Do you want to know how much it cost to start a hotshot business? If YES, here are 13 factors that determine the cost of opening a hotshot trucking business.
A hotshot job involves the expedited transport of freight. As a hotshot truck driver, you often haul much smaller loads than a standard trucker. You typically drive a one-ton diesel truck with a gooseneck trailer. Although there is an initial investment when starting this type of trucking business, the money is recouped within a short period.
With a few potential risks, hotshot trucking as a whole is an excellent career opportunity. As a matter of fact, hotshots with full deck & weight capacity, rolling in regions that offer the best rates & volume, gross $150,000 to $180,000 per year.
Carriers with newer authority are on the lower end of that spectrum, while carriers with 90-days or more are on the upper end of that range.
Estimated Cost to Start a Hotshot Business
When it comes to starting a standard hotshot business, one is expected to spend the bulk of the startup capital in purchasing different types of trucks and of course, renting and equipping a parking facility. Aside from that, you are not expected to spend much except for securing the required license and permits, servicing, maintaining and fueling, paying of your employees and utility bills.
In view of that, here are the key areas where you are expected to spend your start-up capital on if you want to start a hotshot business;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the hotshot business in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant including writing a business plan – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $12,400.
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $146,000.
- The cost for office and parking lots construction – $60,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $90,000
- The cost for purchasing first stet of trucks- 350,000
- The cost for equipment and accessories – (fifth wheel and ball, GPS, dependable phone, internet access on the road, cargo straps, chains, tie downs and safety equipment, basic tools, spare parts, gasoline and diesel, brake fluid and engine oil, uniforms, safety boats and hand gloves et al) – $100,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,750
- The cost of purchase and installation of CCTVs and car tracker software- $22,500
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost of launching a Website – $600
- Miscellaneous – $5,000
From the rough estimate as listed above, you would need a minimum of seven hundred and ninety – two thousand, nine hundred and twenty USD ($792,920) to establish a medium – scale but standard hotshot business with about a dozen trucks in any city in the United States of America.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a hotshot business to contact suppliers of the brand and types of trucks they would need to get the real time prices of these items. The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.
Factors That Will Influence The Overall Cost Of Opening a Hotshot Business
The Size, Brand and Number of Trucks You Are Starting With
A major factor that will determine the overall cost of opening a hotshot trucking business in the United States of America is the size, number and brand of trucks you intend starting the business with.
For example, the minimum size of truck you need to start a hotshot business is the equivalent of a Ford F250, while most operators have trucks equivalent to a Ford F450/550 Super Duty for towing. Note that the trailer should be suitable for the types of loads you plan to carry.
A 40-ft gooseneck flatbed trailer is the maximum length you can use and is the most versatile. Please note that the minimum it will cost you to purchase a truck alone is anywhere from $31,000 to $70,000 and up; expect to pay at least $9,000 for a trailer. Here are some of the Best trucking brands you can choose from?
- Ford F-250 XL Super Duty Commercial.
- Ford F-350 XLT Super Duty Commercial.
- Ford F-450 Lariat Super Duty Commercial.
- GMC Sierra 2500 Denali HD.
- GMC Sierra 3500.
- Nissan Titan XD.
- Dodge Ram 2500 Big Horn.
- Dodge Ram 3500 Big Horn.
The Choice of Location
Another major factor that will determine the cost of opening a hotshot trucking business in the United States of America is the location.
As a matter of fact, there are business consultants cum realtors who are specialized in helping people choose an ideal location for their type of business; a location that will guarantee them profitability and to breakeven within the shortest time frame.
So, you will now agree that location can influence the cost of starting a hotshot trucking business not just in the United States of America but anywhere in the world.
The truth is that the location you choose to open your hotshot trucking business determines if you will be issued the required business license and permits. Government officials must first inspect your facility to be sure that it is located in the location zoned for such business.
Please note that in the United States of America, zoning violations and citations can be very costly for a business. It is always preferable to make sure you comply with all the zoning and land use laws before you choose a location for your business.
The Required Licenses and Permits
In the United States of America, you cannot open a hotshot trucking business without first applying for the mandatory license and permits.
Top on the list is that you would need a broker’s license. Please note that you will be expected to pay the $300 dollar application fee to the Federal Motor Carrier Safety Administration and apply for a freight broker’s license and a USDOT number.
