Perhaps you’re an experienced truck driver. Maybe you’ve just got your HGV licence having spent years in the logistics business. Or does the industry simply spark your entrepreneurial spirit? Whatever has inspired you to start your own freight business, you’re safe in the knowledge that it’s a blossoming sector and one that always has a customer wanting to get something from “A” to “B”. But where do you start?
Have a clear goal in mind. Are you planning to run a freight-only business or are you wanting to establish a logistics capability? Are you dealing with a domestic product or importing and exporting? You need to be clear-sighted and consider what you want the business to be and, importantly, where your ambition might take you in future.
Registering the business
You’ll have to officially register the business and to do so you’ll need to know which business structure you’ll be forming. Once you know what service you intend to provide, an accountant or legal representative will be able to detail the various risks associated with the type of business you run. Many in the industry opt for either a corporation or limited liability company.
Taxes and the United Carrier Registration
Once the business is registered and you’ve paid the relevant fees, you’ll need to comply with IRS rules and get a federal tax identification number. This will enable you to pay employees and use business bank accounts and gain credit. As a carrier of goods, you must also apply for a UCR (Unified Carrier Registration).
Registering with the Department of Transportation
You’ll be regulated under the Department of Transportation (DOT) so you’ll need to let them know you’re operating. This is done by acquiring a DOT number from the Federal Motor Carrier Safety Administration. If you’re crossing state lines, you’ll also need an MC number from the interstate Operating Authority. DOT numbers are temporary for businesses at first and require you to undergo a period of observation to check compliance and standards. If passed, your DOT will be permanent.
All businesses need insurance. In the freight industry, you will need a surety bond and general liability insurance that also covers cargo. A commercial lines insurance agent will be able to help in regards to specific state guidelines. You’ll also need to ensure you remain on the road to service your customers. Handily, you can buy commercial auto insurance online to cover you against damages and injury and give you peace of mind that you’ll have a vehicle to continue running the business.
Build Your Fleet
If you’re lucky enough to own your own vehicle then you’ve made a good start. Let’s face it, you probably won’t be beginning with a large-scale fleet of multitype trucks and vans. But if you need to make an investment, you’ll need a vehicle that suits your purposes. That goes back to the services you’re offering. Are you carrying lots of large, heavy items? Or perhaps you’re carrying sensitive documents that require additional security? Or maybe you’ll be transporting supplies that need specific temperatures such as food or medicines? All these considerations will impact your choice when picking the right vehicle for you.
Now you’re about ready to open for business. From here, it’s down to you to offer a quality service that offers consistently high standards. For a new business, building a reputation is the hardest thing to do but it’s crucial to success.