Starting a business is as exciting as it is daunting. Although there is a lot to think about when you start a trucking business, it is an industry with bright outlooks and there will always be a high demand for goods transportation. The market size of the road freight transport industry in Australia is $48 billion and comprises over 45,000 businesses.
One question most people have when they are thinking about starting a truck business is what startup expenses are involved.
In this article, we’ve put together some of the most common expenses to give you a better idea.
What Are the Most Common Expenses When Starting a Trucking Business?
The expenses you will need to consider when starting a truck business are:
- Business registration
- Permits and licenses
- Purchasing or leasing a truck
- Creating a business plan
- Hiring staff
1. Business registration
To be a legal business entity in Australia, you need to register an Australian business number (ABN). This is a unique 11-digit number that allows you to trade as a sole trader in Australia. ABN registration is free to do online yourself, or you will be charged a fee if you go through an agent.
Some business owners choose a company business structure over a sole trader structure as there are some benefits relating to tax and liability. The cost to register a company directly through ASIC is around $506. Again, the cost will be more if you go through an agent.
2. Permits and licenses
It’s important to get the right licenses and permits for the type of vehicle you’ll be driving. As licensing requirements are state-specific, you can find out what you’ll need on the ABLIS website.
3. Purchasing or leasing a truck
When it comes to getting a vehicle you have a few options: purchasing a new vehicle, purchasing a used vehicle or leasing. It’s important to weigh up the pros and cons of buying versus leasing vehicles and equipment. Do your research to suss out the best options and always get a mechanic to check the vehicle before you buy.
You also need to consider marketing and advertising costs and allocate a sufficient budget to get your new business name out there and attract new clients.
4. Creating a business plan
Creating a business plan is important not only to map out your goals and the direction your business is headed, but also to get funding if you need it. It gives you a much clearer understanding of your business, your market positioning and what you will have to do to achieve growth.
5. Hiring staff
Many truck business owners startup as sole drivers, but you will need to consider hiring extra drivers if your operations scale up. It’s Important to ensure your employees have appropriate licenses and that your insurance policies also cover them.
Having adequate truck insurance coverage is vital for all truck businesses. It not only gives you financial security and peace of mind, but it also ensures that you, your drivers and others on the road will get sufficient help and support in the event of an accident or emergency.
The type of insurance you need depends on factors such as the type of vehicle you have, your business operations and whether or not you employ staff. However, the main types of insurance for truck businesses are:
- Commercial vehicle insurance: Commercial vehicle insurance is broken down into comprehensive, third party and third party, fire and theft cover. As well as cover for accidents, damage, theft and fire, it can be tailored for downtime, towing fees, theft recovery and more.
- Public liability: Public liability covers you for legal and medical claims and expenses by a third party as a result of your business operations, whether it is your fault or not.
- Marine cargo insurance: Marine cargo insurance covers the property and contents you carry against loss, theft and damage you are carrying while in transit. This includes loading/unloading, non-delivery, weather perils and more.
Get an Insurance Quote with Truck Insurance HQ
Truck Insurance HQ is a leading insurance broker for the truck and transport industry in Australia. We have over a decade of experience and have worked with startups and established truck businesses to find the most comprehensive insurance packages that serve your business. With access to over 170 insurers, we are confident that we can find the right policy for you at the most competitive rates.