If you’re considering starting your own trucking business, you’ll need to create a business plan to ensure success. The plan should explain what you hope to accomplish and identify the obstacles that you will need to overcome along the way. After all, the trucking industry is highly regulated and a well-thought-out business plan will help you get on the right track. It should also provide a roadmap to success that includes a description of your company, your goals, and the value proposition you are trying to sell to customers.
Many trucking companies must use debt financing to purchase equipment. While a low-interest rate environment can make debt financing attractive, trucking companies should be careful not to use too much debt to fund their operations. Ideally, a balance of debt and equity should be maintained. Here are some ways to use invoice factoring to keep your balance sheet healthy:
Limited partnership. A limited partnership is a business with multiple owners, which means that several people own the company but do not manage it. They also do not have a shareholder’s meeting or vote on business decisions. Limited partners are separate from the business and must report profits and losses on their personal tax returns. The IRS Form 1065 must be completed to report profits and losses. If you’re a limited partner, you’ll be responsible for any lawsuits that may occur.
International Registration Plan (IRP) and IFTA decals are necessary for a trucking company that operates in more than one state. The International Fuel Tax Agreement simplifies fuel reporting for carriers operating in several jurisdictions. Furthermore, BOC-3 filing is required to designate a process agent for any legal proceedings that may arise. If your trucking company needs to drive trucks that carry perishable goods, a refrigerated compartment could be the best option.
The next step is to choose a CEO with the courage to make bold changes. Mark Rourke, an executive vice president at Schneider, will replace Chris Lofgren, the current CEO. Mark Rourke says that the most important quality of a good trucking CEO is his willingness to change. “Don Schneider embraced intermodal innovation and used rail for long-haul routes and he was willing to change as well,” he says.
Besides having a reliable tracking system, a good trucking company should also be able to provide accurate proof of delivery. Even though not all loads are delivered without incident, most trucking companies will offer updates throughout the trip. If the trucking company is willing to provide GPS tracking, then it’s even better, as it allows the customer to track the products wherever they are. This is the most critical tracking component of all, so choose a company with this feature.
When selecting a company, check how flexible their scheduling is. For example, if you need to ship goods urgently, you can negotiate the terms of the shipment with the trucking company. Most companies will be happy to offer you this option, but you should be aware that many will not. For example, Walmart recently announced a hefty increase in driver pay, while rival for-hire companies say such extravagance is not in the company’s best interest.