How to Write a Trucking Business Plan
The Trucking industry is a growing trend for several reasons. First, our culture is relying more and more upon home delivery as compared to shopping at retail stores. From this, the need for over the road trucking services to various wholesale outlets has been growing at an above-average rate over the last several years.
A second reason for the popularity of the trucking business is thus your demand for truckers. Industry experts have found that there are over 1.5 million trucking jobs available currently. This means that there is a severe shortage of truckers. With the severe shortage for truckers, truckers currently in the industry that are working for someone else often seek to become self-employed. A final reason for the popularity of the trucking industry would be that truckers often make an above-average salary as compared to other industries. Based on research from our business plan writer, truckers make approximately $73,000 a year.
In contrast, the average national income is about 56,000. Because of the attraction of the trucking industry, the need for trucking business plans has grown in correlation. As a result, our business plan writer has compiled some thoughts and ideas about how to write a professionally prepared trucking business plan.
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Executive Summary for a Trucking Business Plan.
In the executive summary section of the Trucking business plan, make sure to first discuss what type of business your organization will be. For the most part, our business plan writer has found that most trucking businesses are sole proprietors or limited liability companies. This is because truckers often work with brokers to secure short-term transportation jobs. As a result, their insurance often is enough to cover any liability. When a trucking company expands to more than one truck driver, then the limited liability company structure is often preferred. Regardless of which structure is chosen, make sure to include this discussion in your trucking business plan’s executive summary.
Also, in the executive summary section, make sure to discuss how your business will look and feel for customers. Some trucking business owners secure job contracts from brokers. Other truck owners receive jobs from manufacturers. Depending on the job source, a trucking company will structure its business operations model accordingly. From this, make sure to have a discussion in your business plan executive summary about how your business models will align with your customers' needs.
Company Information for a Trucking Business Plan.
The company information section of a Trucking business plan should start by explaining the problem that the company will solve for the client, then address the “Who, what, where, when, why, and Hows.” A common problem that a trucking company solves for the customers is a need to transport products from one location to another. This problem is transferable over various trucking companies. For example, over the road truckers usually, transport products from manufacturers to wholesalers. Whereas local and regional truckers will transport products from warehouses to retailers or directly to consumers. As a result, writing up the problem section of the business plan in the company information section is often pretty straightforward.
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Product Description for a Trucking Business Plan.
Trucking businesses generate revenues by transporting products from one location to the next. The main way that companies charge is through mileage. However, for the trucking business, most drivers specialize in transporting specific product types. For example, some drivers specialize in hazardous material transportation. Whereas other drivers may have experience with transporting refrigerated or frozen goods. From this, make sure to describe your niche transportation service in your trucking business plan. Also, our business plan writer recommends that an estimated average charge per mile included in this discussion.
Competitive Advantages for a Trucking Business Plan.
The Trucking industry has been growing substantially over the last several years thanks to the continued need for transporting products from one location to another. As noted in the previous section, a common competitive advantage for a driver is their specialty for transportation. Specialties may include transporting hazardous materials, flatbed truck driving, refrigerated and frozen goods transportation, and other specialties. Just because you’ve identified a specialty in your product description section, make sure to go into details as to how you will differentiate your company from other specialist drivers. Some competitive advantages that may be listed in a trucking business plan could include using technological advances for logistical planning, continued networking, and utilizing one or more business brokers to ensure continued business.
Location Description for a Trucking Business Plan
The location for a new Trucking facility is critical for the success of the business. For the interior of the business, solo truck driving companies actually use the cab of the truck as an office. Because of the constant travel, having a home location is not only not necessary but also often a waste of money. When a truck driving company starts to employ more truckers, then a home location is necessitated. This home location should have one or more desks for the owner as well as any assistance needed. Square footage for this type of facility often ranges from 500 to 1,000.
