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Starting a Hot Shot Delivery Business – A Complete Guide

Are you interested in starting a hot shot trucking business? Do you want to learn what it takes to run a hot shot delivery business successfully? If YES, here is a complete guide to starting a hot shot business with NO and no experience.

Okay, so we have provided you an in-depth sample hot shot delivery business plan template. We also took it further by analyzing and drafting a sample hot shot trucking marketing plan backed up by actionable guerrilla marketing ideas for hot shot delivery companies. In this article, we will be considering all the requirements for starting a hot shot business. So put on your entrepreneurial hat and let’s proceed.

What is a Hot Shot Business?

Hot shot trucking involves cargo that is generally smaller and rushed; so many companies hire a contract driver to complete just one run. Figuring out how to start a hot shot trucking business isn’t too hard. It’s building the business and keeping up the chaotic pace that’s difficult.

Hot shot hauling is demanding, and generally doesn’t allow for breaks between pick-up and delivery because of the time sensitive nature of the cargo. This kind of schedule can take its toll on truckers physically, mentally and can create a challenging life on the home front. Before you start your hot shot trucking business, be sure your family understands the demands it will make on family life.

Starting a Hot Shot Delivery Business – A Complete Guide

  • Industry Overview

Businesses that need to have their goods and parcels delivered quickly to specific destinations can choose to contract with freight companies that offer hot shot business services. These types of freight companies accepts goods and parcels regardless of their weight and size, from small boxes and parcels to large ones, to factory machines that weigh tons.

  • Interesting Statistics About the Hot Shot Delivery Industry

Most of the time, the shipments are time-sensitive and freight companies need to have them delivered to their respective locations as quickly as possible.

Because shipments need to be delivered promptly and in a timely manner, hot shot load drivers are expected to deliver the shipments without taking any breaks on the way. Freight companies typically use diesel powered trucks and goose-neck trailers in order to deliver the shipments.

A Hot shot business is often mistaken for an expedited loads business. While they both may carry loads that are time-sensitive, there remains a big difference between the two. Expedited loads are those that are often carried and shipped by straight trucks, vans, and tractor trailers. Meanwhile, hot shot load drivers often use flatbeds or medium-duty trucks designed to pull trailers that are intended for hauling loads. 0

The hot shot business industry has not just become attractive to businesses that need to deliver time-sensitive goods and parcels, but also to truck drivers. Hot shot trucking provides freelance drivers the opportunity to earn extra cash, either by contracting with a hot shot operator or by using online shipping companies that offer freight matching services.

Nowadays, anyone who has the appropriate driving license from DMV are allowed to get into hot shot load industry and drive different hot shot trucks, which include overweight vehicles and trailers.

Independent hot shot drivers are given the opportunity to find loads that they want to ship and choose their preferred locations and destinations through online freight matching providers. This means that they have all the earnings – no deductions of any kind – and that they handle all of the paper-work associated with the service. The earnings usually depend on the loads and the shippers and on how much they work. The challenge, however, is finding a hot shot business to deliver.

Hot shot drivers who choose to be independent can take advantage of the different online freight matching providers that can help them find a hot shot business. Such a service works like online auction sites like eBay and can work well with drivers who want to go independent instead of contracting with a hot shot operator. This also works well for businesses that need to quickly deliver goods and parcels as they can easily find freelance drivers who can provide the type of service they need.

Starting a Hot Shot Delivery Business – Market Feasibility Research

  • Demographics and Psychographics

Some men and women are not cut out for 11 hour shifts a day. Some don’t like being on a schedule. These are two main reasons why drivers prefer hot shot trucking. Some men and women can’t travel far from home. The main reason why men and women flock to hot shot trucking is earnings and no commitment. Hot shot truck drivers can pick up a haul, work for a few hours and make a big pay check. If you can find the right load, just one trip can cover your monthly expenses.

Some companies provide a truck for you, while others will require that you own your own diesel truck. Just be aware that companies that provide a truck for you will usually take a higher percentage of your driving fee. You will also need to look into purchasing insurance for your truck. Insurance for a one ton or any truck that you drive is not cheap. There are other factors like your driving record and credit that factor in what you’ll pay.

