July 6, 2023
Adam Hoeksema
If you are looking to start a trucking company and need financing, you are likely to be asked to provide a business plan by your potential lender or investor. If you plan to start as a one-person trucking company this may really seem like overkill, do you really need a full business plan if you simply plan to buy a truck and drive it yourself?
The reality is that whether it is overkill or not, if your lender requires a business plan, perhaps because it is an SBA loan requirement, then you just have to get it done. My hope with this blog post is to cover the following questions:
With that in mind as the path forward, let’s dive in.
What should a trucking business plan include?
A trucking business plan should include a market analysis, list of services offered, marketing and sales strategy, operations plan, financial projections, organization and management and risk analysis section. You can see our detailed outline below.
Trucking Business Plan Outline
I. Introduction:
II. Market Analysis:
III. Services Offered:
IV. Marketing and Sales Strategy:
V. Operations Plan
Acquisition and Management of Trucks
Hiring and Training of Drivers
Dispatch and Logistics
Regulatory Requirements and Compliance Measures
VI. Financial Projections
Startup Costs, Funding Sources, and Future Financing Needs:
Financial Summary
Annual Sales, Gross Profit and Net Profit
Key Financial Ratios
Income Statement
Balance Sheet
Cash Flow Statement
VII. Organization and Management
Organizational Structure
Roles and Responsibilities of Key Stakeholders
Legal and Compliance Requirements
VIII. Risk Analysis
Potential Risks
Contingency Plans
IX. Conclusion
What kind of trucking business should I get into?
Your business plan will differ based on the type of trucking business you plan to get into. There are several different types of trucking businesses, each with different business and financial models. For example, we have developed financial models for the following types of trucking businesses:
- General Freight Trucking
- Dump Truck
- Box Truck
- Moving Truck
- Food Truck
Each type of trucking business will have different pros and cons, different startup costs, different work schedules, and ultimately different earning power.
Where can I find customers for my trucking business?
Finding customers for your trucking business involves proactive networking, marketing, and understanding where your potential clients might be. Here are several strategies to attract more customers:
Networking Events: Attend industry-related networking events, seminars, and trade shows. They can be a great way to meet potential customers as well as partners.
Online Directories and Load Boards: Online freight and load boards can be useful. Some popular options include Truckstop.com, DAT Load Board, and Freightos. Customers needing freight services often use these platforms to find providers.
Use a Freight Broker: Freight brokers act as intermediaries between shippers and carriers. They can bring you new business, but they will take a commission.
Social Media & Online Marketing: Platforms such as LinkedIn, Facebook, Instagram, and Twitter can be useful to connect with potential clients. You can also use Google Ads and SEO to increase your online visibility to potential customers who are looking for trucking services.
Local Businesses: Reach out to local businesses that might need your services. Manufacturers, wholesalers, and companies with distribution needs are all potential customers.
Develop a Website: If you don't already have one, create a professional website outlining your services, rates, and contact information. Having a digital presence can greatly enhance your business visibility.
Referrals: Encourage your current clients to refer your trucking business to other potential customers. You can incentivize this process by offering a referral discount or another type of reward.
Cold Calling and Emailing: Identify potential clients, prepare a solid sales pitch, and reach out directly via phone or email.
Partnerships: Consider creating partnerships with other businesses that complement your trucking services. For instance, a partnership with a storage or warehouse company can be beneficial.
Spot Freight vs. Dedicated Routes
Each approach to running a trucking business has its own advantages and disadvantages. Here are some of the main pros and cons of having a dedicated route versus picking up loads on load boards:
Dedicated Routes
Pros:
Consistent Work: With a dedicated route, you have a reliable and predictable schedule. You'll know in advance where you're going, when you need to be there, and what you're hauling.
Predictable Revenue: Having a consistent schedule also means you'll have consistent revenue. You'll know what you're earning each week or month, making it easier to plan your business finances
Established Relationships: Over time, you'll build relationships with the businesses along your route. These relationships can lead to more business and better working conditions.
Reduced Wear and Tear: With a dedicated route, you're often driving the same roads and conditions, which can help reduce wear and tear on your equipment.
Cons:
Less Flexibility: With a dedicated route, your schedule is mostly fixed. You may have less time for other business opportunities or personal matters.
Risk of Dependency: If your dedicated client's business goes down or they decide to change providers, it can significantly impact your income.
