Starting a Hot Shot trucking business simply sounds cool. It gives you an image of Harley Davidsons, rock and roll, and Jack Daniels.
But in this industry, it’s not all fun and games and requires a generous amount of hard work and diligence to make it successful.
Whether you’re looking to start a full-time business or earn extra income, this guide will provide valuable insights for launching your hot shot trucking venture.
From choosing a business structure to applying for necessary licenses and permits, read on to explore the basic steps for starting a hot shot business.
What is Hot Shot Trucking?
First and foremost — let’s go over what hot shot trucking is to get a better understanding of this industry.
Hot shot trucking is a popular trucking service that involves the use of small- to medium-sized trucks for the quick and secure transportation of various cargo.
These trucks are primarily used for short hauls and are capable of transporting a wide range of items, including construction materials, large appliances, and agricultural products.
Hot shot trucking is known for its speed and efficiency in delivering time-sensitive items to their intended destinations.
Steps to Start a Hot Shot Trucking Business
Now that we have a basic understanding of what hot shot trucking is, let’s dive into the steps for starting a hot shot trucking business.
This will include everything you need to know from legal requirements to building a loyal customer base using digital marketing to showcase your services.
Below you’ll find 8 actionable steps to get your hot shot business up and running.
1. Decide if Hot Shot Trucking Is Right for You
It’s easy to get excited about starting a business that sounds fun and lucrative, but the reality of bringing it to fruition may be something you may want to reconsider.
So before we begin, let’s assess whether this type of work is a good fit for you.
Here are some fundamental qualities you ought to have for starting a hot shot business.
- Have an interest in trucking and a willingness to work long hours, often in demanding conditions.
- Be physically healthy and mentally resilient while having a strong commitment to safety and compliance with industry regulations.
- Understand this is a highly competitive market and be willing to deal with tight deadlines and demanding customers.
These are just a few examples of what you may encounter as a hot shot trucker, but they should give you an idea if this is truly what you want to pursue as a business venture.
If this all sounds good to you so far, let’s get into the details of starting your business.
2. Write a Hot Shot Business Plan
A well-crafted hot shot business plan is essential for any entrepreneur looking to start a successful business.
The plan should be comprehensive and tailored to the specific needs of the business — outlining the necessary steps for developing, launching, and operating the business effectively.
This consists of a number of things such as financial planning, market analysis, and competition research. Additionally, the plan should cover the operational and logistical aspects of the business, including the equipment and personnel required to provide quality service.
Finally, the plan should provide a comprehensive financial analysis, including revenue projections, cash flow estimates, and expense budgets to ensure that the business is financially viable.
By developing a comprehensive hot shot business plan, entrepreneurs can establish a clear path to success and increase the likelihood of achieving their business goals.
3. Choose Your Business Structure
Next up, you’ll need to choose the proper business structure that best suits the scope of your work and the legal requirements of your operations.
It’s important to research and consider the different business structures available, such as sole proprietorship, partnership, limited liability company (LLC), and corporation.
Selecting the appropriate business structure can ensure entrepreneurs that their business is set up for success — both in terms of legal compliance and financial stability.
You can read more about business structures and their advantages/disadvantages here.
4. Apply for Licenses and Permits
Once you have chosen the appropriate business structure for your hot shot trucking business, the next step is to apply for the necessary licenses and permits.
The specific licenses and permits required may vary by state and depend on factors such as the size and type of vehicle being used, the weight and nature of the cargo being transported and the location and distance of the trips being made.
By obtaining the proper licenses and permits, you can ensure that your hot shot trucking business operates legally and safely while avoiding any potential legal issues or fines.
Below you’ll find the main licenses and permits that are required for a hot shot trucking business.
Hot shot trucking requires a Commercial Driver’s License (CDL) because the trucks used are typically larger than 26,000 pounds, which is classified as a “commercial” vehicle.
To obtain a CDL, drivers must pass a series of written and practical exams along with a physical examination to ensure that they meet the requirements for operating a commercial vehicle.
The CDL application process may vary by state but typically involves training at an accredited school or through an apprenticeship program.
DOT Physical and Medical Card
In addition to a CDL, hot shot trucking drivers are required to obtain a Department of Transportation (DOT) Physical and Medical Card, as mandated by the Federal Motor Carrier Safety Administration (FMCSA).
The DOT physical is a medical exam that assesses a driver’s overall health and fitness to drive a commercial vehicle safely.
The exam includes a review of medical history, blood pressure, and vision checks, plus other physical assessments.
Once the driver passes the DOT physical, they are issued a Medical Card — a document that must be kept on their person at all times while driving.
The Medical Card serves as proof that the driver is medically fit to operate a commercial vehicle and is required for legal compliance.
