How to Create a Trucking Business Plan in 10 Steps
If you are hooked by the name of this article, chances are that you are either seriously considering starting your own truck business or at least fascinated by the prospect of it. The good news is you are in the right place at the right time because today we are going to discuss the vital factor of a successful business. As with any other outset in life, it is crucial to have a step-by-step action plan to be guided by. No matter what stage of business foundation you are at right now, learning about the nuts and bolts of a business plan for a trucking company is equally important to every future carrier.
- What Is A Trucking Business Plan?
- The Importance of Business Plan for Trucking
- Components of a Trucking Business Plan
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10 Steps to Create a Trucking Business Plan
- Ensure your business is legal
- Choose a name
- Define the target clients
- Perform market analysis
- Define what staff you need to hire
- Craft a marketing strategy
- Prepare financial projections
- Make funding requests
- Organize an operational plan
- Show your readiness to grow and develop
- Conclusion
Below, we will cover the following aspects of the topic: the definition of a trucking business plan, the reasons why it should be treated seriously, its main components, and the practical steps of crafting the plan. If owning a freight forwarding enterprise is still a dream for you, we aim to introduce you to the industry landscape and its features. It will help you decide whether you want to direct your life that way and think of your next moves. In case you’ve already made up your mind to start providing transportation services, this brief guide may become the springboard for making your dream come true!
What Is A Trucking Business Plan?
A freight trucking business plan is a written outline of the way you are going to establish, promote, operate, and develop your company. It is a multilayered document that includes various aspects of the trade — starting from ‘hardware’ such as your initial assets, vehicles, equipment, and workforce, continuing with the legislative and financial realms, and eventually, it encompasses the ‘software’ elements like a set of corporate values, purposes, and missions. The ultimate goal of a business plan is to ensure that your activity will turn out feasible and lucrative.
Before you start sketching your plan, remember that the key principle is to skillfully balance high ideals with the down-to-earth peculiarities of the industry. The freight market is quite a crowded, fast-paced place that may put a newcomer under strain. Nevertheless, a passion for trucking combined with a thorough business plan will surely pay off sooner or later. Having a substantial strategy will not only show you the right way but also accelerate your growth as a professional. If you want to become a significant player, you should never neglect the importance of planning things beforehand. Let’s see why writing a trucking business plan is so indispensable.
The Importance of Business Plan for Trucking
A business plan serves numerous purposes. The most obvious one is being a literal instruction that shows you what tasks to perform. Usually, once one launches a freight company, they have to accomplish a list of necessary assignments before they can proceed with actual business activities. It is very convenient to have a list of tasks of the utmost importance in front of you. No one wants to find out that there is some mismatch in their business registration right after the business starts gaining momentum, right? The plan is a great assistant for keeping things in order, scheduling your working routine effectively, and just staying motivated.
Wise finance management is another essential factor that you need a business plan for. Before starting a company, you will want to estimate your current assets and compare them to the necessary investments. If any supplement funding is needed, it should also be noted in the plan. Once you evaluate your capital, you will want to analyze the market conditions and therefore calculate your approximate income.
Components of a Trucking Business Plan
- Executive summary. It is a brief yet informative intro meant to keep readers’ attention. The summary displays your personal motivation for starting a trucking business. The more intriguing the summary is, the more likely the potential investors, partners, and clients will notice you.
- Company description. In this section, you should narrow down to the specific features of your company. You will want to include the commodity type you will chiefly haul, the areas and states you are planning to cover, and who your target customers are. The description should not necessarily be extended, but it should demonstrate that you have a definite vision of your future actions.
- Operation plan. Here you need to specify the ways of managing the business. Indicate where you will establish the company headquarters, how many drivers and vehicles you can operate, and who will be in charge of dispatching. You can also provide the load boards that you prefer, the way of handling accounting, and any other details you feel are important for the business.
- Market analysis and marketing strategy. In this paragraph, you need to demonstrate your knowledge about the niche you are planning to work in. Input your competitor analysis, and present the ideas of gaining recognition in the market. It is crucial to include your main methods of advertising. Besides, think of ways of retaining customers’ trust aside from just gaining it. You will want to show that you are a serious farsighted entrepreneur who is open to long-term cooperation.
