Starting a business that will transport people or goods on public highways is similar to any other business startup in many ways. You must decide on a name and business structure, and purchase any necessary equipment. However, with a transport business, you also must secure specialized licenses, permits and insurance before you can make your first haul.
Type of Transport Business
First, determine the type of transport business you wish to start. If you plan to transport passengers, for example, your options include a limousine service, shuttle, taxi cab or charter bus. If you plan to transport goods, you'll need to decide what will they be, and whether you will be doing so with open or closed bed semi-trucks. Once you choose your transportation vehicle and cargo, you can move on to getting the necessary licenses and permits required.
Choose a name for your business. One option is to incorporate your legal name into the business name. If your business name doesn't include your legal name in some way, it is known as an alias, or doing business as name, and must be registered with the state. Usually, this occurs through the Secretary of State's office. If you set up your business as a corporation, LLC or S-corp, you must also register it with the state by filing Articles of Incorporation, or similar documents.
Licenses and Permits
Contact your state public utilities commission to determine what licenses and permits are required to operate your transport business. For example, if you plan to transport passengers in California, you must submit a charter-party carrier application to the California Public Utilities Commission and pay a filing fee. If approved, the commission will issue you the certificate or permit required for your business type.
If your business will transport people or products across state lines, contact the Federal Motor Carrier Safety Administration to determine whether federal licenses and permits are also required and what the application procedure entails. Depending on what you're transporting and type of vehicle used, you may have to register for a Department of Transportation number and Authority to Operate (MC number).
You'll need to purchase cargo and liability insurance. Several states, such as California and Washington, disclose insurance requirements on their websites. The FMCSA also lists insurance requirements on its website, as well as who must apply and specific forms that must be submitted.
Purchase the equipment necessary to operate your business. For example, if you're transporting passengers for sightseeing tours, you may need multi-seat cargo vans with large picture windows. On the other hand, if you're transporting perishable goods to grocery stores, you may require large refrigerated semi-trucks. You will also need to purchase a fleet garage to house your vehicles as well as maintenance equipment to keep them operational and in compliance with government regulations. Since you're just starting out, you may have to first raise capital for these and other routine expenses, such as payroll and inventory.
- California Public Utilities Commission: Passenger Carriers Subject to Permit or Certificate Requirements
- Virginia Department of Motor Vehicles: Licensed Transportation Services
- California Public Utilities Commmission: Charter-Party Carriers of Passengers Application Packet
- NZ Transport Agency: Running a Truck Business
- Progressive: Motor Truck Cargo Insurance
- Washington Utilities and Transportation Commission: Regulated Industries