Federal Employer Identification Number
A Federal Employer Identification Number (FEIN) is a unique identifier assigned by the Internal Revenue Service (IRS) to a business entity for tax reporting purposes.
It’s also essential for various business-related activities, such as opening a business bank account, applying for licenses and permits, and reporting employee income taxes.
Obtaining a FEIN is a critical step in starting a hot shot trucking business because it is necessary for regulatory compliance and allows the company to operate effectively and efficiently.
USDOT Number and/or Motor Carrier Number
The USDOT Number is an identifier issued by the DOT to identify commercial motor carriers.
This unique seven-digit number is required for all motor carriers engaged in interstate operations, including hot shot trucking.
Both the USDOT Number and Motor Carrier Number are essential for regulatory compliance for monitoring the carrier’s safety performance and identifying the carrier’s ownership and operational details.
BOC-3 (Interstate Carriers)
The BOC-3, also known as the Designation of Process Agent form, is another requirement for interstate motor carriers.
The form must be completed and submitted online to the FMCSA, which designates each state where the motor carrier will operate.
Once approved, the motor carrier will be issued an interstate motor carrier registration number, allowing them to operate legally in all states in the U.S. and Canada.
The BOC-3 is an essential part of regulatory compliance and enables hot shot trucking businesses to operate legally in interstate commerce.
International Fuel Tax Agreement (IFTA) Sticker
The International Fuel Tax Agreement (IFTA) sticker is a required identifier for interstate carriers transporting goods across state lines.
The IFTA sticker displays the carrier’s identification number — indicating that the carrier is a participant in the IFTA program.
The IFTA program is designed to simplify the reporting and payment of fuel taxes. This is for motor carriers operating in multiple jurisdictions.
The IFTA sticker is an essential requirement for regulatory compliance and enables hot shot trucking businesses to track and report fuel taxes accurately and efficiently.
Without the IFTA sticker, motor carriers risk fines and penalties for non-compliance.
5. Get Business Insurance
As you can see, there are many safety and legal measures you must take just to get the ball rolling for your hot shot business.
And insurance is no exception to ensuring a safe and compliant business.
Here are the main types of insurance for a hot shot business.
- Primary auto liability
- Non-trucking liability
- Cargo coverage
- Physical damage coverage
- Uninsured motorist insurance
Primary Auto Liability
This type of insurance provides coverage for damages or injuries to other parties in the event of an accident where the hot shot trucking driver is deemed to be at fault.
The minimum amount of primary auto liability insurance required for hot shot trucking businesses is $750,000, although some states may require higher coverage limits.
This insurance coverage is a crucial component of legal compliance for hot shot trucking businesses and helps to ensure that they are financially protected in the event of an accident.
Non-trucking liability insurance provides coverage for hot shot trucking businesses when the driver is using the truck for non-business purposes, such as personal use or commuting.
This insurance is designed to cover damages or injuries that occur during these non-business activities and is not covered by primary auto liability insurance.
Non-trucking liability insurance is important coverage for trucking companies that use their trucks for both business and personal purposes.
Cargo coverage is an insurance policy that provides coverage for the goods and cargo being transported by the hot shot trucking business.
The minimum recommended amount of cargo coverage for hot shot trucking businesses is $100,000, although some customers may require higher coverage limits.
This insurance is crucial for protecting the financial interests of both the hot shot trucking business and their customers — ensuring that any damage or loss of cargo during transportation is covered.
Physical Damage Coverage
Physical damage coverage is an insurance policy that provides coverage for damages to the hot shot trucking vehicle itself.
This coverage includes protection against collision, fire, theft, and other physical damage that may occur to the truck while in operation.
Physical damage coverage is important because it protects your investments and financial interests in the event of an accident or other damage.
Uninsured Motorist Insurance
Lastly and equally as important to take into account — an accident with someone uninsured. Some car owners aren’t wise enough to have insurance in case of an accident.
That’s where uninsured motorist insurance provides coverage for you in the event of an accident caused by an uninsured or underinsured driver.
This type of insurance covers the cost of damages or injuries that would otherwise be the responsibility of the uninsured driver — saving time and money for any legal action that may need to be taken.
6. Source for Funding
Once you obtain all the necessary licenses, permits, and insurance, it’s time to organize your finances and figure out how you will fund your business.
Common options include personal savings, government grants, angel investors, and crowdfunding.
Personal savings is often the easiest source of funding, while government grants are an attractive option for entrepreneurs who qualify.
Angel investors can provide significant funding and expertise but often require a stake in the business.
Crowdfunding allows entrepreneurs to raise funds from a wide range of investors, often with low initial investment requirements.
As mentioned earlier, having a sound business plan will make it easier to know the type of capital you will need — and how that correlates with your business structure and scope of work.
