One of the unique opportunities we have here at Barbee Jackson Insurance is writing insurance for new ventures. We enjoy talking with customers that have made the big decision to start their own business. Starting a trucking company is a gamble just like any other business venture. Really good preparation can help swing those odds in your favor. It is important to research the type of cargo you are going to carry, the area you plan to operate in, the cost of insurance and etc. You should also make sure that anyone that holds a CDL (Owner or driver) has held that license for at least 2 full years. There are a lot of small steps to starting a trucking company or any company for that matter. I am only going to list the larger steps in this article but we understand there is a lot going on between the lines.
Decide what kind of cargo you are going to carry
This is a very important decision because it affects your entire business.
Different types of cargo come with different rules. The FMCSA has specific rules for those clients hauling hazardous materials. There are different rules and exceptions for clients that haul livestock. There are several rules and requirements for clients that haul household goods. These are just a few examples. It is important to decide ahead of time what you are going to haul. This is essential for the next steps.
Create a business name
You can run your business as a sole proprietor (John Smith), as a sole proprietor with a fictitious name (John Smith DBA Smith Trucking), or you can run your business as a corporation or LLC (Smith Trucking Inc, Smith Trucking LLC). It is up to you how you want to set up your business but it is important to make this decision early.
Apply for a DOT number and possibly an MC number at the FMCSA
Almost all truckers are required to have a DOT number. There are a couple of exceptions but 99% of the truckers we insure have a DOT number. Applying for your DOT number is a bit complicated but very doable online. You will want to make sure you answer the questions as accurately and honestly as you can. Barbee Jackson Insurance has created a video to help our clients out with this task. I will include the details for that video in the references section at the bottom of this article. This next sentence is extremely important.
Many of the clients I speak to will tell me that they applied for the MC number because they thought “Why not.” This can make a huge impact on your insurance costs down the road. The cost to insure a customer with just a DOT number is THOUSANDS less than insuring that same customer if they carry an MC number as well. If you are going to be crossing state lines and you need an MC number that is fine. It is just very important that you only apply for an MC number if you need one.
Pick out a truck you might like to buy but DON’T BUY IT YET
Many of our clients that are starting their own trucking business will do so because they have found a great deal on a truck (truck tractor, dump truck, etc.). It is very important that you get a good deal on your truck. However, signing a contract or writing a check to purchase a truck is something you only want to do after you have completed your budget. Once you have picked out a vehicle you might like to buy you will want to write down the year, make, model, VIN and value of that vehicle. You will need this for the next step.
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Call Barbee Jackson Insurance for an insurance quote
For us to accurately quote your insurance we will need all the information above. We will need your DOT number. If you plan to cross state lines and therefore had to obtain an MC number we will need that as well. We will need your business name and address. We will need owner and driver information. Lastly, we will need the year, make, model, VIN, and value of your truck. Once we have all of this information we should be able to provide you with an accurate insurance quote.
If you have followed all of the steps it should only have cost you about $360 to get to this point. That is the cost of submitting the DOT application and obtaining your DOT/MC number. You should now be able to use the information above to put together a reasonably accurate budget going forward. If you decide at this point to cut your losses you have only invested $360. Now if you have calculated your budget and you are ready to move forward all that is left is securing your insurance, securing your vehicle, and getting on the road.
Resources:
The link to our DOT application video is listed here.
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