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So, you want to start a trucking company?

You’ve been an owner/operator for a number of years. You’ve made a good living and your equipment is either all, or mostly, paid off. Perhaps you even own your own trailer. You have made the decision to make the leap from being an...


You’ve been an owner/operator for a number of years. You’ve made a good living and your equipment is either all, or mostly, paid off. Perhaps you even own your own trailer. You have made the decision to make the leap from being an owner/operator to being an actual company owner. You’ve approached a few potential customers, with favourable results. You’ve mentioned your plans to friends and co-workers, and several are interested in working for you once you are established.

You’ve calculated your cost of doing business, and your income and expense projections. You have prepared a business plan, including your projected growth plans. You could not be more prepared to make this lifestyle change. And you could not be more wrong.

If you want to set out on your own, your first task should be to honestly examine your reasons for wanting to run your own company. Do you have an entrepreneurial spirit? Have you, throughout your adult life, always had the urge to be your own boss, to enjoy the benefits of hard work and fight your way through the challenges? Or do you feel that you’ve been treated unfairly by your last couple employers and feel you could run a business better than they do?

If the latter is true, you should probably stop right now, before you initiate a huge mistake. If you have worked for other companies and you feel that more than one of them treated you poorly – either financially or personally – yet many of your co-workers were content with their treatment and earnings, it is time for some harsh self-assessment, because it would appear that the common denominator in this issue is you. Are you difficult, or just plain miserable to deal with? Do you argue with dispatch or refuse reasonable loads? Is management fully aware of your opinion that you could run this show better than they can? Small wonder then, that others were dispatched more generously than you were. If you are unable to change your attitude, you will find it difficult to retain employment. The same attitude will make it difficult to retain customers if you strike out on your own.

If you are a legitimate entrepreneur and still eager to be the boss, reassess your financial projections. Knowing your operating costs is only a fraction of the battle.

On your own, there will be no one to call at 9 p.m. for a cash advance for a roadside repair. Your paydays on the 15th and 30th are history. Your insurance company requires a payment of 10-20% before you ever turn a wheel. Your fuel costs will remain consistent, but they now come directly from your own pocket.

All of your usual expenses (fuel, tolls, repairs, faxes, etc.) will be unchanged, but your income changes drastically. Unless you find a rare quick paying customer, your receivables will start to trickle in 30-60 days after invoice.

Even if you do your own invoicing weekly, your expenses will accumulate for upwards of 45 days from the time you haul the first load until any of your receivables begin to arrive.

When starting a trucking business, you will need, either in cash or credit, close to $30,000 on-hand to survive until your receivables cycle into regularity. The same amount will be required when you hire your first owner/operator. A credit card is not to be considered a line of credit, either. Run up 45 days of fuel costs on a 28% credit card, and you are parked before you start.

Still with us? You are to be commended for your attitude, work ethic, and preparation. Now for the shopping list of other details that are commonly forgotten. Know the value of the services you offer. If you worked for percentage pay at your previous job, you know what they charged.

Is a single operator who’s able to offer a higher level of loyalty worth even more? Or does the fact that you have no availability of extra equipment make you worth less? Or, was your previous employer undercharging for its services?

You need to find other small carriers who will hopefully give you rough guidelines as to rate structure, and compare their suggestions to what you already had in mind. When inquiring to other carriers about brokered freight, keep in mind that most will be pocketing  at least 10%, or a minimum of $100 per load. This will help to establish guidelines for your own rates.

On the subject of rates, don’t be lazy. More than one single-truck operator has taken the easy way out, and given their customers a rate per mile, letting the customer calculate their own freight costs.

This is fine if you only have a few destinations, and have found a rate that works for all of them. Doing this on the open board is business suicide. You will be guaranteed to be the first called for the 250-mile trips or US East Coast, where tolls are high and backhauls scarcely exist. Do you think the rate for Louisville, Ky. should be the same as to Boston?

In this scenario, it is. Also, don’t make the critical mistake of starting out with lower than realistic freight rates. Concentrate instead on offering very good customer service, thereby justifying higher rates.

