6 Tips on How to Start a Trucking Company - Owner Operator
People start trucking companies all the time. But that doesn't mean that all trucking companies are successful. If you have been wondering how to start a trucking company as an owner operator, but you've been intimidated by the commitment, these tips are for you.
Make it a Family Affair
The most successful truckers that we know were all careful to include their spouses and children in their decision to start a trucking company. Being on the road can put a strain on family relationships. The last thing you need is to leap into a big financial investment when your support system isn't on board. Make sure your family and friends are there to support you as you take on your new venture. The most important component of becoming a successful owner operator is putting in the miles, and that is hard to do if you feel pulled toward home because of relationship issues.
Have Money On Hand
It is no secret, the trucking business involves big money and big expenses. Before you explore how to start a trucking company you need to get disciplined with your savings account.
Ideally, it would be great to have 90-120 days of operating capitol on hand, however, we understand that it is difficult when you get into your first truck. If you can't set aside that kind of money before getting into your truck, we recommend you try to set it aside during your 12 months of operation.If you go solo and don't lease on to a company, then your customers often don't issue payment until 30 days after they recieve bills. This means that you could go 45 to 60 days without payment to cover your expenses. If you do lease to a company most all companies pay within 14 days once you remit bills.
As an independent owner operator you also need finances available for insurance, fuel costs, maintenance and repairs to your truck not to mention your food and living costs.
Know Your Credit Score
When starting a trucking company your credit score is your reputation. Know you current score and do everything you can to improve it. Pay your bills on time, every time. You will need good credit to finance your truck and any other business expenses; and in trucking, credit checks are fairly routine, so don't let one take you by surprise. There are many free credit reports available online; often though your credit card company or banking institution.
Whether you are new to trucking or just new to owning your own trucking company, you need to have good mentors that can advise you on your business interests. A good place to start is by securing an accountant, lawyer and insurance agent that all understand the ins and outs of the trucking industry. The next step is to find other owner operators that can offer advice and encouragement when you need it most. There are many online communities that can also offer support.
The biggest enemy of business is fast growth. While it is always good to be growing and moving forward, fast growth can mean you are making risky business decisions. Those may pan out in the end, or they may not. When the stakes are high, we recommend choosing a slow growth plan. Concentrate your time and energy into better understanding the business and your cash flow. Then, when the time is right, growth can happen naturally and organically.
Don't Worry About the Time of Year
If you are committed to staying on the road and putting in the miles, there is no true "bad" time to start a trucking company. Some experts suggest avoiding the first quarter or launching in the fourth quarter of the year because the holidays usually mean more goods need to be transported. However, we have found that without exception trucking company success is more related to how much time OTR drivers spend on the road rather than the specifics of when they launched their business.
If your financing is in order, your family is in full support, and you are prepared to put in the work, any time can be a good time to start your trucking business.
If you are wondering about how to start a trucking company, we want to help! At K&J Trucking we love working with owner operators and we even have great leasing programs. Click below to learn more about K&J Trucking!