Customer small business financing solutions delivered through a single, online application.
Loan Types
Free access to multiple funding solutions
See funding solutions from 75+ nationwide lenders with a single application.
Gauge how accessible business financing is to small businesses.
Learn about business loans
Customer stories
Meet Heather Beck, Owner and Founder of K9 Lifeline and Heather's Heroes.
Apply for financing, track your business cashflow, and more with a single lendio account.
Home Running A Business How Much Will it Cost to Start a Trucking Business?
So, you’ve decided to truck it out by yourself and start your very own trucking company? Well, congratulations! The trucking industry is ripe with growth and opportunity, and it’s just waiting for ambitious entrepreneurs like you to seize the occasion.
See, America needs trucks. We desperately need trucks. The shortage of truck drivers is getting worse every year, and that deficit is expected to widen by more than 100% over the next decade. Aging drivers are retiring, women are struggling to join the industry, and the labor market is growing tighter and tighter—so more knowledgeable trucking business owners is exactly what our country needs.
The trucking industry is—and will remain for the foreseeable future—the lifeblood of the US economy, moving nearly 71% of all freight tonnage in the country. Annual truck tonnage has seen growth over the last 10 consecutive years, and although 2019 wasn’t as magical as 2018 for the industry, now’s as good a time as ever to jump into the competition.
But starting your own trucking company isn’t all wide-open roads and beautiful sunsets—it’s a lot of hard work, patience, and savvy decision-making. Oh, and money. Yes, money. One of the biggest barriers to entry in this industry is capital. Fortunately for you, there are plenty of fantastic financing options that can help you get your business off the ground. But how much cash are you going to need, exactly? Good question.
This guide is chock-full of all the costs you can expect to pay when starting your trucking company. It includes the obvious investments (like your truck and its many big ol’ expensive tires), and it also contains the not-so-obvious expenses (like toll fees and CDL endorsements). It’s all here to give you a good idea of what it’ll cost to make your trucking dream a reality. But before we dive into the nuts and bolts of your expected costs, we need to take a step back and look at the big picture—your business plan.
Before you start planning how many trucks you’re going to buy and how much it’ll cost you, you need to take a holistic approach. By creating a business plan, you’ll be able to see the path from start to success in its entirety, and you’ll see all the essential milestones along the way.
There’s no one-size-fits-all business plan in the trucking industry. You may decide to hire a bunch of owner-operators with their own trucks, or you could choose to build a fleet of big rigs and find talented truckers to drive them. And your aspirations now could change over the next 2–3 years, and that’s okay. Your business plan isn’t a binding document to keep you headed in one direction—it’s a GPS to get you from where you are now to where you want to go.
So step 1: get out your business plan. If you don’t have one yet, that’s A-OK—check out our step-by-step guide to creating your plan. Once that’s done, you’re ready to start making some real estimates. As we look through all the expected costs of starting a trucking business, you’ll likely discover new opportunities and barriers that’ll change your business plan. That’s great! Keep it close by so you make sure it’s always up-to-date.
Now, on to the costs you can anticipate.
Starting a trucking business isn’t cheap. You’re going to need trucks, truckers, parking, equipment, office space, licenses, permits, gas, marketing material, and much more—it’s not as simple as buying a truck and hitting the highway.
In fact, depending on what kind of business you want to build, you might not actually drive the truck at all. Perhaps you’ll hire full-time truckers. Maybe you’ll hire subcontractors. Or you may just run a one-person show where you do it all—there’s no right answer, but you’ll need to factor in the associated costs of each decision you make.
It can all be a little overwhelming, and that’s why we’re going to help you take it step-by-step, item-by-item. Let’s start with some of your most expensive assets first: real estate and trucks.