Good service will eventually be rewarded, where low rates are nearly impossible to increase.

There is too much to cover in just one column. Next month, I’ll continue this theme, including essential tips on finding customers, setting rates and controlling operating costs.


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46 Comments » for So, you want to start a trucking company?
  1. Chris Bird says:

    I work in the gasfields of BC, and I live an hour east of Toronto. I have recently got a friend the job of covering my cross shift, so we are working one month on and a month off. We are both good drivers with at least 15 years experience each, but are getting sick of paying $1000+ for a round trip to go to work.

    I came up with an idea of buying a truck and hauling loads out to Calgary, Edmonton, or Prince George, and then switching, so the other guy could either haul a load back, or if one isn’t readily available, we sell or rent the trailer out in the oilfields, bobtail home, and buy another cheap dry van when we get home.

    In my mind, it would be paying us to go to our high paying oilfield job, plus building up a company for when we don’t feel like bouncing around on those mountain roads in a dump truck anymore.

    I have a line on an 07 Columbia with auto and a 450 hp Mercedes that is getting between 6.4 and 7.2 MPG depending on the load, so other than unforeseen repairs on an older unit and the $24000 for the truck, it should be a no brainer.

    Right?

    • H. Bender says:

      Hey, that’s what I would like to purchase to drive for a Windsor based trucking company.
      Would you know of any one that does have funds and willing to invest in a lady trucker that wants nothing more than to drive for a decent trucking company.
      I’m looking at $55000.- over 48 months allowing for a 15% in return.
      ~Heidi/Bluesgirl
      The truck is in fine show room condition with a 96″custom sleeper. I’m an stronge lady which is an orphan. I’ve got my AZ but love driving DZ 5 tons. This trucking company is super busy and has been in operation since 1999. My weekly earning are either $1500. to $1800. Paying back sooner could be in the cards, but 48 is so I don’t tighten up on the monthly debt load. Trucking company pays for everything, insurance, plates, tolls, transponder, truck decals (that’s all required decals in standing order) Could you help me out? I don’t have any funds and not the best credit.

      • Yvan Richard says:

        Hello ,

        If you have not purchased a truck yet perhaps we should talk … I am in the equipment leasing business and can consult you on some possible options .

  2. Jacob says:

    Hello, please tell me if I buy a truck with fridge or other type in Toronto and hire a good driver to work full time is that beneficial for a small investor who’s looking to built a company?
    Best regards

    • Robert Jack Roumieh says:

      Dear freinds
      I want to start cargo van sprinter operator business in Montreal.
      at the moment I worked as sprinter driver between Montreal Ottawa.
      I am thinking to buy a used sprinter van and start my own business but actually I do not have the complet vision for that.
      please freinds could you advise me that if this idea is good enough to start it, and if it is good generating revenue.
      Thank you
      BR
      Robert

  3. Samuel Kerumotswe says:

    hello please help me here. I want to start a truck business and i don’t have capital at the moment..so what do you recommend that i should do..?is it okay and possible to setup a contract with one of the rucking companies to help buy a truck and then that truck works for that company till it covers up its loan..?

    • sagar says:

      If you have your CDL, you can join certain big companies who have a lease to own program. You driver for them, but they will give you a truck and every paycheck they will deduct a portion for the truck payment. This is a very good way to get started

  4. tahseen Ganab says:

    i want to start a trucking business i have a capital to buy 4 to 5 trucks but i have no operators so what you will advice
    thanks

    • Kashif says:

      Plz don’t start until u get all info from a trustable person who knows about trucking. Or work by ur self before investing

    • Hi Tahseen,
      Where are you located actually,i am also looking to start a truck business in Canada,is it possible for you to share your email or phone number,so that we can chat and make future procedure for both of us.

      Thanks
      Vijay

      • Mirza says:

        Hi, Vijay / Tahseen. With a general degree, supply chain diploma, and some capital, looking for a start-up trucking business. How about getting together to share ideas.