Potential for Lower Pay: Depending on the agreement, dedicated routes can sometimes pay less per mile than what you could get from a high-demand load on a load board.
Load Boards
Pros:
Flexibility: Load boards offer the flexibility to choose your loads and routes. You can decide when to work, where to go, and what to haul.
Potential for Higher Pay: Some loads, especially urgent or last-minute ones, can pay very well. If you're in the right place at the right time, you can earn more than you might on a dedicated route.
Variety: Using load boards provides a variety of work. You're not limited to the same route or cargo, which can make your work more interesting.
Cons:
Inconsistent Work and Pay: Load boards can be unpredictable. Some days, you might find lots of high-paying loads; other days, there might be very little work available.
Competition: Load boards are open to all truckers, which means you're competing with everyone else for the best loads.
Lack of Personal Relationships: Load boards often don't give you the opportunity to build strong relationships with shippers, which might affect the quality of your working conditions and business opportunities.
Broker Fees: Many load boards work through brokers, who take a commission on the load. This can reduce your overall earnings.
It's worth noting that many trucking businesses use a combination of dedicated routes and load boards to balance out the pros and cons of each approach. This hybrid model can provide both consistency and flexibility.
Should I lease or buy my semi-truck?
Choosing whether to buy or lease a semi-truck for your trucking business is a significant decision that can have long-term impacts on your business's financial health and flexibility. Here are some pros and cons of each option:
Buying a Semi-Truck
Pros:
Ownership: Once you've paid off the truck, it's yours. You can modify it to suit your needs and sell it when you want to upgrade or exit the business.
No Mileage Restrictions: Unlike with leasing, there are no penalties for high mileage when you own your truck.
Possible Cost Savings: Depending on the terms of the purchase and the life of the truck, it may be more cost-effective in the long run to buy a truck outright.
Cons:
High Upfront Costs: Buying a semi-truck requires a significant initial investment, which might be challenging for some businesses, particularly start-ups.
Maintenance and Repair Costs: As the owner, you're responsible for all maintenance and repair costs. These costs can be unpredictable and expensive.
Depreciation: Trucks depreciate over time. When you decide to sell, you might not recoup much of your initial investment, particularly if the truck has high mileage or is in less than excellent condition.
Leasing a Semi-Truck
Pros:
Lower Initial Costs: Leasing a truck usually requires a smaller initial investment compared to buying.
Flexibility: Leasing can offer more flexibility. You can upgrade to newer models more frequently, and you're not tied down to a long-term commitment if your business needs change.
Less Maintenance Responsibility: Depending on your lease agreement, some or all maintenance and repairs might be covered by the leasing company, reducing unexpected costs and downtime.
Cons:
No Equity: When you lease, you're essentially renting. You're not building equity in the truck, and at the end of the lease, you don't own anything.
Mileage Restrictions: Leasing contracts often have mileage limits. If you exceed these limits, you could end up paying significant penalties.
Lack of Customization: When you lease, there may be restrictions on how much you can modify or customize the truck.
Potential for Higher Long-Term Costs: Over the long term, the total cost of leasing can end up being more than the cost of buying a truck outright.
When deciding between buying or leasing, it's important to consider the specific needs and financial situation of your business. You should factor in your cash flow, the amount of driving you expect to do, the importance of owning your truck, and the impact of potential repairs and maintenance. Consulting with a financial advisor can be very beneficial in making this decision.
How to Create Financial Projections for a Trucking Business Plan
Just like in any industry, the trucking business has its unique factors that impact financial projections, such as fuel costs, maintenance expenses, and client contracts. Utilizing a trucking financial projection template can simplify the process and enhance your confidence. Creating accurate financial projections goes beyond showcasing your trucking company's ability to cover expenses; it's about illustrating the financial roadmap that leads to profitability and the realization of your transportation goals. To develop precise projections, consider the following key steps:
- Estimate startup costs for your trucking business, including vehicle acquisition or leasing, insurance, licenses, and permits
- Forecast revenue based on projected client contracts, rates per mile, and anticipated volume of shipments.
- Project variable driving costs like fuel, vehicle maintenance, repair expenses, as well as driver pay
- Estimate operating expenses like insurance premiums, permits and licenses renewal fees, tolls, salaried employees, and administrative costs.
- Calculate the capital needed to open and operate your trucking business, covering initial expenses and providing working capital for sustained operations.