  • List of Niche ideas in the Hot Shot Delivery Business

Hot shot trucking can be very rewarding and the type of lifestyle that many men and women look for. While a typical trucking job may be too demanding, hot shot trucking brings more freedom and often big rewards for your efforts. Hot shot trucking just might be your gateway onto that path. Hot Shot Trucking, also known as Less Than Truck Load (LTL), is a part of the industry that has essentially been created for free lance drivers.

You can make more money by channelling or targeting a particular niche. You can choose to move goods for a described set of business

  • Medical hot shot business
  • Commercial hot shot business
  • Agricultural hot shot business
  • Manufacturing hot shot business

The Level of Competition in the hot shot business

The term “hot shot trucking” is applied to truckers who drive rigs smaller than the standard semi-truck and trailer. It also refers to moving less than a truckload or LTL. Unlike hauling conventional cargo that can be scheduled regularly, hot shot cargo is often time sensitive in nature.

Hot shot loads vary and will depend on the type of rig you operate. Items hauled may include things like a trailer full of urgently needed parts, hauling fresh flowers, or something as small as delivering one envelop for a same day delivery.

This business is tough, competitive, and extremely unpredictable. There is no such thing as a steady pay check, and you are footing all of the expenses up front. You will also be in direct competition with a thousand other hotshots for every load you try to book. And some days, and weeks, you won’t win the work. That goes to explain that the hotshot industry is filled with eagle eyed competitors who are all looking for a pay check.

List of Well Known Brands in the Hot Shot Business

  • JCW hotshot trucking
  • A & A hotshots
  • III’s hotshot trucking
  • Hazels hotshot
  • Eagle ford shale
  • United vision logistics
  • Hot shot express
  • JF transports

Economic analysis

Hot shot trucking can vary in just terminology alone. Some hot shot truck drivers may or may not be contracted by a company. Hot shot trucking can represent a freelance truck driver. While companies are always needing items and products shipped to their destinations, so do regular people all across the world. This has helped the hot shot trucking sector grow and expand to be a global economy and provide an income to thousands of hot shot drivers.

No matter if you choose to become a hot shot truck driver, choose to be a company driver or decide to become an owner operator, the trucking industry controls around 70 percent of all hauling. There are pros and cons in trucking, just like with any job you choose. Trucking is a multi-billion dollar industry and that equals a lot of opportunity, hot shot trucking or any other type of driving for the industry.

Is a Hot Shot Business Worth Starting from Scratch or Buying a Franchise Better?

Start-up hot shot services businesses can be attractive because they allow the entrepreneur to have more control and greater influence. From a funding perspective, however, you may have a hard time finding lenders who are willing to take a chance on your hot shot services business concept.

If you are thinking about opening a hot shot services business, a smart move is to investigate whether franchise opportunities in your space might simplify your entering the business but for the sake of this article, franchising is a better option than starting a hot shot business from the scratch.

Possible Challenges and Threats of Starting a Hot Shot Business

There isn’t a business that is not faced with challenges. That is why if you own a small rig and are looking for a way to bring in more income, learning how to start a hot shot trucking business may be the answer. In fact it is the way to go. Becoming a hot shot truck driver is no easy task. Possible challenges and threats to starting a hot shot business may include

  • Getting a Truck and hiking price of Truck Fuel
  • Truck Maintenance
  • Likely No Regular Schedule
  • Registering the business
  • Finance
  • Applying for a U.S. Department of Transportation number online at the Federal Motor Carrier Safety Administration website or by mailing form MCS-150
  • Buying bodily injury and property damage insurance to cover you as a for-hire motor carrier

Starting a Hot Shot Delivery Business – The Legal Aspect

  • Best legal entity for a hot shot business

Setting up an LLC is in an option you should seriously consider when starting a hot shot business because it can protect you from personal liability if something bad happens. If you are planning on setting up an LLC for your business you can file for your authority at the same time the LLC is being formed.

An LLC is one of the most popular business forms available, and for good reason. There are many advantages of a Limited Liability Company including workplace benefits! Below are some of the primary benefits an LLC can offer your hot shot business!