So be sure to do your research and weigh out your options accordingly.
7. Buy Your Truck and Equipment
This probably goes without saying if you’re starting a trucking business, but purchasing the right truck can be a strong indicator of whether your business will succeed or not.
Along with the truck, you’ll need to invest in several other tools and equipment to ensure that your vehicle is safe and reliable.
- A cargo restraint system
- Cargo securement system
- Tie-down straps
- A toolbox
Buying all the gear for your hot shot trucking venture may be one of the most exciting parts of starting your business. But it’s crucial to purchase the proper gear to ensure maximum efficiency, safety, and practicality.
8. Look for Cargo Loads and Deliveries
For the final step of this guide, let’s go over how you can reel in your clients.
To find cargo loads and deliveries, hot shot trucking entrepreneurs should create a website and utilize digital load boards to advertise their services. This will help showcase your services and connect with potential customers.
Outreach to local businesses and industries that may require your services is another effective strategy.
Once a few customers have been established, you can seek larger loads from brokers and freight forwarding companies.
These channels can help to secure consistent and profitable work for the hot shot trucking business, enabling it to grow and establish a positive reputation in the industry.
Advantages of Hot Shot Trucking
In this section, we will outline some of the benefits of starting a hot shot trucking business, including lower start-up costs, faster pay cycles, and more flexibility in terms of routes and cargo.
Here are those topics explained in further detail.
Low Startup Costs
Compared to other types of trucking, hot shot trucking has lower start-up costs because it requires smaller trucks and trailers. This makes it an attractive option for entrepreneurs who want to enter the transportation industry but may not have the capital to invest in larger equipment.
Typically Requires a Single Driver
Hot shot trucking typically only requires one driver, which can help to reduce overhead costs for the business. This is because there is no need to pay multiple drivers or provide lodging and meals for a team of drivers, allowing the business to operate more efficiently.
You Are Your Own Boss
Hot shot truckers have the ability to work when and where they want, as they are their own boss. This level of flexibility can be particularly appealing to entrepreneurs who value independence and the ability to set their own schedules and routes.
Hot shot trucking is often used for expedited or time-sensitive deliveries, allowing entrepreneurs to capitalize on the speed with which goods can be transported. This can be an advantage in industries that require fast turnaround times or where timely delivery is essential for business success.
Things You Have to Consider
A hot shot trucking business can be a lucrative endeavor, but without proper planning, it can fall apart quickly.
Below you’ll find some of the key things that hot shot trucking entrepreneurs need to consider when starting their business, such as legal compliances, marketing, and investments.
Rules and Regulations
Hot shot trucking entrepreneurs need to be aware of the regulations and laws that govern the trucking industry, including hours of service, weight and size restrictions, and safety requirements. Compliance with these regulations can be a headache for legal operations to run smoothly to ensure your safety and others on the road.
Business owners need to identify their target audience and the type of services they will offer to attract and retain customers. Understanding the needs of the target market and tailoring services to meet those needs can be challenging due to a highly competitive industry.
Time and Resources
Hot shot truckers must also consider the amount of time, energy, and resources it takes to start their business. Given the nature of this industry, many think the return on investment (ROI) for this type of business venture may not be the most practical. Since most of the workload and responsibility fall on your shoulders, it takes a great deal of endurance to sustain a successful profit margin.
Launching Your Hot Shot Trucking Business
Starting a hot shot trucking business can be an exciting and rewarding venture, but it requires careful planning and consideration to ensure success.
By following the steps outlined in this guide, hot shot trucking entrepreneurs can set themselves up for success in the industry.
For managing the financial aspect of the business, consider using doola’s bookkeeping services to help streamline and organize your finances.
With the right tools and resources in place, you can successfully launch and grow your hot shot trucking business with confidence.
How much does it cost to start a hot shot business?
If done right, start-up costs can range anywhere between $75,000-$150,000. The initial investment will greatly determine your scope of work and quality of service.
How profitable is a hot shot trucking business?
The average annual income of a hot shot trucker is around $65,000. However, if scaled correctly, one can increase their profits upwards of $100,000 and more.
How do I get hot shot clients?
To get hot shot clients, hot shot trucking entrepreneurs can create a website or social media presence to advertise their services. They can also reach out to local businesses and industries that may require their services.
What’s the best truck for hot shot?
The best truck for hot shot trucking is a one-ton dually pickup truck with a flatbed that is capable of hauling heavy loads and offers flexibility and maneuverability on the road.
What hot shot loads pay the most?
The highest-paying hot shot cargo may vary depending on market demand, but in general, high-paying loads include those requiring fast or time-sensitive delivery, as well as those with oversize, overweight, or hazardous cargo.