        Mirza

        • Asad Khan says:

          Hi, Mirza, i Have an experience of trucking company, as i work in Trucking company atm, if you need more info, we can share some ideas, i am looking forward for more opportunities,

          Thanks.

        • Wilson U says:

          Is this suggestion still open or closed?

        • MARC says:

          Hello I was wondering if we could speak. My name is Marc and I have attended MacEwan for business management. I am looking into starting a storage, transport or cross docking company.

  5. Alex says:

    I have 4 trucks with four good drivers but I’m tired of getting burned by these courier companies .I want to start my own carrier company. Can anyone give some advice and where can I get the rates on how to charge customers.
    ..

    .

  6. Bruno says:

    I am French/Canadian from Bonaventure Quebec, living now in Toronto since 2011. I am a certified Heavy Equipment Operator with a DZ Driving Licence. Also a member of International Union Operator Engineer Local 793. I am working on starting a business in a small Transport company. For now, my idea is to buy a Truck F450/F550 with a Flatbed Overdeck Trailer.Not sure of the side, because of my DZ restriction!? Also no capital, so working for now on the business plan and will get a loan from a creditor interested in the idea. I wanted a professional company and my main goal will be the oil industry, will surely start with Load boards. If someone have any tips, any idea, or suggestion, please let me know, thank’s!

    • Rob says:

      Hi Bruno, I am in the same boat as you wanting to accelerate in the heavy-haul trucking industry. How could we connect to discuss ideas further?

      • Dory says:

        hi, Im wondering how you guys made out? Im looking to advance my ideas. Any reply would be welcome regarding this matter. Thanks

    • Kunal Khurana says:

      hey Bruno,

      I’m interested in the kind of start up you just mentioned but in food industry. So, it would be good if we converse and share insights.

      I’d be happy to be in touch with you at Khuranasoilpau@gmail.com

  7. Curt says:

    Great article!!! Good segue to consider maybe acquiring an existing transport business that has already overcame these obstacles and achieved success in the industry. If any of the readers are interested in acquiring an existing, well established transport business, please visit our website http://www.vralta.com
    This is an Edmonton based Long haul transport business serving western Canada

    • ASHRAF Ahmad says:

      Hi Curt
      I live in Vancouver and will be very interested in listening to what you have to offer.
      You can call me at 778.926.8696

  8. Mike says:

    Gents, I have the capital and a significant line of credit to purchase a few trucks right of the bat and commence a transportation/delivery business. I also have a couple of loyal truck drivers ready to come on board. Fully equipped office space with parking and loading bays as well as a dedicated accountant. What I don’t have and what I don’t fully understand is how to get a hold of those lucrative delivery contracts from suppliers and major chains, particularly ones that head to the States. Any info and 101 would be greatly appreciated. I’m based in Montreal. Thanks in advance. PS: Also wondering if it’s better to get drivers as independent contractors or as employees.

    • Asad Khan says:

      Hi,

      I work for trucking company, i have an experience of border crossing, dispatching, invoicing, well 70% of office work , i am looking for invest in trucking company. I can help you with that. if you can email me @ (asadkhanpk94@yahoo.com), share some ideas and lets see what can we do.

    • Yvan Richard says:

      Hello ,

      I am in the equipment leasing business and can discuss any financing options you may be interested in .

      Yvan Richard
      204-470-5447
      yrichard@clearwaterleasing.ca

  9. Jim says:

    Hi Guy’s and May I say Happy Canada Day To All 150 yrs is a long time and I must say Our Home is Looking Great .
    I am a Licensed AZdriver with many years experience and want to start a trucking company of my own I am looking for someone to help me or a possible partnership

  10. Eisa says:

    Hi guys, I’m looking to some information about roughly figure needed for starting truck company and how can I get long term contracts with customers to secure regular business coming out of these trucks.

  11. Manpinder gill says:

    Hi guys , I am looking to some information about needed for starting my own trucking company. Please anyone help me with good advice. PLEASE ANYONE I Really APPRECIATE. Thanks In ADVANCE.

  12. Jaipal says:

    Hi we are willing to start a trucking company but dnt have much information…. I would really appreciate if you guys can help..

