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How to Start a Box Truck Business

By Adnan Farooqui

Published on 16 Mar 2023 7 min read

What do you think is required to tap into a U.S. industry worth over $700 billion? Probably a very large team and a significant investment, right? Wrong! The vast majority of overland freight movement in the country happens through trucks, so there’s plenty of business to go around. You don’t need to be a logistics behemoth to take advantage of these opportunities in the trucking industry. A humble box truck is all you need. Let’s discuss how to start a box truck business.

Is a Box Truck Business for You?

You must consider some of the basics of the box truck business when deciding whether it’s an industry you want to participate in. A box truck is a type of delivery truck that has a rectangular cargo area attached to its chassis. It’s typically larger than a van but smaller than a semi-truck or trailer. The Federal Highway Administration’s truck classification system considers box trucks as medium-duty, which means a box truck driver doesn’t need a commercial driver’s license (CDL) to drive the vehicle. 

Box truck services typically haul cargo for last-mile deliveries as these vehicles can better navigate urban roads. The cost of buying a box truck will vary based on the make and model of the truck, but you can generally expect to pay between $15,000 to $50,000. It can be higher if you opt for one that has a refrigerated storage area. Your startup costs will also include expenses for loading equipment, harnesses, pallets, and more. 

10 Steps to Start a Box Truck Business

Starting a business in this industry can be very rewarding, but it’s important to get the launch right so that you can quickly start hauling cargo. Before you can be your own boss and start a trucking company, there are a few steps that you need to keep in mind. 

Develop a Business Plan

A business plan is vital to your success. It should outline the goals, strategies, and milestones your box truck business needs to achieve to succeed. A business plan is essentially a document that provides a roadmap for you to follow as you work to establish and expand your business. 

A good business plan will include a market analysis of the industry. Research the market thoroughly to find more opportunities and potential risks. Look at the competitors closely to figure out how you could gain an edge. Understand their pricing strategies and adapt yours to provide more value to customers. Include financial projections in the plan as lenders are particularly interested in the earnings potential of businesses. 

It should also include a detailed operational plan that highlights how the business will expand in the future. Lastly, include your ideas for marketing the business through various mediums to bring in more customers.

Complete Trucking Documents

With the business plan in hand, start by filing all of the relevant paperwork. Even though you don’t need a CDL to drive your own truck, there’s still a lot of documentation that you need to complete before you can start offering box truck services. 

• File a BOC-3 form

Interstate transportation companies have to file a Blanket of Coverage (BOC-3) form with the Federal Motor Carrier Safety Administration (FMCSA). Through this form you designate an FMCSA agent; this can be a person or an office that is present in all of the states where you intend to do business. The agent can then accept and forward any legal papers on behalf of your company.

• Apply for a Motor Carrier number

The Motor Carrier number is an interstate operating authority given by the FMCSA. You may need to submit several documents such as proof of identity, liability insurance coverage, and bank statements to the FMCSA. There’s also an application fee of $300.

• Complete Unified Carrier Registration (UCR)

You’re required to complete the Unified Carrier Registration if you plan to haul cargo across state lines. This is a federal program that mandates all commercial vehicles traveling interstate to be registered with the system. The UCR needs to be renewed annually.

• Obtain a commercial driver’s license

It’s not mandatory for box truck owners to have a CDL if their vehicle’s gross vehicle weight rating (GVWR) is 26,000 pounds or less. If you plan on hauling cargo with a GVWR over 26,000 pounds, you’ll need to get a CDL or at least hire drivers that have a CDL.

Decide on Business Structure

Choosing the right business structure is important when setting up your delivery structure. These are the four main options when establishing a business entity: 

• Sole proprietorship

There is no separation between the business and the owner in a sole proprietorship. All of the income flows to the owner, who also remains personally responsible for business liabilities, debts, and taxes. It’s easier to set up and a viable option if you plan on driving your own truck.

• Partnership

The primary difference between a partnership and a sole proprietorship is that the former includes two or more people. All pre-tax income goes to the owners, and they remain liable for all obligations of the business. A partnership will be suitable if you are launching the business with other people. 

• LLC

A limited liability company (LLC) provides liability protection similar to that of a corporation while retaining the simplicity of the sole proprietorship. It limits the personal liability of the owner for the obligations of the business. Consider incorporating an LLC if you intend to raise a fleet of box trucks.

• Corporation

A corporation provides personal liability protection to the owners. Profit sharing is done with shareholders through dividends. Corporations are a good option if you wish to raise outside capital.

Register Your Business

After deciding on the business entity, you must register the business with your state. There are separate documentation requirements for each entity type. The fillings will be done with the Secretary of State. There may be additional requirements for permits or licenses depending on the state.

Open a Bank Account

A separate business bank account is necessary to keep your personal and business finances separate. It will also make it easier for you to track income and expenses. A business checking account is typically the best option. You may also choose to open a business credit card to meet expenses between payments. 

Get Funding

It’s possible to obtain funding to launch a box truck business. Most small business owners invest their personal savings and also consider raising startup capital through loans from friends and family. You can also apply for a small business loan at a bank or credit union. Small Business Administration (SBA) loans are also available for a trucking company. To get a small business loan, you’ll need to provide lenders with a business plan. Some lenders may also require a personal guarantee.

Acquire a Box Truck and Other Equipment

With the funding secured, buy the ideal box truck based on your business plan either through a box truck lease or, if the capital allows it, an outright cash purchase. Depending on the cargo you plan on hauling, you may need to buy additional equipment such as a pallet jack, load-securing harnesses, ropes, etc.

Buy Business Insurance

Don’t start hauling cargo without having adequate business liability insurance. It will protect you in the unfortunate event of an accident and the legal liabilities of property damage or bodily injury that it can create. 

Get a Location and Hire Employees

You’ll need commercial space close to the areas you’re targeting. It should also have easy access to a variety of transportation routes to ensure fast and timely delivery of cargo. If you have multiple box trucks, consider investing in a piece of land that’s big enough for parking and maneuvering the trucks. 

Owner-operators don’t need to hire employees initially, but it’s important to position your business for expansion from the beginning. Once it’s financially feasible to add more trucks, start hiring experienced and qualified drivers to expand your fleet. You’ll also need to hire experienced loaders and unloaders to assist with operations.

Market Your Box Truck Business

Create a marketing strategy that targets customers both online and offline to increase brand awareness. Rely on social media marketing to advertise your box truck services and create a good website that lists your services and provides contact information. 

To promote your business offline, consider distributing flyers to businesses in your area. Attend networking events and trade shows to unlock new opportunities. You can also take out advertisements in business magazines and newspapers to reach a targeted audience.

Don’t Make the One Mistake That Ends Box Truck Businesses

It’s relatively simple to start a box truck business. Choose the desired entity type, file the relevant paperwork, buy or lease a truck and you’re good to go. However, there’s one crucial mistake that you should never make. Managing cash flow is particularly important in this business because if you’re unable to fund operations between payment cycles, your truck won’t make it out the gate.

That’s why you need doola Bookkeeping to manage your cash flow. It accurately tracks every transaction to provide you with a clear view of the finances, helping you adapt and make changes when required to ensure your box truck business remains in operation.

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