  • Limited Liability
  • Pass-Through Taxation
  • Simplicity
  • Determine Your Own Structure
  • All Members Can Be Involved
  • Build Business Credit
  • Attractive to Foreign Investors

Catchy Business Name ideas for a Hot Shot Business

In order for a business to do well and be recognized, it is usually advisable that a catchy and attractive name is adopted. With that in mind, here are some possible names to consider adopting.

  • Alberta Express Hotshot
  • Dusty Derrick Hotshot
  • Midnight Oil Trucking
  • Fog Ducking Trucking LTD
  • Litespeed Trucking
  • Rock River Trucking Co.
  • Fast Freight Trucking Co.
  • RFN Hotshots Inc.
  • Sure Shot Hot-Shot
  • Ever-Ready Hot-Shot
  • Gordy’s Hot-Shot
  • Extreme Hot-Shot
  • Omega Hot-Shot
  • Express Hot-Shot
  • Sprinter Shot-Shot

Choosing the Best Insurance Needed for a Hot Shot Business

First off it is important to understand that hotshot trucking is a vital component in the commercial trucking industry. The drivers are usually single vehicle, owner-operators that work freelance for the freight industry. They transport smaller loads and usually operate in a smaller radius than the class 8 long haul drivers.

Hotshot haulers transport items such as vehicles, boats, freight and other equipment to a single customer that doesn’t have the time or need for a big rig to haul the freight. Accidents can occur and lives or properties might be lost. Your hot shot business just like any other business has a list of insurance needed to save you from unprepared expenses.

  • Primary liability
  • Non-trucking liability click to expand contents
  • Motor truck cargo insurance
  • Trucking physical damage insurance
  • Occupational accident insurance
  • General liability insurance
  • Workers compensation insurance
  • Umbrella or excess liability insurance
  • Trucking employment practices liability insurance
  • Freight surety bonds

Intellectual Property Rights in the Hot Shot Business

With competition and ideas being fierce in the hot shot industry, the need for an individual or a company to protect its intellectual property also tends to be very necessary. Intellectual property protection in the hotshot industry just like any money making business is about protecting the time, money and effort you put into your business.

In other to protect your intellectual property in the hot shot business, you need to register your trademarks and geographical indication, protect your IP, stay ahead of your game and fight anything trying to infringe your IP.

List of Legal Documents Needed for a Hot Shot Business

The need for businesses and individuals to move cargoes (documents, parcels and equipment) from one part of town to another part of town is an activity that has become part and parcel of a normal business life. There are people who are taking advantage of this need and they have successfully created services that will take care of the need – hot short business.

If you have knack for logistics and a sound business mindset, you can comfortably start your own hot short business and make huge returns on your investment especially if the business is positioned in a busy business district. Hot shot trucking business involves helping organizations and individual deliver their equipment, documents and parcels within the shortest time possible and this is usually done by truckers who drive smaller rigs.

  • Vehicle permits
  • Vehicle for service permit
  • Business license
  • Proof of Insurance
  • Drivers form
  • Commercial driver’s license

Writing a Business Plan for your Hot Shot Delivery Business

If it includes hard numbers, a hot shot services company business plan can become the catalyst for an executable business strategy. In contemporary business culture, business plans are also litmus tests used by external interests to assess real world viability and marketability.

Early in the process, it’s worth your time to learn how to write the market analysis section of a business plan. While a robust market analysis can be a selling point for a hot shot services business start up, weak market research is a sure giveaway for a business that hasn’t invested adequate effort in planning. While writing your hot shot business plan you need to access the following;

  • Access your competitors

Before you open a hot shot services business within your community, it’s a smart move to determine how strong the competition is.

  • Get a List of Nearby Hot Shot Services Businesses

Gain knowledge of how existing firms have positioned themselves in the marketplace, and then design your business in a way that sets you apart from the others.

  • Get Advice from Experienced Entrepreneurs

If you are interested in starting a hot shot services business, it’s a smart move to have a conversation with someone who is in the business. If you think owners of nearby hot shot services businesses will give you advice, think again. What’s in it for them?

Fortunately, somebody who runs a hot shot services business in a location that is not competitive to you may be willing to share their entrepreneurial wisdom with you, provided that you won’t be directly competing with them. In fact, they are often very willing to share start-up advice with you. It can take a while to find an entrepreneur who is willing to talk, but it’s well worth the effort.

