business plan

Last Updated on August 24, 2021

If you have an entrepreneurial spirit and a passion for trucking, you may have considered starting a trucking company. However, owning a business is a challenging task if you don’t have a plan.

A business plan can help you define your company’s mission to get investors, loans, partners, and employees interested. You will prove to people that you are serious about trucking and want to learn and grow in the industry.

By writing a comprehensive business plan, you can more effectively convey your company goals. They will help you determine your company’s unique qualities and how you can succeed in the foreseeable future.

When writing a business plan, you will want to keep a few pointers in mind to include in the final copy. Here are some strategies to help you start and run your trucking company.

Picking a Name

One overlooked aspect of starting a successful business is choosing a fitting name. No matter the quality of your services, an unappealing name will detract customers.

To pick a name, brainstorm words that you associate with your business. Try to work with a group of trucking enthusiasts to ensure your ideas relate. Anything goes at first because you can narrow them down to your favorite words.

Some common trucking company names include:

  • Family names
  • Freight types
  • Location-based names
  • Plays on words
  • Unique name inspired by your company’s personality

You will need to know the purpose of your business when choosing the name. If you want it to carry on through family generations, your surname could be the name. Those who specialize in hazmat, heavy-haul, or reefer may desire these terms in the title.

Companies that operate in one area might want to include that in the name to attract local business enthusiasts. Some more memorable titles include plays on words, metaphors, trucking references, and company culture allusions.

If you can picture the name on the side of a truck, you might have a winner on your hands. Make sure people can pronounce and remember it by avoiding anything long-winded. Also, try to come up with a logo.

Before registering your corporation, LLC, or partnership, check with the US Patent and Trademark Office to guarantee that you have a unique design.

Selecting a Target Market

You can select a target market for your trucking company by defining your goals. Specializing in too many markets may open the door to more customers, but it will lower the quality of your services. Ensure you choose a specific focus for your target market to deliver excellent business and maximize returns.

The various types of trucking companies include:

  • For-hire truckload carriers
  • Household movers
  • Intermodal
  • Less-than-truckload carriers

For-hire truckload carriers haul the freight of manufacturing companies. These businesses lend drivers, trailers, and trucks to others, but they do not make anything themselves. Customers often hire household moving companies to pack, load, move, and unload their home’s items. This job is labor-heavy but typically in high demand.

Intermodal trucking companies will haul rail containers from the rail yard. A truck driver takes the freight to the rail yard, where a railway will move it to its final destination. There, another truck driver transports the goods to the customer. It has a lot of hands-on involvement, but starting this business works best if you live near a rail company.

Less-than-truckload carriers (LTL) deliver small products to homes and businesses at once. The drivers schedule the delivery to homes or have the customer get them from a distribution center. These companies have line haul and city drivers.

Competitive and Market Analysis

Your business plan needs a market analysis to show your expertise in the industry. Writing it will inform you of any trends, demands, and areas with the most success. Try to include these topics in your market analysis.

  • Competitive Analysis: research similar trucking companies and describe the advantages and disadvantages of their business model
  • Distinguishing Characteristics: explain your target customer’s needs and how you can fulfill them
  • Gross Margin and Pricing Targets: figure out your margins, pricing structure, and discounts
  • Industry Description: summarize your share of the trucking industry, determine its size, and name your primary competitors
  • Market Share: calculate how much business you will gain within a year and explain how you reached these conclusions
  • Regulatory Restrictions: analyze government regulations to see how they would affect your business
  • Target Market: find your specialization and focus on the types of customers you believe you can satisfy
  • Target Market Size: provide an in-depth analysis of your target customers

Use multiple resources to locate this information, and make sure to cite them. You want this report to show your authority on the topic, so don’t skimp!

Determining Your Competitive Edge and the Services You Offer

To stand out from other trucking companies, you will need to get a competitive edge. Analyze your experience to see where your strengths lie. If you worked as a driver, use your track record to prove your safe practices.

Even indirect experience like working as a committed employee can help. Reach out to your former employers to provide any references or connections to build your reputation and authority.

You can draw from your experiences to determine the services you wish to provide. Ask yourself some of these questions:

  • What kind of freight will I haul?
  • What equipment do I need to handle this freight?
  • Will I operate intrastate or interstate?
  • What type of trucking company do I want to run?
  • Will I stay in one location or travel far distances?

Once you figure out the services you wish to offer, you can research the products you need before you can help customers. Look into financing, insurance, logging, and testing providers. Also, check out fuel services and the Federal Motor Carrier Safety Administration guidelines.

Determining Your Rate-Per-Mile and Cost Structures

Your rate-per-mile determines how much you will earn for each mile you travel. Calculating your target rate-per-mile can help you figure out the type of business you want to run. First, estimate your ideal monthly profits. Then, divide this number by how many miles you wish to drive each month. Aim for a number about 10-15% higher than your break-even point, or the amount you need to make to cover your expenses.

Next, you should figure out your cost structures. You can do this by calculating the labor, equipment, and hours that go into completing a task and charging an amount about 10-15% higher for each service. You can earn a modest profit without overcharging your offerings.

Marketing and Sales Strategy

Your marketing strategy features your tactics to attract new customers and retain them. A vital aspect is your advertising channels, such as social media, email, websites, internet ads, commercials, and trade publications. Write how you will use these methods to reach potential consumers.

Look to see if your marketing strategy requires costly purchases or acquisitions to calculate the affordability of your ideas. Also, include what regions and industries you will market to with your promotional materials.

A sales strategy describes your sales force. Consider if you want to use independent salespeople or hire ones yourself. Also, determine how you will identify a potential customer and how you can get their attention. Then, calculate your sales team’s closing rate to see if you can reach your company’s goals with your current techniques.

Financial Projections

The financial projections section features information concerning your financial statements and profitability. You will want your cash flow, profit, loss, balance sheet, and sales forecast included. Also, create a five-year projection and write how you will meet your goals.

A five-year goal should align with your current performance and any changes you plan on implementing to expand your profits.

Once your business is established, you can consider other cash flow financing options like factoring invoices, also known as freight factoring.

Employee Plan

Your business plan should discuss who you need to hire. Trucking companies can be any size. A simple model may only have you and your truck acting as an owner-operator. You may want to expand your business with qualified drivers, multiple trucks, a sales team, office support, or dispatching.

If you have clearly defined company goals, you can readily create an employee plan. Figure out the amount of capital you can spend on hiring people and make a budget for how much of your profits you will spend on others.

Management and Organization

You can manage and organize your trucking business with computer software that you update regularly. Services like TruckingOffice or other accounting software can help you keep track of your payments, invoices, dispatch, fuel, truck maintenance, expenses, rate-per-mile, and mileage.

You could also do the math by hand, but a program can help you keep everything in one place.

Conclusion

Writing a trucking business plan is a tedious yet necessary task when starting a company. By including varied information about your organization, goals, competitors, profits, and employees, you can attract investors, partners, and customers.

Business plans build industry authority and help you become a trusted provider of trucking services. Try to update your plan once a year to stay on top of your business and expand it further.