Do you want to know how much it cost to start a trucking company? If YES, here is a detailed analysis of how much it cost to start a trucking business from scratch.
So, we already discussed how to start a trucking business but it’s also important to know what it would cost you to set up your own trucking business so that you can be adequately prepared for it. You would also need a detailed cost analysis for preparing your business plan.
Here is a sample trucking company business plan template you can start with. So, let’s quickly analyze the start-up costs for starting a trucking business. Remember that this is just a forecast meant to give you an idea and you shouldn’t completely ignore the need to carry out your own personal research.
Estimated Cost Breakdown for Starting a Trucking Business
1. Purchase of Truck: $10,000 – $20,000
First, you would need to figure out the type of truck you want to buy and also determine if you want to buy a brand new truck or would rather opt for a second-hand truck. If you are going to buy a brand new truck, you may need at least $10,000.
You can get a very good truck from Ford for between $10,000 and $20,000 depending on size and tonnage. However, not so many trucking business operators can afford to buy brand new trucks. Some of them opt for second-handed trucks which are way cheaper and can be purchased with as little as $2,000.
If both options still seem too expensive for you, there is still a way to about it; you can approach companies that allow you to purchase a truck and pay in small installments but you need to have a good credit score for you to have access to such credit facilities.
2. Registration-: $500
When you have purchased your truck, you would need to register it with the department of motor vehicles or any other regulatory agencies. You should also make a budget of at least $500 for this although; you may end up spending way less than that.
3. Business Licenses and Permits-: $500
Trucking business is taken very seriously. Even if you would be working from home or running an ‘owner-driver’ kind of trucking business, you would still need to obtain permits that allow you to use your truck for business, drive inter-state and carry certain weights of goods. You should also make a budget of about $500 for this.
4. Insurance-: $1,000 – $2,000
Trucking business is a very risky one because you would be entrusted with people’s valuables and the road is filled with a lot of uncertainties and there is no telling what may happen or when it would. So, to reduce the effects of such risks, it is advisable for you to obtain insurance coverage.
Apart from insuring your trucks and the valuables you would be conveying, you would be conveying, you may also need to insure your drivers as well.
Insurance in trucking business is not a one-time thing; it is an expense that would be spread over an extended period of time. However, if you have just one truck, you can create an annual budget of between $1,000 and $2,000 for insurance.
5. Office/Parking Space
You would also need an office although, this is not really necessary as you can still operate your business using your home as your office.
What you would most definitely need however, is a parking space for your truck. If you have enough space in your home to be used as a garage, then you are covered but if you don’t, you would have to look for a secure place to park your truck and find out how much it would cost.
6. Website-: $100 – $200
Another cost you would incur is the cost of setting up a website for your trucking business. It is difficult to run a business these days without a website. A website can open up more doors and bring you a lot more business than if you didn’t have a website.
Luckily, there are a lot of online tools that lets you create a website at cheap rates even if you are not a website developer. Nonetheless, you should still budget between $100 and $200 for a website for your trucking business.
7. Marketing & Promotion-: $500
You also need to factor in the costs of marketing and promoting your business. You can only get an estimate of this figure when you plot a trucking service marketing plan. For instance, you may need to brand your truck with your company name and logo; you may need to have someone design a company logo for you if you cannot do it yourself.
You would also need other things like a company brochure, flyers, business cards and other promotional materials. For this expense, you should have a budget of at least $500 depending on how far you really want to go.
8. Staffing
Another cost you should put into consideration is the costs of hiring staff and also the wages/salaries you would have to pay then regularly. For a start, you may not need to hire staff especially if you are an owner-driver.
You can be the driver, receptionist, cashier and marketer all at the same time but as your business expands or if you have more than one truck, you would need to hire people who can take care of other aspects of the business. For instance, you would need someone who can respond to customer’s calls and enquiries, someone to handle financial transactions and so on.
9. Maintenance Costs
Another cost you would have to be prepared for is the cost of maintaining your truck. You have to be prepared for whenever your truck breaks down because it could happen at a time when you are not too financially buoyant and that may mean that you would have to disappoint your customers.
It may even happen when you are in the process of conveying goods for your clients and may affect their business adversely. Therefore, it is advisable for you to set some money aside for regular maintenance and repairs.
10. Sundry Expenses-: $10,000 – $50,000
You should also set some money aside for any other expenses that may not be included here or that you may not know about. This is in order to avoid any surprises and to ensure that you are adequately prepared to start your trucking business.
Going by the report from market research and feasibility studies, you will need about $1M to set up a medium scale trucking business in the U.S. The estimated cost of starting a small scale (owner – operated) trucking business in the United States of America is $200,000 and above. But if you choose to start with just one truck and perhaps fairly used truck it could be lower.
The estimated cost of starting a large scale trucking business in the United States of America is from 5 Million Dollars and above. Please note that the total cost will depend on the numbers of trucks you intend starting with and the numbers of employees that will be under your payroll.