Key mistakes new trucking business owners must avoid
Starting a trucking business is less about the truck and more about surviving the paperwork and the payment gaps. New owners who register early, plan their cash flow honestly, and resist buying more truck than their revenue supports are the ones still hauling after the first year.
Every new trucking business in the US gets a guaranteed appointment with the federal government. It involves a safety audit, and failing said audit can cause the government to shut the company down. With that said, many companies fail to make it this far because they fall into new business pitfalls in the first 90 days.
Treating Registration as Optional
New owners of a trucking business often sign a new truck lease and line up the first load only to discover that they lack operating authority. The USDOT number is the only way to operate a legitimate trucking business. Interstate carriers will also need:
- MC operating authority
- A BOC-3 process agent filing
- Unified carrier registration
- IFTA fuel tax credentials
- Enrollment in a drug and alcohol testing program
Before you have all of these things lined up, you can’t legally operate. The DOT number is one of the most crucial qualifications, and many new owners want to know: how long does it take to get a DOT number? Getting the number itself is fairly fast, but getting full operating authority takes considerably longer.
A vetting window applies before the authority becomes active. You need to account for these delays when setting up. Expecting to get on the road immediately can be an expensive error.
Underestimating Cash Flow
There needs to be a balance between daily operation costs and profits. If you don’t have enough money coming in, you won’t be able to pay for things like the following:
- Fuel
- Insurance premiums
- Permits
- Maintenance
According to the US Small Business Administration, every new company should lay out their projected cash flow in a business plan before they start spending. New carriers who don’t have a clear cash flow plan often find that a single breakdown or delayed payment is enough to plunge the operation into chaos.
Buying Too Many or Too Expensive Trucks
There’s a real temptation to start up with a brand-new sleeper cab. New trucks are more reliable and powerful, but the big monthly payments add up quickly. It’s better to start up with a well-inspected used vehicle and to put the savings aside. Only upgrade once contract freight stabilizes the revenue.
In the first year, your goal shouldn’t be to have the nicest truck in the yard. It should be to balance your books and to survive long enough to qualify for a better insurance rate and direct shipper relationships.
Start Your Trucking Business the Right Way
In the world of trucking, the first year of operation is often the most difficult, full of trucking startup challenges. That’s why so many new authorities fail within the first year. You need to handle registration early, account for the delays, and plan cash flow well. Prioritize financial health over having the flashiest and most expensive vehicles.
By following this trucking business advice, you can avoid trucking mistakes and give your trucking business a better chance of surviving that critical first year. If you’re interested in learning more about similar topics, see our other articles.
