How to Start a Local Hauling Business
Starting a hauling business is something just about anyone can do with little in the way of upfront costs. If you already own a pickup truck, chances are you've been doing some hauling already for family, friends and neighbors. Starting your own pickup truck hauling business means you can get paid in cash rather than hugs and baked goods. Provided you only haul locally without crossing state lines, you'll need a truck, some hauling equipment, insurance and a business registration.
If you don't already own a pickup truck, you will likely want to get a one-ton truck, which can carry 2,000 pounds. A half-ton truck with a load capacity of 1,000 pounds is great for moving furniture or opening a delivery service, but you will be restricted in what you can and cannot haul.
The benefit of a pickup truck is that you can also use it as a personal vehicle when you're not working. The drawback is that it has an open cab, and it won't be suitable for larger loads. If you already have a good client base and think you need something with a bigger capacity, a larger truck may be preferable:
- Cargo van: Haul up to 3,500 pounds and 404 cubic feet
- 12-foot truck: Haul up to 3,100 pounds and 450 cubic feet
- 16-foot truck: Haul up to 4,300 pounds and 800 cubic feet* 22-foot truck: Haul up to 10,000 pounds and 1,200 cubic feet
- 26-foot truck: Haul up to 10,000 pounds and 1,700 cubic feet
Gas mileage between these vehicles is about the same; however, a larger vehicle will likely cost more. Having a brand-new truck may be great for the ego, but the more your truck costs, the more hours you'll have to work just to keep out of the red. A sturdy used truck with low maintenance requirements is usually ideal.
Once you have your truck, you're going to need some equipment for moving items in and out and securing your loads. To begin, you will need at least one hand truck or dolly. There are different shapes and sizes for different jobs. If you're moving refrigerators or appliances, for example, you will want an appliance dolly.
The specific equipment you need will depend on what you're hauling. In most cases, moving blankets, ratchet straps and bungee cords should be on your shopping list. If you have a pickup truck, you will need a tarp to protect your cargo from the elements. Larger, heavier items may require heavy ropes or chains to keep them secure.
Check out the state and local requirements for operating an intrastate commercial vehicle. As long as you stick to local hauling, these are the only requirements about which you need to worry. In Michigan, for example, you will have to register with the regulatory and credentialing section of the Michigan State Police Commercial Vehicle Enforcement Division.
Depending on your state, what you plan to haul and the size of your vehicle, you may also need a commercial drivers' license. Your cargo can have additional requirements as well. Junk haulers, for example, need to be aware of hazardous waste transportation requirements.
Keep in mind that the laws are quite different for intrastate local hauling compared to interstate hauling. Once you cross that state line, you will likely have additional state requirements to meet, and you will have to register with the U.S. Department of Transportation to get a USDOT number.
In most cases, registering your business as a sole proprietorship should be fine, but if you're working with a partner, you should consider registering as an LLC or partnership. Talking to a lawyer or an accountant will give you insight on which type of company is best for your needs as well as what insurance you will need.
In most cases, you will need commercial insurance for your truck as well as liability insurance. If you already own your pickup truck, talk to your insurance broker about your plans because you will probably need to upgrade your insurance. Not only will the cost go up due to increased mileage but premiums for commercial vehicles generally cost more than personal vehicles.
Once your business is registered and all the paperwork is out of the way, it's time to start finding customers. Start with friends, family and neighbors and let them know your truck is now for hire so they can help spread the word. Get yourself some business cards and introduce yourself to any local businesses that might be a good candidate for your services. Put your company information on the door of your truck.
Finding customers online will save you a lot of legwork. Register a page on Yelp and post an ad on Craigslist offering your services. While you're on Craigslist, take a look for anyone posting ads for "hauling services needed". Sign up for GoShare if it's available in your city. It's an app service similar to Uber but for people who need hauling services.
If you're willing to work in bad weather, you'll likely find this will get you customers quickly and earn you plenty of referrals. Make sure you keep your truck in good repair so a mechanical breakdown won't stall the goodwill you've established.
If you're just looking to make some extra money with your pickup truck, working evenings and weekends may be all you need. If your goal is to grow your business into a full-time enterprise, you will need a business plan. A major part of your business plan will be to ensure that your income exceeds your costs.
Most costs are fixed and can be totaled and then averaged out to monthly payments, such as:
- Vehicle payments
- Licenses and registrations
Next, determine how much you want to make in profit each month and add this to your fixed costs. Then, divide the total by the number of hours you will work each month. Add the average cost of fuel per hour to determine how much you should charge per hour.
When you own a truck, every hour it's sitting idle in your driveway is a lost revenue opportunity. This is why business owners often partner with someone, especially when they have other jobs, in order to ensure they are getting the most revenue from their investment.
Alternatively, you may want to consider hiring someone on a part-time basis to do hauling for you when you're busy. This of course will mean additional costs, like added insurance premiums, wages and workers' compensation insurance. You will also need to register with your state and the IRS for payroll taxes.
Investing in a second truck is always something for which to aim, but it will also be a very perilous time for your business if you can't keep both vehicles busy. Before doubling your costs, consider hiring someone who already has his own truck and pay him a premium for using it. Another good option is to negotiate a deal with a truck rental company to use its vehicles as needed until you're certain that buying another vehicle is a wise investment.