How To Start And Grow A Profitable Box Truck Business

If you love spending time on the road and seeing new sights, then starting a box truck business may be right up your alley.

Box trucks are great for transporting all different types of cargo, which will be sure to keep you on your toes. Let us share with you our top tips for not only starting your box truck business but growing it as well.

Box trucks are well-known as extremely versatile vehicles that can transport a large array of cargo across many different industries. These enclosed trucks keep cargo safe from the elements and are highly preferred by many e-commerce shippers.

Opting to start and run a box truck business comes with many benefits.

With the stark increase in online commerce following the COVID-19 pandemic, many businesses are looking for box truck transport more than ever before.

By investing in a box truck, you can cash in on shipping a variety of items and enjoy the added benefit of being able to transport multiple shipments at once.

You can learn here what is a box truck and what are they used for.

Before you dive into establishing any new business, you want to weigh the pros and cons. These will help you to prepare for the challenges that come with this industry and look forward to the many benefits that it provides.

Box Truck Business Benefits

1. Small Up-Front Investment: when you opt to start your own box truck business, you can enjoy doing so with a small up-front financial investment. For the most part, you'll simply need to buy an appropriate vehicle and insure it.

2. Heavy demand: with e-commerce shopping on the rise, there's always a steady demand for new jobs for box trucks. The best part is that you can transport a variety of cargo because you have a fully enclosed truck.

3. Owner Flexibility: when you decide to start your own box truck business, you get the great benefit of being your own boss. You can set your own hours and decide which jobs you want to take.

Box Truck Business Downsides

While starting your own box truck company can be a great way to become your own boss and set your own salary, there are some challenges you'll need to deal with.

From constantly fluctuating gas prices to business registration fees, you'll need to prepare yourself properly.

1. Fluctuating Gas Prices: It's important to remember that fuel is a large expense for a box truck business. When gas prices are low, your profits can be high. However, when gas prices increase, they take a good chunk out of your profits.

2. Maintenance and Registration Fees: Unlike working as a driver for someone else, when you open your own box truck business, you're responsible for all registration and licensing fees. Additionally, you'll have to pay for truck maintenance, repairs, and insurance on your own.

How Much Do Box Truck Owners Make?

Before getting into any industry, you need to know what it pays. According to CLIMB, box truck owner-operators make
between $93,303 and $196,156 a year in the United States. The average annual salary is reported to be $127,321.

It's crucial to realize that your actual business salary is going to depend on a number of varying factors. Some of these include:

• Your geographical location
• Number of drivers and trucks
• Years of experience
• Type of cargo transported

What Do You Need to Start Your Own Box Truck Business?

To start your own box truck business, you'll need to not only have a truck but also meet the legal requirements that go along with this transportation business. The most common necessities include:

• Business Registration
• FMSCA Credentials
• Box Truck
• Box truck insurance coverage

To help you get started, we describe each step that you'll need to take in detail below.

Before you decide that the box truck industry is for you, you need to understand how much it's going to cost you to start up.

Not only will you be required to pay for a truck and insurance, but you'll also need to pay to register your business and so forth.

Most typical box trucks range in price depending on the class size that they fit in. On average, the prices are as follows:

• Classes 2 and 3 - $25,000 to $45,000
• Class 4 - $35,000 to $50,000
• Class 5 - $45,000 to $70,000
• Class 6 - $50,000 to $90.000

You may opt to lease or buy a box truck for your business. Either way, you'll need to factor in the monthly costs to ensure that you're going to be making enough money to cover your payments.

Additionally, registration and business permit fees will run anywhere from $900 to $1,500 or more.

It's best to sit down early on and write up a business plan. This is a description of the type of box truck business you plan on creating and what your ultimate goals will be.

You should explain the size of truck(s) you plan on having and what type of cargo you can transport.

A business plan is necessary for myriad reasons. One of the most important is to consistently keep you on track with making business decisions based on what you've established as your business plan.