  13. Nengi says:

    I am interested in forming a partnership with someone to open up a trucking business and start with one or max two trucks at first.

  14. Simran says:

    Hi Guys,

    If you are looking for free consultation for setting up your own trucking business, than contact me on simrancheemamail@gmail.com. We are based in Toronto and provide business consultancy, training and software to manage your current trucking business too.

    Have a wonderful day.

  15. Erick says:

    Can I foreigner by a Canadian Company and come and manage it in Canada? I am interested in buying a Tracking Business and running it in Canada

  16. Anil Thukral says:

    We are from India and will shortly be immigrating to B C Canada – We are in trucking business in India and interested to start the same in Canada . If anyone can offer inputs / provide consultancy for the same please reply .

    Thanks

  17. NTD says:

    Hi,
    I am looking for partner for buying existing trucking company.

    The company has 11 tractor trailers and the cost is 4 to 5 millions CAD.

    I am looking for investor as well as operators with Trucking background.

    Thanks

    NTD

  18. Ravenet singh says:

    Hi,need a very good advise a how to start a trucking company in canada (toronto and gta)as I see high very demand of this industry.someone experienced in this forte pls advise.

  19. A E says:

    Hello I am a 24 year old student studying Accounting. Since I was a kid I liked the idea of driving a truck and recently had two friends get interested in getting their Class 1 license here in Canada (Nova Scotia). I started to do research about it and gathered all the information I need to understand every financial/time aspect of the business. I study accounnting and dream of owning a business. My family I dont think will like the idea of me driving a truck since they are all University graduates and my father works as a University proffesor. Personally I love the idea and would like to get some advice from you guys. Two things worry me and keep me from quiting university and investing the money in getting my class 1 is that the money in trucking is in the long haul which means days and weeks away from family, second thing is that the first 5 years you wont make more then $100,000 a year ( or maybe even half that in Nova Scotia). What I would like to know can someone buy a truck after his first year and find local ( Provincial ) work and be home every night and make over $100,000 and if someone works hard is it hard to open my own company in the near ( Less then 10 years ) future.

  20. Don Benna says:

    Hi Everyone,
    I would suggest you guys to check out AVAAL. They help you start your business from the ground up, will provide software, training, and consulting. A true hassle free experience.

  21. Hello. Many thanks 🙂 Great article.

  22. Jay says:

    Hi!
    I am based in Ontario. I have come to know about small trucking business opportunity.
    Where I will be buying a used day cab truck and some trucking company will drive it ( they will have their own driver to drive it).
    I will be paying all costs like fuel, driver payroll, insurance( my vehicle will be insured by the trucking company under their insurance policy) and all of this will be accounted under xxxxx canada inc type of company, I will need to register.

    Can you experienced guys give me some comments/suggestions/ insights of business that how good this opportunity is? Shall I go for this or there are more chances of getting burnt than earning some profits? I am flexible and open to all kind of comments regarding this opportunity. Your comments and suggestions will be most helpful to me. Thank you very much.

  23. James says:

    Can I find a company that I can be haulaging for if I buy 2 numbers of 40feets heavy duty trailers?

  24. Lukas says:

    Anyone interested in opening trucking company in GTA (Toronto) area and start hauling inside/outside Canada?

    Have the capital, looking someone else with the capital and experience.

    Thank you

  25. Est says:

    I am planning on buying some sprinter van to start some expidite delivery business.
    I have been working for someone in this business for 8 years.
    But now I want to start my own.
    Can some one guide me on what licences i will need from the govt of Ontario to start my business?

  26. Ranjit says:

    Such a knowledgeable article.. these days trucking is becoming a big thing.. its hard to get a sound income for the first couple of years as a small startup in this extreme competition.. even hard to keep the customers and drivers in hand for first couple of years.. think twice before putting big savings in this business.. things are changing dramatically.. do your own research.. yes AVAL can help you to get in touch but most of the time they show you the one side of the coin.. be careful..

  27. Raj says:

    A very well written article. Kudos.

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