You would also need, building license, zonal permits, and signage permits amongst others that may be unique to different cities and states. As expected, these license ad permits cost money and it will influence the overall cost of opening a hotshot trucking business in the United States of America.
In order to get the overall cost of licensing and permits associated with opening a new hotshot trucking business in the United States, we will advise that you reach out to your county, city council or state government. You also need to consider state and federal requirements.
The Type of Facility
The type of facility you want to run your hotshot trucking business from is also a major factor that will determine the overall cost of opening the business in the United States of America. As regards the facility, you have the options of renting, leasing or designing and constructing your own facility from the scratch.
With renting and leasing a facility, you can modify the facility to fit what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants. If you want to construct your hotshot trucking business facility from the scratch.
It means that you will buy the land or a property, construct and equip the hotshot trucking business facility to fit into the ideal picture of a standard hotshot trucking business that you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility. This indeed will greatly influence the overall cost of opening your hotshot trucking business.
Additional Service Offerings
Another key factor that will determine the cost of opening and operating a hotshot trucking business in the United States of America is the additional services offerings of the hotshot trucking business. For example, a hotshot trucking business may decide to go into the servicing and maintenance of trucks.
This means that they will have additional facility, equipment and staff members to handle this aspect of the business. In essence, some of the additional services you are going to be offering will cost you more hence you must increase your budget.
The Cost of Hiring and Paying a Business Consultant and Attorney
As expected, if you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney.
A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, comprehensive SWOT analysis, and provide other advisory services that will help you with opening the business. So also, an attorney will help you with registering the business, draft contract documents and offer you all the legal expertise that will help you start the business on the right foundation.
These services will cost you money and it will indeed influence the overall cost of opening a hotshot trucking business in the United States of America.
The Cost for Branding, Promotion and Marketing Your Business
The cost for branding, promoting and marketing the hotshot trucking business is yet another key factor that will determine the overall cost of opening a hotshot trucking business in the United States of America.
Trust me, if you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion and marketing of your new hotshot trucking business.
It is not cheap to come by an expert in branding, promotion and marketing that will help you compete with brands that are already determining the market direction of the hotshot trucking industry in your city. So, if you add the cost of paying a branding and marketing expert, it will sure increase the cost of opening your hotshot trucking business.
The Cost for Furnishing and Equipping your Office
Another very important factor that will determine the cost of opening a hotshot trucking business is of course, the cost for furnishing and equipping the hotshot trucking business facility.
Before you can open a hotshot trucking business, you should budget and buy security locks, flat screen TVs, sound system, DVD players, Satellite dish and decoder, internet facility, GPS tracker, office furniture (table, stools and sofas), drawers and cabinets, telephones, filing cabinets, office equipment (cash register, security, CCTV, ventilation, signage), amongst others.
All these will cost money and it will influence the overall cost of opening a hotshot trucking business in the United States of America.
The Cost for Insurance
The cost for paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a hotshot trucking business in the United States of America.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
The Cost of Registering the Business
The cost for registering the hotshot trucking business is yet another cost that will influence the overall cost of opening a hotshot trucking business in the United States of America. The cost of registering a business is not very significant, but it will no doubt add to the overall cost of opening a hotshot trucking business in the United States of America.
Source of Your Supplies and Ongoing Expenses
Another major factor that will determine the cost of opening a hotshot trucking business in the United States of America is the source of your supplies such as trailer hitch: fifth wheel and ball, GPS, dependable phone, internet access on the road, cargo straps, chains, tie downs and safety equipment, basic tools, spare parts, gasoline and diesel, brake fluid and engine oil et al.
If you have in-house maintenance technicians, it will increase your profitability of running the hotshot trucking business.
Cost of Recruiting and Training Your Staff
The fact that you are opening your hotshot trucking business as a new business means that you are expected to recruit and train your staff.
The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers that will help you train your new hires up to speed and that will add to the overall cost of opening a hotshot trucking business.
The Cost of Purchasing and Customizing Uniforms
Another factor that will determine the overall cost of opening a hotshot trucking business in the United States is the cost of purchasing and customizing of uniforms. As expected, your staff members (drivers and assistants) and of course security personnel are expected to all have uniforms.
All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a hotshot trucking business in the United States of America.
Please note that there are other factors not listed above that will sure influence the overall cost of opening your hotshot trucking business which is why we will advise that you work with a result driven business consultant in your city to give you the needed guide and info as it relates to the unique factors in your location that will influence the overall cost of opening your hotshot trucking business.