Starting a Box truck business is not a new thing. It has been a go-to business idea for several decades and is known to provide a decent income. If you work hard and keep up with the trend, you can even build a Six-figure business
But before you actually start a Box truck business, you need to be aware of a few things that make you prepared for tough times and welcome sweet spots
Those who are thinking of starting a box truck business, might have already listened to several advices and out of it, you might have commonly heard things such as, it has high upfront costs, very competitive industry and Hard to strike a real deal immediately
So, to really understand what’s happening in the box truck business you should definitely go through this article. Once you have read, you will have clarity on things to take care of before launching a Box truck company and successfully operating it. This might even act as a checklist for your new box truck business
Here are 14 Important lessons to Know before starting a Box Truck Business
1. Experience Matters
No one can disagree with the fact that you need experience to be successful in the logistics business. Before you directly start your own box truck business, consider working for a logistics firm. You can work for FedEx, UPS, Amazon or any company that you find suitable
Working as an employee will give massive advantages. First, you will know how to manage time effectively – The most important trait for a truck driver
Second – awareness on how the trucking business operates – You will get to know business terms, daily schedule and technical details involved in your job
Third, you will know how you are getting paid – Although, you may not know how much to charge for a shipment, but you will know how much you are getting paid for, depending upon the distance, type of shipment and nature of the job
These three are essential things that can only learnt from experience or learning under a senior truck driver
2. Knowing Your Trucking Category
There are different categories in trucking industry and a Box truck business falls under LTL- Less Than Truck Load. This means a truck that doesn’t require the use of a trailer and the freight doesn’t exceed 26,000- pounds GCVW(Gross Combined Vehicle weight threshold).
There is a lot of confusion in trucking industry workers. People often misunderstand the terminology and often assume the same rules are applicable to the entire trucking industry. Once you know the correct category of your trucking business, you will know the correct requirements of Driving Licenses, Permits, Weigh station guidelines, and what type of cargo can be transported as per your profession
3. Accepting the Heavy Competition in Box Trucking Business
There is no lie in telling Box truck business is a highly competitive industry. It’s not going to be fair to beginners or even the experienced ones. According to truckinfo.net there are almost 13.5 million trucks registered in US out of which 10.5 million are Box trucks
However, this shouldn’t bring you down. There are a lot of successful box truck companies that made a serious profit and there are still few on the roads that are making an income while you are reading this
Instead of taking this point as negativity, you should turn it into a spirit to keep you up in this business and make you moving
4. Pay Special Attention while Registering for Business Licenses and Insurance
There are different business licenses one can register their business such as Sole proprietorship, Partnership, LLC, and Corporation. When It comes to trucking business it’s always better to choose the one where your personal assets will not be sued when there is a claim made on your business
Next, Pay utmost importance to the insurance that you are opting for. You should make sure your business is insured properly. Although insurance cost a significant amount monthly around $230 – $250 /Month never neglect their importance.
So, ensure that you fully understand the terms and conditions while applying for business licenses as well as permits. If you have no idea, it’s always better to reach a consultant and get a clarity
5. Working for Specific Niche vs. Catering All Sectors
One of the potential strategies to grow in the box truck business is, specializing in a specific industry. Instead of sticking to a conventional box truck, You can specialize in transporting specific goods such as ‘refrigerated products’ or ‘landscaping cargo’ or ‘Highly fragile cargo’ etc., Or anything specific you can think of.
