There has never been a better time to start a trucking business. With the increase in the demand for freight services and an ever-increasing driver shortage, you can use these situations to establish a booming trucking service. If you look at recent studies, you will notice that many investors are joining this industry. Besides, many businesses have never taken off because they lack capital.
One of the most important questions to ask yourself before starting a trucking business is whether you can meet the costs. You will notice that the costs vary depending on the size of business you want to start. However, some costs are constant regardless of the nature of your business. Because of this, it is good to find out the amount that you need before starting a trucking business. Usually, you will have to consider some factors that apply to your state.
Most people often think about the amount of money that they need to purchase stock. Looking at Iveco Eurocargo 4×2 in Truck1’s stock, you will notice that there are other important factors that you cannot overlook. A successful business is one that takes into consideration all the factors that affect the operations. Here are some of the things that you should consider when calculating the amount that you need to start and run a trucking business.
Variable and Fixed Costs
Fixed costs include things such as regular maintenance, yearly permits, and the cost of your truck unit. Variable costs include fuel, repairs, and fines. It is estimated that 70% of your operational costs will go to variables. This is because the fixed costs can be determined before you even have to pay for them.
The Us Dot Number Costs
For $300, you can get a US Dot number. Usually, the Department of Transport issues this number to companies that offer trucking services to interstate customers. It is a number that will help you to facilitate many things relating to your business, and therefore, you have to acquire it.
Costs of Registering Your Business
Business registration is the other thing that you must do before you start a trucking business. The cost of registering a business varies depending on the state of listing. On average, you will need $500 to cover for the entire costs related to registering such a business.
Cost of Unified Carrier Registration
Unified Cover Registration (UCR) cost for two vehicles can be up to $69. For three to five vehicles, you will have to part with up to $206. If you want to be sure of the exact amount that you will have to pay, you may want to visit the UCR website.
Cost of Buying Vehicles
When it comes to buying new vehicles and equipment for your trucking business, you need to choose between new and used. Regardless of what you opt for, you have to make sure that the equipment is in excellent condition. A truck can cost anything between $15,000 and $175,000.
Insurance is among the most significant fixed costs for trucking businesses. Insurance costs are determined based on a myriad of factors including the age of your trucks. You can pay up to $10,000 per truck annually depending on the condition of your vehicles.
Cdl License Endorsement
You or your trucks may have to add some endorsements on the CDL License to make it more effective. These endorsements are issued by several bodies, and they can cost up to $100,000.
Leases and Taxes
If you opt to lease your trucks and equipment, you have to factor in the costs of getting them. Different companies lease trucks at varying costs. The same applies to taxes.
As you can see, determining the total costs of starting and running a trucking business depends on a lot of factors. You need time to arrive at the exact amount after thinking about your situation.