What are the steps to starting a box truck business?
Also known as a box van, or cube van, box trucks are commercial trucks with an enclosed cargo area used for transport. You’ll find this helpful guide if you’ve always wanted to start a box truck business.
Here is how to start a business with a box truck.
Starting a Box Truck Business
We’ve included comprehensive steps for starting a box truck business.
Key areas covered include determining your suitability for the company, researching the idea, obtaining funding, applying for business permits & licenses, opening a bank account, registering, and marketing your business.
Owning a Box Truck Business – Is This Right for Me?
When deciding on the type of business you want to do, assessing your suitability for such a business is necessary.
Now, it’s no secret that box truck businesses serve various clients in different industries. So, it’s only natural to know where you fit in.
Love for driving is one of the first indicators of whether you’re a good fit. Secondly, you’ll need to consider the niches available.
You may be drawn to one of several industries like moving services, junk hauling, advertising, catering, local store delivery, and on-demand courier service.
Other niches you might find comfortable include package delivery, storage service, mobile hair salon, food truck, etc. These are examples of niches you can serve with a box truck business.
As such, you need to consider your options before making a decision.
What You Need to Start a Box Truck Business
Researching the Market
One of the first things you need to do when starting is to assess the market. In other words, you must research the demand for box truck services within your area.
Now, it’s important to note that demand isn’t the same everywhere. While it may be high in some places, the opposite applies to others.
Also, your preferred niche will determine the type of box truck business idea you seek (potential clients). Your research will also have to identify competitors, as well as the overall feasibility of the business idea.
Research findings are also used to improve box truck operations.
Choosing Your Business Structure
Starting a box truck business will require choosing your legal structure like any other business enterprise.
What you choose determines how much liability your business is exposed to. Also, the legal structure you choose determines your tax burden.
Some of the most common business structures people pick from are sole proprietorship, partnership, limited liability company (LLC), and corporation.
You’ll need to seek professional advice from a legal expert in finding the most suitable legal structure for your box truck business.
Write your Plan
A comprehensive business plan needs to be written for your box truck business.
This offers many benefits, including showing investors how serious you are. It also serves as an action plan while also assisting in decision-making. There’s also heightened interest from investors, etc.
Your plan should have essential sections like the executive summary, company description, and market analysis. Other vital components include competitive research, description of management & organization, and breakdown of products & services.
Other equally important components of your should include the sales strategy, marketing plan, request for funding, and financial projections. Upon completion of the business plan, it will serve as a clear roadmap for your operations.
Funding for your box truck business is crucial.
You’ll need to have adequate funds to establish your operations successfully. Speaking of funding, there are various sources to acquire such. These include personal funds (savings), crowdfunding, and SBA loans.
Other funding sources for a box truck business include bank loans, venture capital, friends & family, and government grants. Exploring these loan options is essential to determine which offers the best deal.
From experience, SBA and bank loans are the most popular options.
Applying for Business Permits & Licenses
Part of starting a box truck business includes getting the proper permits and licenses.
Now, there are several of these you need to know of. These include completing the unified carrier registration (UCR) and the federal DOT and motor carrier authority numbers.
Other permits & licenses to apply for include the international fuel tax agreement (IFTA) decal and filing a BOC-3 form. It’s important to note that the specific permits & licenses required for your type of box truck business will be determined at the point of application.
Opening a Bank Account
To start a box truck business, open a separate bank account.
In other words, your business and personal accounts shouldn’t be mixed. Opening a budget for your box truck business helps limit your liability. Also, it helps build credibility with your clients.
Other key benefits of opening a bank account include organizing your business records. It helps with the company’s classification by the IRS and provides enhanced monitoring of business progress.
To open this account, certain documents, like your business license, an EIN or federal tax ID, and a copy of your DBA (doing business as) filed with the state, will be required.
More account opening documents include a certificate of good standing, personal identification, and articles of incorporation.
Registering the Business
As stated earlier, your box truck business needs to be fully registered. Registration must be in the state where you live or wish to do business.
In other words, registration requirements will mainly vary by state. Here, registration includes many things, including taxes, business licenses & permits, etc.
A little inquiry about registration guidelines and requirements for your state will bring up all the information you need.
Choose your Box Truck Type
The type of box truck business you wish to start will determine the vehicle type you go for.
Now, several types of box trucks are based on design, with different capacities. These include standard box trucks, utility box trucks, refrigerated box trucks, and landscaping box trucks.
There’s also the flatbed type. In terms of capacities, these also vary as you have light-duty, medium-duty, and heavy-duty trucks. It would be best to decide what style you want to go for.
This will be determined by the type of job(s) you wish to use it for.
Get Business Insurance
Getting business insurance is essential as it protects you from liability.
Now, you need to know what insurance type to go for, as there are different types with varying degrees of coverage. The most common styles include business property, general liability, equipment breakdown insurance types, etc.
These steps to starting a box truck business can prove helpful when carefully and diligently implemented. It’s crucial to make further findings or research on each point raised to guarantee a successful launch.