The vehicle shipping industry in the U.S. is worth $12 billion as of 2020. Although the COVID-19 pandemic greatly affected vehicle manufacturing and sales, and consequently vehicle shipping, the industry is forecast to rebound as the economy reopens.
If you’re planning to start a car hauling business, there couldn’t be a better time to get into the industry. As vehicle purchases pick up from the COVID-induced slump, the demand for vehicle hauling services is rising.
So, what does it take to start a profitable car hauling business?
We’ve got expert insight for you. Buckle up and keep reading!
Gain Trucking Experience
Car hauling is a niche in the trucking industry. As such, it helps to get familiar with trucking before you can start a car hauling company.
No, trucking experience isn’t a must, but it will make your journey easier and enhance your chances of starting a successful car hauling business. The best way to get this experience is to start out as a trucking driver, although finding a logistics or operations management job in a trucking company can also prepare you for life as a car hauler.
If you take the truck driving path, you might want to secure the CDL A license. This permits you to drive car hauling trucks.
Draw a Business Plan
Drawing a car hauling business plan is a crucial step in your journey to starting a car hauling business. Among other things, the plan identifies your mission and vision, startup capital requirements, marketing strategy, and income projections.
If you’re not an expert in writing business plans, it’s advisable to hire a consultant who specializes in writing business plans for car hauling businesses. A car hauling business has many moving parts, so you want to ensure you’re getting the details right before starting up.
For instance, an experienced consultant will help you identify the pieces of equipment that you need to purchase, as well as the businesses licenses (including a DOT license) you need to secure. Car hauling businesses also have insurance requirements they need to meet.
There’s also a raft of other legal requirements to satisfy.
Raise Startup Capital
Car hauling is a capital-intensive operation. The hauling truck is by far your biggest expense, but there are other costs you have to keep in mind, including renting a commercial space and hiring staff.
Be sure to raise adequate capital before you open the business. Don’t get started with inadequate capital hoping that the business will start generating revenues quickly. If you run out of capital before the business starts making enough money, you could grind into a cash crunch.
Incorporate Your Business
Can you start a car hauling business as a sole proprietorship?
Yes, you can, but that’s not the ideal business structure. You don’t want to expose yourself to the liabilities that come with running a car hauling business. It’s advisable to set up an LLC.
Plus, if you want to hire, and you’ll likely need to hire truck drivers and other workers, your business cannot be a sole proprietorship. You need to obtain a federal tax ID number, which is not available to independent contractors or sole proprietorships that are not employers.
The Road to Starting a Successful Car Hauling Business Is Clear
As long as cars are manufactured and sold, the demand for car hauling services will always be there. Capitalize on this demand by starting a car hauling business. Use this article as a guide, and soon you’ll be the proud owner of a successful business.
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