10 Steps to Create a Trucking Business Plan
Now’s the time to review the universal steps to create a trucking business plan.
Ensure your business is legal
There are concrete federal regulations for trucking businesses in the US. It makes no difference whether you wish to create a large chain business or remain a self-dispatching owner-operator. In each case, it is obligatory to apply for an EIN from the IRS, set up an IFTA account, obtain DOT and MC numbers, file a BOC-3 form and a UCR application, and get insurance.
Choose a name
The importance of the name for any business cannot be underestimated. It identifies and highlights your company among thousands of others. Better if it conveys a meaning and corresponds with the objective of the company, the region of the expedition, or the attitude, ethics, and worldview your team shares. To strengthen the name itself, you can pick a logo that mirrors the credo of your business.
Define the target clients
It is important to educate yourself on the current market conditions and communicate with more experienced carriers to decide who you can realistically work with. Will it be large manufacturing companies or maybe new promising enterprises? Also, you need to decide whether you want to run interstate loads or stick to local ones because the procedures of registration, drivers’ hours, and profit differ between those. Once you select your niche, it will be much easier for you to structure your marketing strategy according to your goals.
Perform market analysis
Investigate the stories of the most successful carriers in the sphere, and find out what their pros and cons are. Besides, you will want to check on general industry trends and forecasts. Then you can come up with specific qualities and services that will distinguish your business.
Define what staff you need to hire
The choice depends on the size of the company – you can either build a ‘one man company’ (i.e. be an owner-operator) or hire more drivers to form a small or large fleet company. If you already know whom to hire as drivers and dispatchers, point out why these people are competent and what you can offer them for further professional growth. Some truckers assemble their dispatch team by themself, while others choose to cooperate with experienced companies like Logity Dispatch.
Craft a marketing strategy
Depending on the type of company you want to establish, you may choose advertising on industry-related websites, cold calls, mailing lists, social media marketing, or attending offline trade events. Usually, a grand marketing campaign is needed to promote large fleet businesses, but having a skilled dispatcher and maintaining a good reputation will be enough for a small company.
Prepare financial projections
Learning how to calculate cost per mile, and selecting loads according to it is crucial for your profitability. Think of the best ways to manage finances efficiently. Usually, entrepreneurs use a five-year financial plan; however, you may prefer any other method convenient for you. The main thing is to be able to monitor your expenses and revenues so that you don’t make chaotic decisions and keep your finances under control.
Make funding requests
This part is necessary for those who plan to lend money, lease trucks instead of buying them, or use the help of third-party dispatch services or accountants. As with our own budget, it is essential to keep track of all your loans, percentages, employee expenses, and overhead costs. This section must include a cash-flow statement, sales forecast, profit, loss, lease truck payments (in case you rent the trucks), insurance, taxes, and a balance sheet. The ways of attracting investors and partners should be described here as well.
Organize an operational plan
Now you need to consider the most practical aspects of the job — fleet management, hiring process, installing the necessary software and programs, investing in paid subscriptions, and so on. If you are an aspiring business owner or driver seeking professional dispatching help, visit Logity Dispatch. We are a dedicated team with 9 years’ experience in providing top-notch dispatch services, and will not let you down!
Show your readiness to grow and develop
Consider taking special trade courses, watching thematic videos, listening to podcasts, etc. Also, always keep a ‘Plan B’ in reserve so that you know how to make your business thrive again even after finding yourself in low water.
Conclusion
To wrap everything up, a trucking business plan is the showcase of who you are, especially in the early period of operating. Given that you haven’t gained any reputation yet, you need to apply alternative methods of building customer trust and attracting investors. If you need additional financial aid to launch your business, then it is even more crucial for you to demonstrate why investors should prioritize your company over the others.
Creating a plan is important not only at the beginning of your freight transportation practice. It also will help you achieve more in the long run because it is the most precise criterion for tracking your personal progress. Once you start noticing drawbacks in your original strategy that hold you back from desirable profit or recognition, the plan may help indicate where the malfunction lies. Then it will be easier to make necessary amends and improve your results.
The last, but not least thing to keep in mind is that a business plan is nothing static. The trucking industry is a purely dynamic phenomenon, that’s why you need to embrace open-mindedness and flexibility to keep yourself afloat. Fortunately, a solid plan will always be there to help you.
