Starting a box truck business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful box truck business.
Importantly, a critical step in starting a box truck business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Box Truck Business:
- Choose the Name for Your Box Truck Business
- Develop Your Box Truck Business Plan
- Choose the Legal Structure for Your Box Truck Business
- Secure Startup Funding for Your Box Truck Business (If Needed)
- Secure a Location for Your Businessn for Your Business
- Register Your Box Truck Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Box Truck Business
- Buy or Lease the Right Box Truck Business Equipment
- Develop Your Box Truck Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Box Truck Business
- Open for Business
1. Choose the Name for Your Box Truck Business
The first step to starting a box truck business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your own business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your box truck business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your box truck business.
2. Develop Your Box Truck Business Plan
One of the most important steps in starting a box truck business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your box truck business.
- Company Overview – this section tells the reader about the history of your box truck business and what type of box truck business you operate. For example, are you a food delivery business, package delivery business, or a moving company.
- Industry Analysis – here you will document key information about the box truck industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products and/or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your box truck business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your box truck business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Box Truck Business
Next you need to choose a legal structure for your box truck business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner operator of the box truck business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a box truck business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owner operators of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a box truck business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a box truck business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your box truck business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Box Truck Business (If Needed)
In developing your box truck business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a box truck business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a box truck business that they believe has high potential for growth.
5. Secure a Location for Your Business
When starting your own box truck business, one of the first things you’ll need to do is find a location for your business. There are a few things to consider when choosing a location:
- Is the area accessible for trucks?
- Is there enough space to park your truck and unload cargo?
- Is the area safe and secure?
Once you’ve narrowed down your options, it’s important to visit each of the locations and see for yourself if it meets your needs.
6. Register Your Box Truck Business with the IRS
Next, you need to register your new business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your box truck business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your box truck business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
You will need a license to operate a box truck business. You will also need a permit from the Department of Transportation to operate as a commercial carrier. Depending on how the truck will be used, you may also need commercial registration with your local Department of Motor Vehicles.
The following are required licenses and permits for most box truck businesses:
- Class A license
- City business license
- State tax permit
- Commercial Driver’s License (CDL)
- Federal Motor Carrier Safety Administration (FMCSA) insurance certificate
10. Get Business Insurance for Your Box Truck Business
Business insurance policies that you should consider for your box truck business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Box Truck Business Equipment
In order to start a box truck business, you will need some essential equipment. You will need a truck and you will also need a cargo container in order to transport your goods. You may also want to invest in a forklift or other material handling equipment to make it easier to move your products.
You will also need some office equipment to keep your business running smoothly. You will need a computer, printer, and other office supplies.
12. Develop Your Box Truck Business Marketing Materials
Marketing materials will be required to attract and retain customers to your box truck business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your box truck business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional box truck business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your box truck business.
13. Purchase and Setup the Software Needed to Run Your Box Truck Business
There are a few software programs that you will need in order to run a box truck business. You will need a program to track your finances, such as QuickBooks or Excel. You will also need a truck routing program and GPS systems for the trucks.
14. Open for Business
You are now ready to open your box truck business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
How to Finish Your Ultimate Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your box truck business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your box truck business plan today.
How to Start a Box Truck Business FAQs
Is it hard to start a box truck business?
There is no one-size-fits-all answer to this question, as the difficulty of starting a box trucking business will vary depending on the specific details of your operation. Some key things to consider when starting a trucking company include securing the necessary licenses and permits, choosing an appropriate vehicle and hiring professional truck drivers.
If you follow the steps above, you should be able to start your box truck business without too much difficulty.
How can I start a box truck business with no experience?
There are a few things you can do to start a box truck business with no experience. You can start by researching the industry and learning about the different types of box trucks that are available. You can also find a mentor who can help you get started in the business. Finally, you can join trucking associations and attend transportation industry events, which will help you network with other professionals in the business.
What type of box truck business is most profitable?
One of the most profitable types of box trucking companies are those that transport heavy or large items. These businesses can be more profitable because they often have fewer competitors, and the goods that they transport tend to be in high demand. Another type of box truck business that is generally more profitable is those that transport perishable goods. This is because the goods need to be delivered quickly and freshness is essential.
How much does it cost to start a box truck business?
The cost of starting a box truck business will vary depending on the specific type of business you want to start. However, there are some general costs you can expect to incur when starting a box truck business, such as the cost of licensing and permits, the cost of insurance, and the cost of purchasing or leasing a truck.
What are the ongoing expenses for a box truck business?
Ongoing expenses are the daily and monthly costs that a business faces after opening. The ongoing expenses for a box truck business include gasoline, truck repairs and maintenance, property taxes, equipment depreciation, interest on loans or credit cards, insurance premiums, miscellaneous service fees, and company drivers’ salaries.
Is owning a box truck business profitable?
Yes, a box truck business is profitable.
There are a number of reasons why owning a box truck business can be profitable. One reason is that there is a high demand for box trucks. This is because they are versatile vehicles that can be used for a variety of purposes, such as moving and delivering goods.
Another reason is that the cost of running a box truck business is relatively low. This is because the trucks can be operated with a minimal amount of employees, and the fuel costs are relatively low.
Finally, there is a significant margin for profit in the box truck business. This means that there is room to make a good profit even if the business is operated efficiently.
Why do box truck businesses fail?
Some box truck businesses fail because they are not able to generate enough revenue to cover the costs of running the business. This can be due to a number of factors, such as high overhead costs, competition from larger businesses, or a lack of demand for the product or service offered.