What is Hotshot Trucking?
In its most basic form, the term “hotshot” is the process of hauling ( less-than-truckload or LTL) loads. They’re usually sensitive to time and typically transported to one location.
For instance, when a construction firm requires a particular piece of equipment to be transported from one job location to another, they’ll typically “hotshot” it, hiring an employee to move the equipment from one place to another in a hurry.
Instead of being in standby mode Hotshot drivers frequently locate freight in load board for hot shot trucking. This is an excellent method to earn extra money by being an independent operator or owner. How do you begin your own hot-shot trucking company? I have researched and let’s look into what I mean by following some steps.
Below are fourteen steps that will help you navigate the entire process from beginning to completion.
Step 1: Limit your Finances before Starting a Hot Shot Trucking Business.
When you’re going for the hotshot to start a trucking company start by taking inventory of the equipment you have as well as what you will have to purchase and ensure you have enough cash to pay for the cost. Additionally, you’ll require operating funds to help to get through the initial phase until your hotshot company is profitable.
It’s crucial to decide the best way to be able to pay yourself and determine the minimum profits you’ll need to achieve success. Also, you’ll need processes as well as tools that track and keep track of expenses, payments as well as other vital information.
If you require financing to begin a hotshot trucking company, there are a couple of possibilities. You could seek loans from relatives and friends or look for investors. In order to convince people to provide in obtaining financing, you’ll need a company plan. The things we discussed in this article will be a component of that.
Step 2: Pick an Area of Expertise to Start a Hot Shot Trucking Business.
If you’re only starting out it’s likely that you lack the tools to handle different types of loads. Therefore, you’ll need to focus on one thing. There are various kinds of trailers and trucks to take on different kinds of loads. The majority of hotshot trucks are medium-sized and are generally larger than a pickup.
The classes for trucks are:
medium-duty trucks have a limit on weight between 10,001 and 14,000 pounds. The majority of contractors and last-mile delivery delivers utilize this classification; however, they can also be used to transport smaller hotshot loads.
medium-duty trucks are able to carry a weight limit of 14,001-6,000 pounds. They’re larger trucks, however, they’re classified as commercial.
medium-duty trucks are able to carry a maximum weight of 16,001-19,500 lbs. A majority of the lightest commercial trucks fall under Class 5.
You may also utilize trailers for certain jobs:
- Bumper-pull trailers tend to be smaller and are less costly. They’re simple to use which is why they’re well-liked by civilian drivers. However, they’re not able to haul more, typically smaller than 10,000 pounds.
- Gooseneck trailers are more compact in their turns per turn than bumper pull trailers. They also tend to transport bigger, heavier loads. This can be advantageous in transporting construction sites or other regions where there’s limited space for turning.
- Deck trailers tilt to an angle. This makes it easier to lift heavy cargo.
- Trailers with lowboys are equipped with an extremely very low center of gravity that is perfect for the most heavy-duty load.
- Dovetail trailers are ideal for transporting equipment or vehicles that have wheels.
The advantage of focusing on an enviable business is the possibility to transport only light cargo. You could also use small trailers or refrigeration trucks for medical or perishable items.
The more you know in a particular area, the easier you will find it easy for clients to recommend them to similar jobs. Selecting your field of expertise could require some trials and errors until you determine what will work best for you within the areas you would like to be working in.
You’re always able to shift, but make sure you select an area that you’re interested in from the beginning.
Step 3: Apply for an Official Commercial Driver’s License (CDL).
You’ll need a commercial license If you don’t have one. Licenses are issued at various levels, based on the kind of vehicle you’ll be driving and the kind of load that you’ll carry. For example, if you’re carrying medical items, it is possible that you require a hazmat certificate.
The laws vary from state to state and there are many driving schools and test options.
Step #4: Set Up an LLC for Hot Shot Trucking.
To shield yourself from liability for liability, you must have to set up LLC that is a limited liability (LLC) or another corporate structure. This will help you avoid the double taxation you’ll experience in certain states if you have C-corps or other structures.
In the majority of States, LLC forms can be filed at the secretary of state and many have online filing options available.
Step #5: Open up a Business Bank Account.
After you have your LLC registered and you have your EIN, the next step to start your hotshot trucking business is to establish a business bank account. This is necessary in order to keep your personal and business personal financial affairs separate. This is essential during tax season.