How Much Does It Cost to Start a Hot Shot Business?

Setting a hot shot is not a bread and tea job. It’s a simple concept with a lot of moving parts. The biggest hurdle in getting started is the upfront costs of a truck and trailer and getting commercial insurance. Here’s a cost analysis of starting a small scale hot shot business

  • A Truck – $12,000
  • A Trailer- $10,000
  • The Business End (Authority, Insurance, Compliance, Etc.) – $8,000
  • Office space and other equipment – $3,000
  • Miscellaneous – $5,000

It will take $38,000 to start a hot shot business but this is just the tip of the ice berg. The costs listed are approximate and will vary. It will take time to get set up and rolling but being your own boss can be very rewarding.

  • Financing your Hot Shot Business

Capital is of prime importance in order to furnish trucks that will deliver the items quickly on the road. These trucks, however, need careful maintenance in its use with gasoline, service fee to the driver and machinery maintenance. In financing your hot shot business, your potential sources of financial support can either be internal or external.

If you are starting a business, you will most likely bring into play internal funds such as personal savings to finance you’re dealing but if you are previously in the spreading out stage, you should be drumming more on external financing in the form of debt or equity.

When borrowing money or raising funds from financier, you need to mull over three essential factors that could affect the feasibility and practicality of the financing package, specifically time duration, interest rate, and the administration participation of the funds contributor. Be extremely careful with purchasing the trucks with your obtained capital. Double check if possible its function and machine condition.

Choosing a Suitable Location for your Hot Shot Business

Location decisions are often important – to both large and small hot shot businesses. The location decision has a direct effect on an operation’s costs as well as its ability to serve customers (and therefore its revenues).  Also, location decisions, once made, are difficult and costly to undo.

The costs of moving an operation are often significant and run the risk of inconveniencing customers and staff. It is always best to get the location decision right first time. In the hot shot industry, many locations exist – Home based business, Commercial, and Industrial. In choosing a location in the moving industry one has to consider these factors listed below.

  • Demographics
  • Foot traffic
  • Accessibility and Parking
  • Competition
  • Proximity to other businesses and services
  • Ordinances
  • Utilities and other costs.

Starting a Hot Shot Delivery Business – Technical and Manpower Requirements

Technology might have altered the traditional way of doing things but we all know it is for the best. Just like in other businesses, technology has enhanced even the hot shot business. The requirements for your hot shot business may include all listed below and more

TRUCKS – $10,000+

  • 1 TON Truck or larger
  • Dually (no SRW)
  • 9000lb rear axle minimum
  • Diesel
  • Gooseneck or 5th wheel hitch in bed
  • Long bed (so trailer will not hit cab)

TRAILERS $6,000+

Depends on what you want to haul

  • Open 3 & 4 car wedge styles for autos
  • Enclosed trailers for autos, motorcycles, general cargo
  • Flatbeds for general cargo and equipment
  • Use goosenecks and 5th wheels
  • Make sure axles and tires are heavy enough
  • Remember more axles = higher tolls

EQUIPMENT

  • Lap top computer for online access $1,000
  • Internet access on the road via Wi-Fi or cellular $50/month
  • 20ton jack
  • Cargo straps, chains, tie downs, pad, etc

ADMINISTRATIVE

  • Business checking account (i.e. Bank of America)
  • Tax ID number (online)
  • Customer contracts/receipts
  • Business expense receipts / book keeping
  • Business licence/service permit (city hall) $50yr
  • Certificate of assumed name (court house) $15
  • CPA $200 to do taxes

ADVERTISING/EXPOSURE

  • Dedicated business phone number
  • Web site $25yr
  • www.uship.com account 7.9%
  • www.centraldispatch.com $35/month
  • Business cards (vistaprint.com) free + S/H
  • Door magnets/signage $100
  • Business name, phone number, slogan
  • Local phone book ad $50monthly

FMCSA requirements

  • MCS-150 form online $300
  • USDOT #1553028
  • MC #576750
  • Insurance requirements $750,000 liability/$5,000 cargo (minimums) $6000 – $10000/year
  • BOC-3 form $35
  • Safety inspections will be scheduled for Fire extinguisher & safety triangles in truck
  • Bills of lading
  • Hours of service log book

DMV

  • CDL Class a $50 in NC
  • You will need medical exam form & card completed by MD $150
  • Vehicle registration, for hire tags 26,000lbs ($400 NC)

The Service Process of a Hot Shot Delivery Business

Every business has various service processes that it operates on. The service process of a hot shot business is the means and process ranging from the picking up, transit, to the delivery of belongings. A customer just have to tell what they want you to deliver and where, and then it lies you to make a safe delivery. Indeed it is not an easy task but it is a systematic process you need to adhere to be able to get jobs.