As for the general location of the Trucking facility, our business plan writer has found that these types of businesses do well in locations near interstates and in areas with a large parking lot. As you can imagine, truck driving companies need areas for parking large rigs. As a result, most truckers when they start their own business expansion to areas where there is a small building for office work and a large parking lot for parking big-rig trailers. Finally, these facilities must be located near interstates that are easily accessible.
Target Market for a Trucking Business Plan.
The common Trucking target market is dependent upon truck drivers or trucking company specialty. For example, if a truck driving company specializes in transporting hazardous material, then its target market will be manufacturers of hazardous materials. Also, the target market may be brokers who have extensive networks with other hazardous material manufacturers. In contrast, truck driving companies that specialize in refrigerated and frozen goods transportation would target food manufacturers. Just keep in mind, when deciding upon your target market, our business plan writer strongly recommends you refer back to your problem statement. Whatever the problem that your trucking company is trying to solve, make sure that your target market has a specific problem. Finally, once the target market is identified, summarize the information in your target market section of your trucking business plan.
Industry research for a Trucking Business Plan
Based on quick research from our business plan writer, the main industry in which Trucking competitors compete in the long-distance freight trucking. The long-distance freight trucking industry transports products from a manufacturer to wholesalers across the country. In the last 12 months, the trucking industry as a whole reached about $220 billion in revenues. In the last five years, our business plan writer has found that the annual growth rate in the trucking industry was about 2.6%. In the next five years, industry experts project a slightly decreased growth rate in the trucking industry at about 2.3%. About 470,000 trucking companies are operating in the US. This shows that the industry is significantly fragmented. However, trucking business owners were able to generate about $13.2 billion in revenues. Because of the labor intensity in the industry, wages of about $57 billion were paid out.
Revenues were generated by conducting various services. For example, our business plan writer found that approximately 67% of all revenues were generated from product transportation. About 30% of revenues were generated from other services related to trucking. This shows that innovative trucking companies may be able to offer complementary services to augment their transportation revenue flow.
Owner and Management Section of a Trucking Business Plan
Owning and managing a Trucking business is quite different from other organizations. This is because owners are often their only employees. As noted in the industry research section, most trucking companies are operated and managed by the owner. From this, only one owner is often needed. However, as a trucking organization grows, management staff and positions are often required. Because of this, when writing a trucking business plan owner and management section, make sure to discuss the current state of the company, often, one employee. Then, make sure to follow this up with a future projection of different positions that may be needed. This practice will show ambition as well as forethought into the growth of your organization.
Funding Request for a Trucking Business Plan
Starting in the Trucking business is actually quite expensive. Business owners need to purchase a big rig as well as a trailer, in some instances. These costs may run between $50,000 to well over $150,000. When designing the funding section for a trucking company, start with identifying specifically the dollar amount needed or desired launcher business. The next step is to break down your funding needs into different categories. Examples of a trucking company funding requests categories would include the purchase of big rig, trailer, miscellaneous equipment, GPS systems, advertising, licensing, and office supplies/equipment like a laptop and smartphone. The next step is to align budgets to each line item. Once this process is complete, add up each line item or category and show the total at the bottom of your bulleted list. Just keep in mind, the dollar amount that you show for a total should be the identical number requested at the top or at the start of your funding request. By following this process, trucking business owners are able to be precise in the dollar amount requested but have room to move around funds through the use of category budgets.
Financials for a Trucking Business Plan.
Financial projections and financial models for a Trucking business plan should first start with estimating how many miles a trucker will drive daily. Next, the need for an average charge per mile is necessitated. Once this is done, to construct a financial projection for the trucking business plan, an average gasoline price is needed. With this foundation, a trucking business owner may construct a financial model to show daily revenues and costs. What’s is complete, use a growth rate to expand these numbers monthly. Once done, business trucking owners may then subtract fixed costs like any overhead such as truck payments, smartphone bills, and rent if needed. The final step is to then again use growth rates to reject an annual profit and loss statement. As always, once your trucking financial model is complete, included in your professionally prepared trucking business plan.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.