Without one, you may not have an end result in mind and may make financially unfortunate decisions.

Additionally, a business plan is typically necessary for lenders to approve you for any type of business financing. By having your small business plan ready, you can apply for financing at any given point in time without worrying about preparing one.

When it comes to your financial plan, you need it to fully understand where your financing is coming from and be able to explain that to lenders and others who need to know. As a best practice, your financial plan should include both expected and unexpected expenses.

A commercial driver's license (CDL) is necessary for most box trucks. Federal law requires anyone driving a box truck that has a gross vehicle weight (GVW) of over 26,000 pounds to have a CDL. You can obtain this license from your state's Department of Motor Vehicles.

There are various different classes of CDLs that you need to be aware of depending on the specific type of box truck you plan to drive and the weight and type of cargo that you plan on transporting. These range from Class A to Class C.

Additionally, there are various endorsements that you can get added to your CDL. For example, to haul hazardous materials, you need to pass the hazardous materials endorsement test.

In order to take jobs and pay yourself and other employees, you need to establish an official business. There are four main types of business entities to choose from:

• Sole proprietorship

• Partnership

• Limited liability company

• Corporation

To register your new business, you'll need to apply for an operating license from your Secretary of State's office.

Most offer a convenient online registration process for a set fee. You'll need it to set up your business to pay taxes, raise capital, and even open a business banking account.

To set up your taxes, you'll need an EIN. This stands for Employer Identification Number, and it's a unique code given to your business for mainly tax purposes. You can easily obtain an EIN from the IRS online.

The Federal Motor Carrier Safety Administration (FMCSA) is the agency in charge of licensing and permits for motor carriers. Once you obtain your CDL, you'll need to apply for both an MC and a DOT number.

The Department of Transportation will issue your DOT number, which is a unique identifier for your company.

The FMCSA will issue your MC number, which gives you proper authority to transport regulated commodities in interstate commerce. You can apply for both of these numbers online at the FMCSA website.

If you plan on transporting cargo from one state to another, then you'll need to register as an interstate carrier.

This requires you to obtain an IFTA (International Fuel Tax Agreement) license and display the decal on all of your trucks.

Depending on the specific state that you register your business in, you may have to apply for a general business license. You can get this particular information from your state's Department of State websites.

Additionally, you'll want to check with your local government or municipality to determine if they require any additional licensing.

If you're going to be doing interstate transport, then you'll need to establish a processing agent in each state in which you do business.

This process agent will be responsible for receiving any legal documents for your business within the state that they're registered.

It's important to note that each person may only be registered in one state.

You'll need to submit each person's information to the FMCSA via the BOC-3 process agent form. You can file these forms online for your convenience.

Getting a good trucking CPA is like having a reliable GPS on a long journey. When you're just starting a box truck business, you need to know where your money is going, and that's where a CPA comes in.

They know the trucking industry inside out and understand the specific challenges truckers face. They can help you navigate through tax codes and regulations that might be confusing for a newcomer.

When it comes to taxes, a trucking CPA can save you a lot of trouble. They know the deductions and credits that apply to us truckers, ensuring you don't pay more than you should. This can make a real difference, especially on long trips.

They can also set up a system to keep your financial records in order, reducing stress for you and giving you more time on the road. They'll help you track expenses, income, and important documents.

But it's not just about numbers. A good CPA can be a trusted advisor, assisting in the growth of your business. They can offer insights on financial strategies, help plan for big expenses like a new truck, and advise on whether to buy or lease.

So, if you're just starting out, don't go it alone. Get a trucking CPA right from the beginning. They'll be like a co-pilot for your finances, making sure you're on the right track. Remember, well-managed finances mean smoother journeys in the world of trucking.

When starting a box truck business, you have three primary options for obtaining your vehicle: buying, renting, or leasing.

Buying a box truck entails purchasing the vehicle outright. While it requires a significant initial investment, you gain full ownership and control. This option is ideal for those with ample capital and a long-term commitment to the business.