While financial projections are a critical component of your trucking business plan, seek guidance from experienced professionals in the industry to refine your projections. Adapt your plan based on real-world insights, leverage industry resources, and stay informed about market trends and regulatory changes to ensure your financial projections align with your goals and set the stage for a successful trucking venture.
Example Trucking Business Plan
Below you will find the text of our example trucking business plan. You can also download a Google Doc version of this trucking business plan template here, which allows you to modify it and personalize it to your own needs. You can also follow along in this video walkthrough, designed to help you customize the business plan to suit your specific trucking business model.
Table of Contents
I. Introduction:
II. Market Analysis:
III. Services Offered:
IV. Marketing and Sales Strategy:
V. Operations Plan
Acquisition and Management of Trucks
Hiring and Training of Drivers
Dispatch and Logistics
Regulatory Requirements and Compliance Measures
VI. Financial Projections
Startup Costs, Funding Sources, and Future Financing Needs:
Financial Summary
Annual Sales, Gross Profit and Net Profit
Key Financial Ratios
Income Statement
Balance Sheet
Cash Flow Statement
VII. Organization and Management
Organizational Structure
Roles and Responsibilities of Key Stakeholders
Legal and Compliance Requirements
VIII. Risk Analysis
Potential Risks
Contingency Plans
IX. Conclusion
I. Executive Summary
The name of our bar and grill is "Cheers & Grub". Cheers & Grub is a casual dining establishment that specializes in American-style cuisine with a focus on juicy burgers, delicious wings, and refreshing beers on tap. Our target market is young professionals and families in the downtown area who are looking for a casual and relaxed atmosphere to enjoy good food and drinks.
We aim to differentiate ourselves from our competitors by offering a unique and enjoyable dining experience. Our menu will feature a variety of classic American dishes, made with fresh and locally-sourced ingredients. Our bar will offer a wide selection of domestic and craft beers, as well as a variety of specialty cocktails. We will also host weekly events such as trivia nights and live music performances, to keep our customers engaged and entertained.
Our projected startup costs are $500,000, which includes the cost of leasehold improvements, equipment, and operating capital. Our projected first-year sales are $1.2 million, with a net profit margin of 7%. We anticipate steady growth in sales and profits over the next five years.
II. Business Concept
Cheers & Grub is a casual dining establishment that offers a relaxed and friendly atmosphere, combined with great food and drinks. Our menu will feature classic American dishes, such as burgers, wings, sandwiches, and salads, made with fresh and locally-sourced ingredients. Our bar will offer a variety of domestic and craft beers, as well as a selection of specialty cocktails.
The ambiance of our establishment will be modern and comfortable, with a touch of vintage charm. We will feature a spacious dining area, a full-service bar, and a cozy lounge area for customers to relax and enjoy live music performances. Our target market is young professionals and families in the downtown area who are looking for a casual and relaxed atmosphere to enjoy good food and drinks.
III. Market Analysis
The restaurant industry has been growing steadily in recent years, with an estimated market size of $899 billion in 2020. The demand for casual dining establishments like Cheers & Grub is particularly high, as consumers seek out convenient and affordable options for their dining needs. Our target market consists of young professionals and families in the downtown area who are looking for a casual and relaxed atmosphere to enjoy good food and drinks.
In terms of competition, there are several established bar and grill establishments in the downtown area. However, we believe that we can differentiate ourselves by offering a unique and enjoyable dining experience, made with fresh and locally-sourced ingredients. Our bar will also offer a wide selection of domestic and craft beers, as well as a variety of specialty cocktails, to appeal to a wider range of customers.
IV. Competition Analysis
The main competition in the downtown area consists of established bar and grill establishments, such as "The Local" and "Grill Master". The Local is known for its casual atmosphere and selection of domestic beers, while Grill Master is known for its specialty cocktails and live music performances.
We believe that we can differentiate ourselves from our competitors by offering a unique and enjoyable dining experience. Our menu will feature a variety of classic American dishes, made with fresh and locally-sourced ingredients, and our bar will offer a wide selection of domestic and craft beers, as well as a variety of specialty cocktails. In addition, we will host weekly events such as trivia nights and live music performances, to keep our customers engaged and entertained.
V. Marketing Strategy
Our marketing strategy will focus on reaching our target market through a variety of channels, including online advertising, social media, and local promotions. We will also leverage our unique selling points, such as our fresh and locally-sourced ingredients, our selection of domestic and craft beers, and our weekly events, to attract and retain customers.