Starting a Hot Shot Delivery Business – The Marketing Plan

  • Marketing strategies for a hot shot business

It is very vital that for a business to be known by everyone, there has to be great marketing plans in place at all times. The role of marketing in any venture cannot be over flogged because it is very essential. Therefore, you need to have very solid trucking marketing plan in place.

For such a business as hot short trucking, you may need to place adverts on the newspapers, the radio, as well as the internet. For the internet, look at starting a website and blog. Also, you can print fliers and brochures placing the right contact information about your business there.

Winning strategies combine common sense marketing with the constantly evolving demands of the marketplace.

Getting the Right Service Pricing for your Hot Shot Business

“How much do hot shot truck drivers get paid?” Honestly, there’s really no right answer because the amount of money you make depends on what you’re willing to do as a hot shot truck driver. Here’s what will determine your pay as a hot shot trucker.

  • How many load boards have you joined or have your drivers joined?
  • How many loads are you bidding on?
  • What’s your availability to run with loads?
  • Do you have the proper equipment to carry various load types?
  • How far are you willing to travel?

All of these questions factor in to what you’ll make as a hot shot operator. Here’s the key element to remember, you have a high earning potential as a hot shot artist. Many known drivers make $10,000 a year working a few hours out of the month and a few drivers are making $200,000 easily. If you put the time in, join some great load boards, you can make a lot of money hot shot trucking. But that’s up to you.

Strategies for Winning Competitors in the Hot Shot Delivery Business

In other not to make costly mistakes and give your competitors a competitive advantage, you need to adhere to the following below:

  • Don’t go into this business thinking you can make the big bucks with a little passenger pickup truck, it’s too limiting to what you can load and carry. At minimum a 1-ton flatbed is required, (bigger is better) and there is a reason for this.
  • Loads will be fork lifted onto the bed of the truck and you can’t fork pallets or whatever over the sides of a standard pickup bed. A lot of what we carry won’t fit in a standard bed anyway. And while some loads may be 35 lbs, others will be 3500 lbs. You need the bigger truck to maximize your load capacity and flexibility.
  • Don’t go into this business thinking you can survive the first year without having at least $10,000 earmarked for operating expenses in the bank in addition to all equipment expenses. Some do, and they’re lucky, but the majority of new independent hotshots go out of business due to lack of operating cash within the first 6-12 months.
  • Don’t go into this business until you do extensive, exacting research on what is required, and if at all possible, actually find someone already established to ride with for at least a couple of loads to see how it all works. This work is not for everyone, and it’s better to find that out up front than after you plunked down 50K+ in start-up costs.
  • Don’t go into this business if your spouse is dead set against you being gone for days at a time, they don’t dig the idea of being in the hotshot business, or they are attached to the idea of having a steady weekly income coming in. At least, don’t do it if you value your marriage…
  • Don’t go into this business thinking it will be easy money. Trust when you’re told there is no such thing. Anyone who tells you different is blowing smoke up… It truly will take you a long time to recoup your investment.

Possible Ways to Increase Client Retention in your Hot Shot Business

It is generally more expensive to acquire a new customer than to keep an existing one happy. Therefore, customer retention is crucial to growing a company.