It offers the flexibility to customize and modify the truck according to your specific needs.

Renting a box truck involves short-term, typically daily or weekly, agreements with rental companies. It provides immediate access to a vehicle without a substantial upfront cost.

Renting is suitable for businesses with fluctuating demand or those not ready for a long-term investment. However, the expenses can accumulate over time, making it less cost-effective for extended periods.

Leasing allows you to use a box truck for an extended period, usually several years, with fixed monthly payments. While you don't own the vehicle, this option provides flexibility and lower initial costs compared to buying.

Leasing is advantageous for those aiming to conserve capital for other business expenses. Additionally, leased trucks are often newer models, offering access to updated technology and potentially lower maintenance costs.

You should know that the choice between buying, renting, or leasing hinges on your financial capacity, business strategy, and long-term goals.

Consider factors like capital availability, expected usage patterns, and the level of control and customization you require for your box truck business. Each option has its merits, so it's crucial to evaluate which aligns best with your specific circumstances. Your trucking CPA can help you here.

Before you can legally get your truck on the road hauling cargo, you need to invest in insurance. There are a few different kinds that you'll need. First, you'll want to have general vehicle liability insurance. This will cover any damage from accidents that you cause.

Each state will have different minimum requirements for your coverage limit.

However, most states require a minimum box truck insurance coverage of $750,000. Apart from box truck insurance, you'll want to also consider cargo insurance. Most companies will require you to show proof of cargo insurance before they will sign a contract.

Additionally, investing in general liability insurance for your entire business is a great idea.

This type of insurance works to cover a variety of instances like property damage and bodily injury. If you plan on hiring workers, you'll also need to invest in workers' compensation insurance to protect any employees who might become injured.

Once you're legally ready to hit the road and start getting some hauling contracts under your belt, it's time to switch gears to growing your box truck business.

Growth is the key to any long-term business success in the transportation industry.

Invest in Marketing

To grow any box truck business, you need to invest in a great marketing plan.

This plan should start with having a Google My Business profile established and an SEO-optimized website set up.

This will ensure that any potential client looking to do business with you can verify your information and overall legitimacy.

Next, you'll want to start bringing in more leads to your new box truck business.

You can do this in a number of ways. There's pay-per-click online advertising that can connect you directly with companies looking for your services.

You can join load boards that allow others to get to know your business and permit past clients to post reviews about your company.

Another key aspect of any great marketing plan is to establish a referral program.

Offer to give people or companies a set fee for every client they send your way. A referral program essentially turns others into your marketing employees.

Expand Your Fleet

As you're taking on more contracts, you're going to hit a point where you need to expand your existing fleet. This includes both the number of trucks that you have and your drivers.

When it comes to expanding your fleet, you may want to invest in different types of box trucks to help amplify the number of cargo haul opportunities available to your business.

For example, you may opt for purchasing a refrigerated box truck that will allow you to move perishable items that you can't do with your existing fleet trucks.

Another great option to grow your business is joining Amazon Relay program. You can check here what Amazon Relay is and its requirements.

Hiring drivers is an imperative part of expanding any fleet. You want to do your research and set minimum standards for any prospective drivers. Remember that every truck driver you hire is an investment in your business's future.

Reevaluate Your Finances

Once your box truck business gets established, it's a great time to go back and reevaluate your finances. You may find that you can lower your truck payments or that you may need to adjust your rate-per-mile to be more.

When you take the time to sit down and evaluate how your business is doing financially and what you can do to enhance your bottom line, you open up a whole new world of possibilities for money savings.

If you're ready to take on the challenges of entrepreneurship and live the life you've always dreamed of on the road, then it's time to start your box truck business.

By following the tips above, you'll not only be able to establish a successful box truck business but also keep it growing.

Find here the best practises to find load for your box truck and make more money.

Contact a CoverWallet agent today to get the insurance coverage you need to protect your new box truck business.