The 4 corner stones of starting a trucking business – part two

Starting a trucking business, as we pointed out in the first part of this series, can be profitable, but like any business, it is not without potential pitfalls. There are always certain risks, and in logistics, there are the additional risks of accidents etc. If however, you set up, complying with all the necessary procedures and choosing the right vehicles, the risks can be greatly minimised.

The 4 cornerstones of starting a trucking business articles should assist you and get you steering a clear path to success. This is primarily about starting a trucking business in South Africa, but many of the principles are applicable anywhere.

The 4 cornerstones.

The essential 4 cornerstones to ensure you lay a solid foundation are:

  1. 1. Set up – Having a great business plan and covering all the bases
  2. Funding – Ways to raise start-up and on-going capital
  3. Compliance – Having the right licenses and permits to operate legally
  4. The vehicles – Hire or buy? – and what to buy

In this second part, we will cover the last 2 cornerstones.

  1. Compliance

Firstly it is necessary to register the business. You can get a step by step guide on how you register your business at www.cipc.co.za

Then there are 2 other primary compliance requirements:

Obtaining the right business licences and permits

It would be an excellent idea if, as a Manager or Owner of the business, that you try to get a National Certificate in Professional Driving. This qualification gives you not only driving skills but offers an extensive range of skills appertaining to running the business including Customer relations; financial planning; freight loading; occupational health and safety and many more.

It is advisable to do background checks and hire only qualified professional Drivers. They must have a heavy-duty licence – code 10 to 14. Drivers of the following vehicles must hold a license card, endorsed with an appropriate PrDP:

  • Heavy goods vehicle, loaded or empty – (codes C1, C, EC1 and EC)
  • Taxi or other vehicle carrying paying passengers (e.g. an ambulance)
  • Bus above 3 500 kg GVM – (codes C1, C, EC1 and EC)
  • Bus or minibus with seating for more than 12 including the driver

Finally, the driver must be responsible, of sober habits and at least 25yrs old. You also need permits for the type of load he is carrying. Check this with CIPC too.

  1. Vehicles

Choosing the right vehicle is critical. Ask a few important questions:

Does the vehicle accommodate the needs of your cargo? If you are transporting perishable items, for example, you would need to consider a refrigerated compartment.

Is buying or leasing equipment a better option for your new business? We believe that continual leasing means you never build the assets for your own business. Instead, if you can be financed, consider purchasing the vehicle. You can then, in your downtime, lease that vehicle out yourself.

If buying, should you buy new or ‘pre-owned’? Remember that you have this option and you can get good deals on affordable quality demo and low mileage used vehicles from manufacturers like FAW that will serve you and your business well.

Get the right trucks for the job

Remember that FAW trucks offer any trucking business the best possible option if they choose to purchase new or used vehicles.

Contact us or go to our website to find a dealership near you and find out about our incredible range of tried and tested top quality freight carriers, truck tractors, tippers and mixers, which come standard with competitive warranties, 24hr roadside assistance and are built in South Africa for Africa.

We certainly hope this series on The 4 corner stones of starting a trucking business will give your business a solid foundation and remember as you build it to partner with FAW, who will be with you to help you grow – in this new decade – and beyond!

The 4 cornerstones of starting a trucking business – part one

Well, it’s not only the start of a new year but the start of a whole new decade. What better time to bite the bullet and get that trucking business that you have always wanted finally up and running.

It can be profitable, but like any business, it is not without potential pitfalls. There are always certain risks, and in logistics, there are the additional risks of accidents etc. We believe, however, that where there is a will, and the right actions are taken from day 1, there is always a way to succeed.

We hope this small 2 part series on the 4 cornerstones of starting a trucking business will assist you and get you steering a clear path to success. Obviously, this is essentially about starting a trucking business in South Africa, but many of the principles are applicable anywhere.

The 4 cornerstones.

The essential 4 cornerstones to ensure you lay a solid foundation are:

  1. 1. Set up – Having a great business plan and covering all the bases
  2. Funding – Ways to raise start-up and on-going capital
  3. Compliance – Having the right licenses and permits to operate legally
  4. The vehicles – Hire or buy – and what to buy

In this first part, we will cover the first 2 cornerstones.

  1. Set up

As with any business, it is essential to have a ‘Business plan.’ From day one, decide what type of business you want to have. Will it be a small contained business with one or two vehicles – or are you aiming for a fleet and big business in the long run?

Will, you mostly hire free-lance Drivers, or would you prefer to hire permanent staff over which you believe you will have more control. Will you outsource or handle your own administration, finances, project management, marketing etc.?

Perhaps a list of costs that will be incurred will help to get an idea of what kind of initial and on-going funding you will require. Take all these into account:

Administration and Accounting – the cost of handling this

Office supplies and on-going cleaning etc.

Premises – Hire or purchase of business premises and include garage facilities for vehicles

Advertising and marketing

Hire or purchase of vehicles

Servicing and maintenance of vehicles (This may be initially included in some deals with reputable truck dealers if you are buying new vehicles)

Registration and certificates, petrol, tolls, traffic fines and parking costs

Drivers hire or salaries

Think long and hard about this to ensure you cover all the bases in your proposed budget and establish firm, clear goals for the business, in the short and long term. This is all part of the ‘Business plan’ – and ensure the inclusion of precisely what profit margins you predict, to make your proposal to funding sources as attractive as possible.

  1. Funding

Having established our business plan and cost structure, you will, most likely, need to raise some form of funding. If you have the luxury of doing so, always look for assistance from family or friends, who may offer interest-free loans, but remember your commitment to them is just as great as obtaining formal finance.

You other options then are to:

Form a conglomerate of family, friends, and small investors to all input a smaller amount, until you have your required capital. This is called ‘Crowdfunding.’

 

Appeal to bankers for a business loan

 

Appeal to any local ‘small business’ start-up funding association

 

Talk to an ‘Angel’ investor. In this case, it is better to ensure it is an investor with knowledge of and experience in your industry

Get the right trucks for the job

We will cover this more extensively in the ‘Vehicles’ cornerstone in part 2 of part of this article, but remember that FAW trucks offer any trucking business the best possible option if they choose to purchase new or used vehicles.

Contact us or go to our website to find a dealership near you and find out about our incredible range of tried and tested top quality freight carriers, truck tractors, tippers and mixers, which come standard with competitive warranties, 24hr roadside assistance and are built in South Africa for Africa.

Make 2020 your best year ever as you get your new trucking business off the ground and let FAW partner with you all the way to the top!