It’s no secret that growth in manufacturing and increased consumer spending is helping trucking. Commerce is accelerating at such a rate that companies are having problems filling cabs. This is good news for small-business trucking entrepreneurs.
Trucking is now officially the fastest growing small-business industry in the country. As the economy improves and options for small-business loans and financing expand, small trucking companies are filling a void.
The Winners
A financial analysis company called Sageworks released a report this month that shows two kinds of small trucking businesses posting big jumps in revenue. The study looked at the 12-month period ending May 31 and was based on a breakdown of financial statements of small trucking companies who have a revenue of less than $5 million.
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General freight trucking, which covers a wide range of merchandise transport, was at number one on the list, reporting a nearly 25 percent increase in sales. At number two was building and construction, with a 19 percent rise.
Coming in third was specialized freight trucking, at 17 percent. This category covers tankers and refrigerated trucks.
It should be no surprise that the report shows trucking’s momentum strongest in California, which is home to one of the biggest trucking associations in the nation. According to Shawn Yadon, chief executive of the California Trucking Association (CTA), “trucking is one of the great entrepreneurial opportunities.”
Trending Up
The report shows that trucking is on a financial upward trend. This uptick can be highlighted by looking at manufacturing and consumer spending.
Industry momentum was underscored back in May when the American Trucking Associations (ATA) reported that the industry topped $700 billion for the first time in history. As ATA chief executive Bill Graves stated, “trucking is, and will continue to be, the dominant way to move goods in this country.”
With the industry struggling with a shortage of 35,000 to 40,000 truck drivers, entrepreneurial opportunities for ambitious investors are coming in waves. David Gilbert, the CEO of National Funding, reported “seeing fundamental growth” in the transportation-related small business loan sector.
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Are you thinking about possibly going into business for yourself? Trucking is full of opportunities. There are several key factors that you must keep in mind before you begin the adventure.
Understand Regulations
First, make sure you fully understand all the rules and regulations involved with trucking. Yadon of the CTA emphasizes the need to “go through the proper channels.”
If your potential trucking company will be operating in multiple states, it is prudent to check the website of the Federal Motor Carrier Association (FMCSA) to get information on state and federal requirements.
The first step is in getting a USDOT number, which will be used to track your small business operations in connection with safety audits and inspections.
Vehicle Plan
Next, you’ll want to develop a clear plan for buying and maintaining your trucks. The estimated cost for a truck ranges from $50,000 for a used model to $150,000 for a brand new truck with all of the bells and whistles.
It is important to understand the investment going into the vehicles. Will you routes take the vehicles over treacherous mountain passes? This is something to consider when shopping for trucks.
Having a solid vehicle plan includes a game plan for maintenance and preparation for any breakdowns. Managing good, quality vehicles and planning for downtime means there won’t be any hiccups in the operation.
Community Involvement
If you are looking to dip your toe into any market, it’s wise to reach out to others in the business. Try looking for local or regional trucking associations. Tap these resources for information and startup assistance.
As an example, CTA members get access to special programs, exclusive deals for equipment, legal services, and financial information. If you are looking to purchase or lease trucks, those already in the business can usually point the way.
The trucking industry has a lot of momentum. As the economy grows, you’re likely to see another uptick later in the year. If you are looking to start a business with serious growth potential, take a look at small business opportunities in trucking.