By focusing on specializing in one niche, you can gain experience, skills and become an expert in the field. All of these will bring you trust, expertise, and a competitive edge in the industry
6. Think Thrice before Buying a Box truck – Go with the Conventional or Specific Category
There are different types of box trucks designed based on customer preference and usage. As an owner of a box truck company, you should think thrice before buying one. As you put a lot of money to buy one. You should consider factors such as cargo capacity, usage, and market demand. In addition to all these you also need to keep in mind the recurring bills for driving licenses, permits insurance, etc.,
For example, if your Box truck falls in between 8,500 to 14,500 pounds it comes under light-duty box truck and may not require a CDL – Commercial Driving license. And if your entire vehicle weighs more than 26,000 LB you may require CDL – which costs you significantly, however, the more the capacity of your box truck, the more you will be able to deliver and make more money
However, if you are not able to utilize the maximum of your cargo space you might not make enough ROI on your vehicle purchase. Hence be prepared for such unforeseen conditions
7. How Much Do You Really Make in Box Truck Business – The Reality
To be frank, in the initial days, a box truck business owner makes roughly less than $50,000 a year. However, there are multiple resources that tell you can make a six-figure income in this business. However, that is not completely true
Any new box truck business takes time to find customers and no customer is going to hand over a highly-paying job immediately to a new business; Moreover, in the initial days of a box truck business it takes time to find high-paying jobs such as Interstate jobs and then you also need to pay your insurance and tax, etc., After all the cuts you will be left with less than $50k
But, once you gain expertise you can defiantly make more than $100,000 per year
On top of it, the profit you make highly depends on the area or city you are operating. For example, cities like Manhattan, San Diego, Orlando, Atkinson have high paying rates
8. Don’t forget to Set a side a Percentage of your revenue to Recurring Expenses
While buying a box truck is going to cost you a significant amount; You should not forget that there are still several things you to set aside some of your budget every year
items like Insurance fees, Permit fee, Toll Tax, and Load board if required you might also need to invest in TMS, which most probably don’t need but in case, if you expand your business you may need to consider this option
So, in a nutshell set a side atleast 15% of your revenue to cover these expenses plus, this will also cover your monthly maintenance charges
9. Track the Number of Miles Travelled Officially With an ELD
ELD stands for Electronic Logging device which digitally records the hours driven. When you are into the box trucking business it is recommended to get an ELD to your truck as soon as possible as it helps to keep track of records of hours driven officially. Although not all box truck drivers might install this device. But it is best to stay in compliance
Before you purchase one, you can take a quick look at FMCSA ELD list that has a list of devices registered as well as revoked from FMCSA
10. Branding Plays an Important Role for a new Box Truck Company
Branding includes several things such as Your Company name, Logo and it showcases what type of business you in
Never, ignore the importance of branding, for example, just think about any famous logistics company around you, Even if you haven’t worked for that company, you still think it’s a great company whenever you see their trucks pass by. The Logo and the name are enough to give you an idea about the company’s standards
So, Make sure you take your time to come up with a proper branding strategy for your business. You can make use of business name generators available on internet to find a suitable name for your company, reach out to local logo designing companies, and if possible, add a Tagline for your business that should represent the line of work you are in
11. Make sure to set up a website for your Box Truck company – Do not forget it!
There are several box truck business owners who often ignore the option of having a website for their business. Please do not make this mistake! You are living in a digital world and you should always go with the trend
The days are gone when you still advertise with mouth publicity or just list your phone numbers in the local directory. There are a lot of studies that tell most customers look for a website if they want to contact a business
Please don’t think it’s an extra cost. You can set-up a website dirt cheap these days. You can really get a decent website built under $500 that can run for 2-3 years without any costs
Here’s what you should make sure to include in your website
- About Us Page
- Contact Us Page (Add a working phone number)
- Services offered.
- Your specialization
- A form that customers can fill out and submit for a quote
12. Should You Buy a Used Box Truck or Brand New One?
When it comes to purchasing a box truck you have two options either to go with a used one or purchase a new one. A used Box truck can cost you around $25,000 to $40,000. Whereas a brand-new box truck can costs around $35,000 to $60,000. Especially if you are new to the business and have limited budget you can go with a used one
However, when you are purchasing a used one, you should ensure to cross-check everything like previous owners driving history, condition of tyres, and engine performance and most importantly you need to cross-verify all the documents before you finally register under your name
13. Learn How to Calculate Your Load – Most Important Point to Remember
As a business owner, you should know how to calculate a load properly as well as be familiar with all the terminology used in calculating loads
Although calculating loads may not be your job all the time, as you can get it straight from the load boards, it’s an important math that you should learn when you are operating independently
You need to know how to estimate cost per mile. For which you need to know several things such as the price of the gas, maintenance cost, miles per gallon, etc.,
If you are familiar with spreadsheets you can try calculating cost per mile by yourself. There are number of resources in interent that provides information on how to calculate cost per mile
Knowing cost per mile mile is important and anyone who is into the trucking business should learn it as quickly as possible to get a fair idea on how much they are making per each mile
14. Customer Satisfaction Is Key to Success in Logistics Business
Like any logistics business, Success depends upon customer satisfaction. Whether you are a small box truck company or running a fleet of box trucks, always give priority to the customer. Be transparent on pricing, stay in compliance, and make sure the shipment arrives at its destination on time and safely
Take Away
Box trucking is a lucrative industry, you have ups and downs, good days and bad days, When worked with a spirit and consistency, it can earn you a six-figure income. However, you need to have patience. There might even be days you have to work for a low cost per mile due to dry market conditions. However, don’t waste any opportunity during the initial stages of your business, and finally always keep your truck up and running
100% useful and rewarding tips!
Thank you so much for these 14 tips.