital part of the economy, not only in the United States but in Europe, as well. It is the largest mode of transportation on land, and the demand for trucking services is never low. A great truck fleet, great team, and efficient back-office operations are half the battle.