  • Word of mouth, positive reviews and 5-star ratings on social networks and online review sites make for powerful marketing when it comes to customers who are ready to hire a freight company – make sure you are asking your customers to leave reviews for you online with each successful transaction
  • Optimize your website’s meta tags and on-page content in alignment with Google and other search engines’ best practices
  • Establish an editorial schedule and regularly publish new, original, optimized content to your website and/or blog including articles, landing pages, pages with forms (such as subscription forms that help you build your contact list, instant quote or request for information forms)
  • Make it easy for customers to find out why and how they should do business with you; more and more, customers want to do most – if not all – of their research online before choosing a freight company, including making price and value comparisons and looking for reviews
  • Motivate prospects who might be looking for a change
  • Perceived employee indifference is the #1 reason people stop doing business with an organization; make sure that the way you and your employees treat each and every customer and prospect is polite, professional and knowledgeable
  • Make doing business with you as easy as possible by providing as much information as possible in your proposal and on your website; show comparisons with unnamed competitors that demonstrate how your transportation services can save your customers time and money
  • In your print and digital marketing materials, speak to the points of differentiation that set your trucking business apart from competitors that would likely be most important to your customers
  • Incentivize referrals and recommendations from your current customers

Strategies to Boost Brand Awareness and Create a Corporate identity for your Hot Shot Business

Organizational growth rarely occurs without a foundational plan that includes client attraction, customer retention strategies and creating a cooperate identity. For organizations in highly competitive markets, such as transportation, coming up with strategies to attract new customers, keep customers happy and boost brand awareness is even more critical to business growth.

  • Be present – on line and off – where your prospects are; such as: trade associations, trade publications, social networks (especially LinkedIn and Google+), on the web (found in searches)
  • Publish original content to your website and blog that tells the story of your business that is search-engine optimized in order to increase the likelihood that prospects will discover and become aware of your brand
  • Leverage the good will and word of mouth marketing of your most satisfied customers in testimonials and reviews, and ask for referrals
  • Work your phone and email contact lists; send an email newsletter out at least once each month and follow up with prospects periodically to see if they are nearing a point where they need your services
  • Once a quarter or a couple of times each year, send out a large, colourful postcard with a call to action to drive prospects to your website for more information or motivate them to call you for a quote

Creating a Supplier/Distribution Network of a Hot Shot Business

Many businesses in their quest to meet a target for growth often plan changes to their distribution networks to accommodate the anticipated increase in product volumes. Distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. Distribution is a key driver of the overall profitability of a firm because it directly impacts both the supply chain cost and the customer experience.

Good distribution can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness. As a result, businesses in the same industry often select very different distribution networks. Optimization of distribution networks are now the present trend being walked by modern establishments.

Things that have driven businesses to optimize their distribution network may include merger or acquisition, business growth/downsizing, competitive pressure, increase efficiency, new market opportunities, change in customer’s base, increase in fuel etc. In other to optimize your distribution network in the hot shot business you need to keep looking for opportunities to expand your business and create more competitive challenge.

Tips for Running a Hot Shot Delivery Business Successfully

Starting a business is by itself an achievement and running it tests the entrepreneur’s aptitude in securing and managing assets. One type of a very feasible venture is the hot shot hauling business.

How able-bodied a business turns out depends on the owner’s knack to countenance challenges and triumph over difficulties. Flourishing entrepreneurs have earned their wealth and prestige through durable effort and by having the precise market at the right time.

A good business variety to endow your time and money is through a hot shot hauling business. This involves a specialty trucking industry having speedy expeditions to explicit destinations for on the dot package deliverance. Hotshot hauling can be an economical substitute to air cargo depending on the distance and the instance presented for delivery.

The best vehicle that could be utilized in hot shot hauling are the efficient and reasonably priced brand of trucks that could be capable of long term road driving and could endure the vast weight of the cargo equipment. Hefty inner city vans and pack trucks can be very efficient in travelling end to end in the road however could not be capable for hasty on the highway deliveries. Research and thorough understanding in van and truck types should first be done before purchase.

Next to consider are the possible orders from prospected customers in the hot shot hauling business. Build a good reputation on the cargo industry by assuring customers that their packages are in trustworthy hands and that it will be delivered on exactly at the right time.

Employ sales representatives who will face and converse with the consumers such as post offices, larger trucking companies, cargo distributors and the like. The persons that will be representing the company’s prestige and stance are the driver of the truck and the cargo handlers.

Seek hauling contracts with local manufacturing businesses, agricultural producers, warehouses and large stores. Contact freight brokers in your area or use Internet hot shot boards that list jobs. Ask for referrals from companies you work with and advertise by creating a website, sending mailers to targeted companies and networking at industry conferences or through social media.

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