Starting a trucking business with a single truck can be a lucrative venture for those with an entrepreneurial spirit and a passion for the trucking industry. However, one of the most critical aspects of starting a trucking business is understanding the costs involved. In this blog, we will explore the costs of starting a trucking business with a single truck.
Truck Acquisition Costs
The first and most significant expense of starting a trucking business is the cost of acquiring a truck. The cost of a new truck varies depending on the make and model and can range from $100,000 to $200,000 or more. If you're on a tight budget, you may consider purchasing a used truck, which can cost anywhere from $50,000 to $100,000.
Another option is to lease a truck, which can cost, on average, between $1,500 to $2,500 per month, depending on the type of truck and the lease terms. However, leasing a truck can be more expensive in the long run, as you will not own the truck at the end of the lease term unless you enter into a lease-to-own contract.
One of the most significant ongoing expenses of owning a trucking business is insurance. Depending on the type of truck, cargo, and level of coverage required, insurance costs can range from $8,000 to $12,000 per year. It's essential to shop around for insurance and compare rates from different providers to ensure you get the best coverage at the most affordable price.
Registration and Licensing Costs
To legally operate a trucking business, you must obtain the necessary licenses and permits such as operating authority, business entity, truck/trailer tags, etc. The cost of registration and licensing varies from state to state but can range from $500 to $1,500. You'll need to obtain a commercial driver's license, which typically costs between $150 to $250 (without training costs). Formal CDL training can cost between $2,000 to $10,000.
Taxes and Additional Registration
Depending on your business model (intrastate vs interstate), your jurisdiction, and other variables, you will likely have additional taxes and fees to register and pay for. These include but are not limited to the International Fuel Tax Agreement (IFTA), International Registration Plan (IRP), Unified Carrier Registration (UCR), Unified Registration System (URS), and Heavy Vehicle Use Tax (HVUT).
To attract customers, you'll need to market your business. Marketing expenses can include website development, advertising, consulting, and business cards.
Starting a trucking business may require purchases such as an Electronic Logging Device (ELD), GPS, phone, laptop, headset, load board software such as DAT TruckersEdge, and accounting software.
Other expenses associated with starting a trucking business include purchasing equipment for operating your business such as tarps, straps, and any uniforms/safety gear. If you plan to operate your business from an office, you'll need to factor in rent, utilities, and office supplies.
If you plan to hire employees, you'll need to consider the cost of salaries, benefits, and workers' compensation insurance. Depending on the size of your business, you may need to hire a dispatcher, accountant, or other administrative staff. Owner-operators may consider hiring these roles as independent contractors (1099’s) to avoid additional expenses from hiring employees.
Additionally, ongoing expenses such as insurance, fuel, maintenance, and operating costs can add up quickly. It's crucial to budget carefully and plan for unexpected expenses to ensure the success of your business.
If you're considering starting a trucking business, it's essential to do your research and understand the costs involved. Talking to other trucking business owners and consulting with industry experts can provide valuable insights and help you make informed decisions.
Despite the high costs, starting a trucking business with a single truck can be a profitable venture. With careful planning, hard work, and a dedication to providing excellent service to your customers, you can build a successful and profitable trucking business.
There are two major choices when it comes to starting your professional driving career – starting your own trucking business or working as a company driver. There are multiple ways to start your trucking business with different levels of investment, risk, pay, and support. It should be clear by now that it takes a definitive plan. If you feel drawn to the idea of starting your own trucking business, and if you feel you have the inner drive to drive, Soshaul can help! Please check out our free and for-purchase resources, templates, and in-depth courses available on our website.
Are you interested in learning more about business plans or business structures, URS or UCR, IFTA or IRP, equipment or technology, or perhaps sales and marketing in transportation? Ready to START, DRIVE, & ACCELERATE your trucking business? Check out our course here!
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC - Copyright 2023 - does not assume responsibility for any omissions, errors, or ambiguity contained herein. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.