However, it’s also essential to keep track of the income and expenses and decide whether your trucking business is making money.
Many local banks offer great business checking plans and some even offer online banking.
Step #6: Get an MVR for Hot Shot Trucking. (MVR).
In most places, getting a vehicle registration is quite simple, but it’s essential to be prepared in case there are any delays. There is usually a fee, and while some states provide online services or digital files, others need you to purchase an actual copy or wait for it to be shipped to you.
Step #7: Apply for a Department of Transportation (DOT) number.
This part of adhering to hotshot trucking standards is a little more challenging than the others, but there are options.
- By establishing the company’s own Department of Transportation (DOT) and MC number, which is linked to your LLC, you can apply for your own transportation authorization. If you only operate hotshot trucks, you might not think it’s worth it to have the authorization you need because it necessitates a lot of paperwork.
- Another option is to lease an authority from another company, which will be able to put their number on your vehicle. You essentially “lease” your truck from yourself. Many companies charge for this service, yet it is the most cost-effective option.
Whatever way you choose, you’ll require a DOT ID number to run your business.
Step #8: Purchase or Lease the Truck you Want.
If you don’t have the proper type of vehicle then you’ll need to lease or purchase trucks for the hot shot trucking business. Leases offer some benefits and generally let you get more modern or more advanced equipment than you would otherwise be able to afford.
However, with a lease, you do not have ownership of the vehicle. You can purchase your lease in the future; however, it could be more costly over the long term.
In the event that you loan a vehicle and then purchase it in full after you’ve completed the repayment of the loan. Cash payment is a more advantageous option. Being the owner of your truck means you won’t be paying monthly similar to leasing.
Many of the top truckers lease their trucks for a while and then shift to ownership once they have more cash on hand and their business is more stable.
Step #9: Buy the Equipment you Need.
When you’ve got your vehicle, it’s time to buy a trailer. Also, you’ll need tie-downs to come along and other equipment for the hot shot trucking business plan.
There may be a specific hitch for your vehicle or multiple. Based on the lanes you travel in and traffic conditions, you may require flags, lights, the safety triangle, extinguishers for fire, and other equipment that is used to ensure compliance with the regulations of the DOT.
Step #10: Obtain the Appropriate Amount of Insurance.
There are you will require a number of different types of insurance. Business insurance shields your LLC from the risk of liability as well as other claims which is why you’ll need automobile insurance too. Talk to an insurance professional with experience who is knowledgeable about the industry of transportation to discuss the options available to you.
An agent can assist you to conduct a business assessment and ensure that you’re equipped to safeguard your business, yourself, and your family in the event of a disaster.
Step #11: Get your Vehicle for Hot Shot Trucking.
Making sure your truck is ready for use includes installing any other equipment or hitches that have DOT or MC numbers, as well as making sure that you have the proper necessary lights, placards, and other accessories to be in compliance with the regulations of the DOT.
For your comfort and security for your own safety and comfort, install GPS or phone holders so that you can make sure you don’t have to use your hands for driving
Step #12: Decide on the Rate per mile (RPM).
If you’ve put together your plan for the business, you likely defined what you require to be able to run your business successfully.
This is the perfect time to determine what your rate-per-mile (RPM) is going to be. Take a look at what competitors are charging, so that you’re within your budget.
Step #13: Find the hotshot Loads.
After you’ve put everything up, you’ll need to transfer your truck. The hotshot load board is an excellent way to get loads near you from reliable and recognized vendors. The most convenient way to do so is to use the Truckstop.com Load Board. The more money you make depends on how quickly you can locate loads and how little downtime you have.
The load boards can also help you prevent a deadhead run, which is when you and your truck drive around without loading and hence don’t get paid.
Step #14: Utilize Invoice Factoring to pay Quicker.
When you begin your trucking hotshot business cash flow is essential. Utilize factoring to be paid quicker. By using Truckstop.com Factoring, you can submit your completed invoice and run it to be paid immediately.
How do you begin an exciting company? Begin with your financials. Establish your business with proper documentation for your IRS along with your states. Make sure you are DOT-ready, purchase your trailer and truck and ensure that you’re insured and secured. You can then use load boards with hotshots to identify the first load you’ll ever make. You’ll be driving and earning money quickly.
In short, the best fourteen steps lead you to start a trucking business with a proper plan successfully. For guidance, avail services of Trinity 3 Logistics by calling at (404)513-0612