As you scale, your real estate demands will grow, but on day one, you’re going to need some basics. You’re going to need docking and parking for your fleet, and you’ll likely want office space for administrative tasks—nothing fancy, but you’ll need something. Preferably, you’ll want to find locations that are easy-access for massive trucks and are close to major highways and interstates. This location will help eliminate unnecessary transportation waste and save valuable time.
Next, you’re going to need trucks. Start small and scale as you grow. You may just want to start with 1 or 2 trucks, at first, and buy more as need demands.
A new truck and trailer could cost you well over $150,000, so you’ll have to decide whether you want to buy new, buy used, or even rent or lease. Purchasing a brand new truck will guarantee it’s in tip-top shape, meaning you’ll have fewer maintenance and repair bills over the next few years. But you pay a hefty premium for that peace of mind.
Buying a used semi-truck is much like buying a used car—just on a much larger scale. You’ll save thousands of dollars up front, but you should anticipate more maintenance costs and fewer years left of operation. Depending on the age and mileage, you could pay anywhere between $30,000 and $80,000 for a reliable big rig.
Another option is to rent or lease a truck, but this can get expensive very quickly. Used trucks may lease for around $800 a month while new rigs may lease for up to $2,500 a month. Oh, and don’t forget about the insurance costs, too, which can run as high as $1,000 a month.
When financing or leasing a truck, expect these costs to make up around 16% of your total truck operating costs.
If you’re going solo, you only need to pay yourself, but if you’re looking to scale, here’s what you can expect. A trucking business crew has truckers, maintenance workers, logistics coordinators, dispatchers, accountants, attorneys, administrative staff, recruiters, trainers, and more. As a small business owner, you may wear multiple of these hats from time to time. However, as you scale, you may hire full-time employees, freelancers, or subcontractors for any one of these positions—it all depends on your business plan and strategy.
If you build a large fleet of trucks, you may hire in-house maintenance workers. Or you may choose to outsource all your maintenance and repair work—it’s entirely up to you and your unique situation. The same is true for your truck drivers. On average, drivers’ salaries make up over 43% of the costs of operating a trucking business.
Depending on your trucks and the industries you serve, you may need to buy and maintain a variety of additional equipment. For example, if you’re transporting frozen goods, you’ll need to purchase temperature-controlled storage containers. If you transport logs, you’ll need a specific bed and ties. Or if you carry hazardous cargo, you’ll need specialized equipment.
This specialized equipment usually has higher costs, and it’ll also require unique cleaning and maintenance. Keep these additional costs in mind if you choose to work with less-competitive niche markets.
If you thought the gas price for your private vehicle was bad, then you’re in for a big surprise. On average, a commercial truck will burn through at least $70,000 worth of diesel fuel per year. That’s a lot of fuel (and a lot of money)! On average, fuel will account for around 22% of your total truck operating costs.
There are plenty of tips and tricks to cut fuel costs, but it’s still going to be a massive expense for every one of your vehicles. You have to spend money to make money, right?
This expense might seem insignificant in the grand scheme of things, but toll fees can add up. Toll charges have skyrocketed over the last decade, increasing by close to 75%. Depending on which study you look at, toll prices could be your 2nd or 3rd biggest operating cost (alternating with fuel). It all depends on where you operate and which routes your drivers frequent.
A tool like Tollsmart can help you plan your routes and predict your expenses—this practice will help you accurately invoice your clients so you get the most bang for your buck. Other tools, like Bestpass, will help simplify your toll management expenses and help you find excellent discounts.
Alternators will break, tires will puncture, wiring will need to be fixed, breaks maintained—there’s a lot that goes into sustaining efficient trucks. Repairs and maintenance costs average around 10% of your total truck operating costs ($15,000 annually). Tire repairs and maintenance cost around $4,000 annually per truck on average, and that doesn’t take into account when you’ll need to replace some tires completely.
Increasing labor rates, parts costs, and replacement tire prices caused maintenance expenses to increase by up to 5% in 2018, and that number will likely keep steadily rising. Keep that in mind as you create your financial forecasts for your operating expenses.