Online Advertising: We will utilize social media platforms, such as Facebook and Instagram, to reach our target audience. This will include paid advertising, such as sponsored posts and ads, as well as organic content, such as pictures and videos of our menu items and events.
Social Media: We will create a strong presence on social media by regularly posting pictures, videos, and updates about our menu items, events, and promotions. This will help to engage our followers and build a loyal customer base.
Local Promotions: We will participate in local events and promotions, such as food festivals and charity events, to increase visibility and build brand awareness. We will also offer special deals and promotions, such as happy hour discounts and loyalty programs, to incentivize customers to visit Cheers & Grub.
VI. Menu and Kitchen Operations
Our menu will feature a variety of classic American dishes, made with fresh and locally-sourced ingredients. This includes juicy burgers, delicious wings, sandwiches, and salads. Our bar will offer a wide selection of domestic and craft beers, as well as a variety of specialty cocktails.
In terms of kitchen operations, we will have a fully-equipped kitchen. Our kitchen staff will be trained in food safety protocols, and we will have strict sanitation procedures in place to ensure the safety and quality of our food.
VII. Service and Hospitality
At Cheers & Grub, we will strive to provide exceptional service and hospitality to our customers. Our staff will be trained in customer service and will be equipped with the necessary skills to provide a welcoming and friendly atmosphere.
Our dining area will feature table service, while our bar will offer full-service bar service, including the preparation of specialty cocktails. We will also have a lounge area for customers to relax and enjoy live music performances.
VIII. Financial Plan
Our projected startup costs are $350,000, which includes the cost of leasehold improvements, equipment, and operating capital. Our projected first-year sales are $1 million, with a net profit margin of 26%. We anticipate steady growth in sales and profits over the next five years, with a focus on expanding our menu offerings and hosting more events to attract and retain customers.
All of the unique financial projections you see below were generated using ProjectionHub’s Trucking financial projection template. Use PH20BP to enjoy a 20% discount on the template.
Startup Costs:
Projected Financial Summary:
Annual Sales, Gross Profit and Net Profit:
Key Financial Ratios:
Watch how to create financial projections for your very own bar and grill:
Income Statement:
Balance Sheet:
Cash Flow Statement:
IX. Organizational Structure
Cheers & Grub will be owned and operated by [Name], an experienced restaurateur with a passion for good food and drinks. [Name] will also serve as the manager, responsible for day-to-day operations, including menu development, kitchen operations, and staffing.
In terms of staffing, we will have a team of highly-skilled and trained employees, including a head chef, kitchen staff, servers, and bartenders. We will also have a human resources manager to handle employee relations and benefits.
X. Conclusion
In conclusion, Cheers & Grub is a casual dining establishment that offers a relaxed and friendly atmosphere, combined with great food and drinks. With a focus on fresh and locally-sourced ingredients, a wide selection of domestic and craft beers, and weekly events, we believe that we have the necessary elements to succeed in the competitive restaurant industry. Our financial projections are positive, and we are confident in our ability to achieve steady growth and profitability in the coming years.
Trucking Business Plan FAQs
How do I start a trucking business?
To start a trucking business, you'll need to obtain the appropriate commercial driver's license (CDL), register your business, secure necessary permits and licenses, acquire or lease trucks, establish relationships with clients or freight brokers, and ensure compliance with safety regulations.
How can I find freight and clients for my trucking business?
To find freight and clients, consider partnering with freight brokers or load boards, networking within the industry, attending trade shows or logistics events, leveraging online freight marketplaces, and building relationships with shippers or manufacturers.
What types of insurance do I need for my trucking business?
Insurance coverage for a trucking business may include primary liability insurance, cargo insurance, physical damage insurance for your vehicles, and general liability insurance. Consult with an insurance professional to determine the specific coverage you need.
How can I optimize fuel efficiency in my trucking operations?
To optimize fuel efficiency, consider maintaining regular truck maintenance, training drivers on fuel-efficient driving techniques, investing in aerodynamic equipment for trucks, monitoring tire pressure, using GPS technology to plan efficient routes, and adopting technologies that help optimize fuel usage.
What are the compliance requirements for the trucking industry?
Compliance requirements for the trucking industry include adhering to hours-of-service regulations, maintaining accurate records and logs, conducting regular vehicle inspections, following weight and size restrictions, and complying with licensing and registration requirements.
