ROAD TRANSPORT IS ONE OF THE LARGEST AND MOST PROFITABLE INDUSTRIES IN THE UNITED STATES.
Without small transportation companies and the drivers who work for them, the economy would literally be paralyzed.
So why not enter an industry that will always be in high demand, such as road transport, when you start your own lucrative transportation company?
Before you start, it’s a good idea to take the time to develop a basic business plan that covers the type of equipment you need, if you plan to buy or lease that equipment, and who your drivers will be. You can obtain your equipment after having an insurance coverage plan, but it is important to know the type of equipment you want, since you must know the associated costs before starting this process.
Believe it or not get equipment and insurance is just one piece to start your own transportation company! There are many other steps to start and manage a transportation company, and it can be a confusing process.
WITH THESE SEVEN STEPS YOU CAN PREPARE YOUR TRANSPORT COMPANY FOR SUCCESS AND ALSO STAY ORGANIZED.
1: FORM YOUR TRANSPORTATION COMPANY AND OBTAIN TRANSPORT AUTHORITY
To start a transportation company, the first thing to do is obtain the United States Department of Transportation (USDOT) number and the carrier’s operating authority number.(MC) of the Federal Motor Carrier Safety Administration (FMCSA). Along with insurance, equipment purchases or leases, and other required filings and registrations, the process can be long and complicated. Services like the Apex Startup Program, help you start your own towing company. We take care of the tedious parts by collecting all the necessary information, helping with the formation of the entity in its state of origin, completing and filing the appropriate registration applications. Once your transport company has active authority, we will send you a log book with all the documentation organized and ready to use.
2: FIND LOADS TO TRANSPORT
If you are new to the road transport industry, online cargo bags can help you find the load so you can start transporting. You can try freeing cargo bags, or paying a monthly subscription on other cargo bags. Cargo bags can help you create and establish relationships with a variety of intermediaries and shippers. Once you have a solid customer base, you can take advantage of those relationships and, in some cases, start transporting directly to your customers and establish your own lanes, which generate a stable regular income.
3: CHECK THE CREDIT REGULARLY
Checking your customers’ credit regularly before transporting a load is one of the best habits and helps you evaluate intermediaries and shippers. Doing so will help you feel confident that your clients will pay regularly. Subscriptions to credit services are available, but they can be expensive. To maximize your efforts, try to choose loads that pay more per mile, not necessarily faster. When factoring with Apex Capital, you get unlimited free credit checks, which can help you make the best decisions for your transportation company.
4: KNOW YOUR EXPENSES
It is important to know the commercial expenses of your transportation company. A profit and loss statement or accounting software are two of the most effective ways to track insurance payments, maintenance and repair of trucks, financing payments for trucks and trailers, fuel, office expenses, salaries and other monthly expenses. You can even track tax deductions, which can help you save money. When you have all the expenses of your company in one place, you will know exactly how much it costs to manage your business. Knowing how much it costs to manage your transportation company is necessary to ensure that your business is profitable. Setting a minimum amount for your cost per mile will help you to never get paid below your cost or to fall short of a load.
5: SAVE MONEY ON FUEL
The fuel can be up to 40% of the operating expenses of a transport company. Getting a fuel card can help you control and manage your fuel purchases and save money on the pump. When you use a fuel card, such as the Apex fuel card , you always get the cash price or better, including additional discounts, at thousands of truck stops. The use of a fuel card also gives you other benefits, such as fuel management tools, IFTA reporting information, fuel theft protection, and more.
6: MANAGING CASH FLOW
As a start-up company, you have just spent a small fortune to pay your insurance premiums and finance or buy your truck and now you must wait 30, 60 or even 90 days for your customers to pay. You may not be able to access a line of credit from a bank to keep your trucks running. As an alternative to bank financing, a factoring company can provide you with operational cash flow by purchasing your transportation bills. Freight invoice factoring is an intelligent way for small and medium-sized trucking companies to manage cash flow and keep their trucks on the road. Instead of waiting for your client to pay, the factoring companies will advance a percentage of your load the same day you deliver,
7: GET OFFICE HELP
If you are starting a transport company as a small operator or owner operator, you should take the time for documentation and contact your customers to make the payment. If you do not have good systems, this can take up a lot of time that you must devote to managing your transportation company. Having a partner who can handle bureaucratic procedures and collection simplifies this process, so you can spend your time concentrating on administrations. One of the benefits of factoring is that your factoring company manages the collections of your clients for you. Just be sure to work with a factoring company that treats its clients in a professional, courteous and civil manner.