As you can expect, you’ll need several licenses and permits to transport massive trucks full of cargo across the US. This post contains an excellent checklist, although you may need additional licenses depending on your home state and if you’re transporting unique goods. Here’s a quick list for reference:
Depending on the kind of cargo you’ll be hauling, you may need additional license endorsements. For example, if you’re transporting “hazardous” material (meaning explosives, combustibles, flammables, gases, and other potentially dangerous goods), you’ll need a HAZMAT endorsement.
Total, you’re looking at a few thousand in annual expenses for licenses and permits.
Like with most insurance plans, you’ll pay a different amount for varying degrees of coverage. Your basic coverage will be cheaper, and your more comprehensive coverage will be more expensive. Obviously, you’ll also pay more if you’re insuring newer vehicles. It’s better to be safe than sorry, but you’ll need to decide which coverage packages will most benefit your business.
The government puts some heavy taxes on the trucking industry. The Heavy Vehicle Use tax and permit, as well as state-specific taxes, could cost you an average of $500 per truck annually.
You could argue that trucks market themselves, and we wouldn’t entirely disagree, but you’re going to need some additional budget to market your business. First, let’s start with branding.
At a bare minimum, you’ll need a name, logo, color scheme, social media profiles, and a website. Of course, you can always go deeper and wider to create an impressionable brand, but you’ll need these basics. Unless you’re decently design-savvy, you’ll likely need to hire a freelancer to lend you a hand.
Next, decide which clients you want to work with. Do you want to work with construction companies, large corporations, small businesses, the timber industry, oil and gas companies, or manufacturers? Once you know who you’re targeting, then you can decide how best to reach them. That strategy might include social media ads, Google display ads, brochures, email marketing, cold calls, etc. If you lack marketing experience, you might want to get some advice and help from an agency.
You’ll want to start preparing a cash cushion to deal with any unexpected disaster on day one. The trucking industry is a fun one—every day is different, and you’ll deal with a variety of challenges week in and week out/ But it’s also rife with risk. Truckers will suddenly quit, tires will blow, trucks will crash, clients will delay payments—there’s a host of things that can and will go wrong.
By building a rainy day fund, you’ll have the capital you need to deal with any challenge. When you’re just starting and cash is low, consider getting a business line of credit. A business line of credit is a financial safety net that’s there when you need it, but you’re under no obligation to use it. So if you need to fix a truck’s engine immediately or hire an additional trucker, you’ll always have the cash you need on hand.
With all this talk of money, money, money, you’re probably starting to worry about how you can afford everything. Don’t panic! Getting a trucking business off the ground takes a lot of cash, but lenders understand the investment and know it’ll pay off in the end. That’s why they offer some fantastic financing options for transportation businesses. Let’s look at a few options.
Remember, all of the numbers we shared are just general estimates. Your specific costs will vary based on your business plan, goals, and geographic location. Open up Google search, pick up the phone, and start getting accurate quotes. Once you have a better idea of your exact startup costs, then you’ll know how much financing you need. Then, once you have the capital in the bank, you’ll be ready to get your business off the ground.
Starting and operating a trucking company is a lot of hard work, but it’s well worth the money and time in the end. Done right, you can make a fantastic business within the trucking industry. So what are you waiting for? Put your pedal to the metal and get your trucking business on the road.
Applying is free and won’t impact your credit.
Jesse Sumrak is a Social Media Manager for SendGrid, a leading digital communication platform. He's created and managed content for startups, growth-stage companies, and publicly-traded businesses. Jesse has spent almost a decade writing about small business and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped startup. When he's not dabbling in digital marketing, you'll find him ultrarunning in the Rocky Mountains of Colorado. Jesse studied Public Relations at Brigham Young University.
Subscribe to our weekly newsletter for industry news and business strategies and tips
Subscribe to our weekly newsletter for industry news and business strategies and tips.