Are you thinking of starting your own trucking business? With the global pandemic and resulting economic downturn of this year, your owner-operator dreams may have been put on hold for the time being, but that doesn’t mean your dream will be impractical forever.
You may not be able to afford to launch a new business now, but if you plan to do so within the next year or two, now is an excellent time to get to work crunching the numbers to make sure you are financially prepared for this endeavor.
If you’re unfamiliar with the financial reality of starting a trucking business, keep reading. We’ll break down the major expenses you should be aware of. Once you know what’s what, you can start saving and planning now so that, when the economy bounces back (hopefully soon), you’ll be ready.
What are the initial costs of opening a trucking business?
There are a few expenses every new trucking company will have to pay to get their business off the ground. Of course, the actual costs will vary state-to-state and by the intended type and scale of your new business.
Apex Factoring estimates most new trucking business owners invest anywhere from $10,000 to $20,000 at the start (including equipment). Let’s break that down.
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- Registration and formation documentation
This includes registering your business, acquiring IRP plates and a USDOT number, and paying the Heavy Vehicle Use Tax, Unified Carrier Registration (UCR) fee, and potential state-specific taxes. The total cost will vary depending on how many trucks you plan to operate. - Driver wages
Truck drivers make roughly $37,000 on average (according to the US Bureau of Labor Statistics). The total cost for you will obviously vary depending on how many drivers you employ. As you are just starting, it is wisest to start small and take on more trucks and drivers as it is manageable.
- Registration and formation documentation
- Fuel costs
Again, this is a variable price depending on the number of trucks you operate and the distance driven.
- Insurance
The insurance price will vary depending on your location, vehicle type, cargo type, and a few other factors. The cost per truck should not exceed $10,000.
Let us help you find the best factoring company for your freight business!
If you want to start your new trucking company on the right financial foot, get started with freight factoring today! Head over to our ratings so you can see the best freight factoring companies for trucking businesses that you should consider signing a contract with. If you have further questions about freight factoring rates or the best freight factoring company for you, contact us today, and we’ll assist you!