How To Start A Dump Truck Business
In this post, you’ll find articles from various authors plus resources to guide you through starting a dump truck business. This collection is something you can use now and while you’re running your business.
Before you get to the resource section of this post, we can go over significant issues you’ll want to consider regarding starting and owning a dump truck business.
You need to consider several issues to plan effectively and make the right decisions, including how to start or whether to start at all.
Let’s go over a few of them.
What Type of Operation Are You considering?
Are you considering an owner-operator type of setup, or are you thinking along the lines of a fleet of trucks where you manage the business? Either way, starting this type of business requires a substantial investment.
With a fleet of trucks, a building, and a good-sized workforce, you’ll be looking over a million dollars. If you’re planning on becoming an owner-operator, you may be around the 100,000 dollar range.
These are just estimates. Naturally, it depends on the trucks you purchase and whether you lease or buy a building or run from home.
Is There a Demand For Dump Truck Services In your area?
One of the essential parts of starting any business is identifying if there is a demand in the area you’re planning to operate. If there is no demand, then it wouldn’t make sense to work in that area. You’ll need to look elsewhere. If there are too many people doing the same thing you’re planning on, then you have to compete with all of them to make any progress.
Your ideal situation is to find an area where there is demand and still room for newcomers.
Will You Run Your Dump Truck Business From Home?
Are you planning to run this business from your home or preparing to buy or lease a commercial location? There are pros and cons to both approaches.
When you operate from home, you’ll reduce a lot of expenses and deduct a portion of your monthly bills and mortgage payments as a business expense.
When you operate from a commercial location, you can expand without disrupting your family life. And keep your personal and business life separate.
Repairs and Maintenance
Have you considered how you will deal with the repairs and maintenance of your trucks? Will you do it yourself, hire a mechanic, or make a deal with a garage specializing in truck repair?
There are pros and cons to all three above methods. What you need to consider if you are planning on doing the work yourself is, do you have the tools and expertise necessary? You could do the maintenance work, and for repairs, send the truck to a repair shop.
I would say to decide how you will handle repairs; you need to estimate how busy you could be, how many trucks you’ll have on the road, and if you’ll have the room, tools, and equipment for repairs.
For example, if you have five trucks and multiple jobs going, I would say you need a mechanic on the job. If a truck goes down, you can’t wait for the repair shop to schedule your repair. If you have one rig and you’re doing all the driving, it’s not worth hiring a mechanic.
You need to plan for the best approach to deal with maintenance and repairs. It’s a vital part of being successful in this kind of business.
A Collection of Resources Related to Starting Dump Truck Business
Considerations Before You Start a Dump Truck Business
In this section, you’ll go over issues about starting a business, like what it takes, and what you can expect from having a life as a business owner.
Take some time to go through the articles provided for a broader understanding of what it’s like running a business.
How to Start a Dump Truck Business
As the title reads, this section offers information about starting your trucking business.
Each article provides its take on what you need to start this kind of business. It’s to your advantage to take in as much information as possible so you’ll make the right decisions.
Trends and Statistics
In this section, you can view trends and statistics related to this industry.
You’ll want to pay attention to the trends and developments to prepare for changes. Another issue to watch out for is if the industry is on the rise or a decline.
One of the good things about dump truck services is that artificial intelligence won’t be involved with this type of job, at least not soon. The last thing you want is to build a business and have it no longer necessary as AI becomes popular.
Profitability and Revenue
When it comes to profitability, you can get an idea from the articles included in this section. There are too many variables that come into play when it comes to the profitability of a business.
For example, you may purchase a dump truck for $150,000 with high payments, and instead of driving, you hire a driver, and you target customers where there is no demand.
With the above scenario, how much money do you think you could make? You won’t; you’ll probably go broke!
My point is you can research how much profit you can make, but many issues will determine your profit.
For average rates, it can vary by where you’re operating your business and the demand for the service. For a rough estimate, figure around $125 per hour on the high side and $70 on the low side. Some operators have, for example, a 6-hour minimum.
You may think that’s a lot of earning potential. Yes, it is, but you still have expenses, such as; fuel, maintenance, and possibly wages and brokerage fees.
Startup and Operating Costs
When it comes to startup cost, it will depend on how you set up your business.
Will you buy a building to store your equipment and perform maintenance, or will you operate from home? Will you purchase a new truck or a used one?
Will you have one vehicle and run as an owner-operator, or will you be buying a fleet of trucks?
As you can see from the above questions, you won’t be able to determine your startup costs unless you plan your set up first.
In this section, the focus will be on the type of dump truck to purchase. If you’re running your business from home, then your truck is your most expensive purchase.
You need to make the right decision because if you are buying a dump truck with problems, repairs are costly, and you’ll lose out on work. If you purchase a truck with all the bells and whistles, you might not make enough money to make the payments.
There are different types of trucks on the market, including:
- Standard Dump Truck
- Semi Trailer End Dump Truck
- Transfer Dump Truck
- Truck and Pup
- Superdump Truck
- Semi Trailer Bottom Dump Truck
- Double and Triple Trailer Bottom Dump Truck
- Side Dump Truck
Each truck is specialized for a particular job. If you want to decide on which kind of vehicle to purchase, you need to know what type of material you’ll be hauling and the company’s requirements.
For a new dump truck on average, you’re looking at a range between $100,000 – $150,000
For a used truck, the average is between $30,000 – $100,000
Naturally, condition and mileage all come into play when looking at used trucks.
What you want to avoid is a model that has a history of problems, expensive repairs, and a reputation for poor reliability. You may wish to speak with a few mechanics for recommendations on the type of model you should be considering.
See the articles below for insights and tips for purchasing your dump truck.
Licenses and Permits
You’ll want to make sure your dump truck is fully compliant with laws and safety regulations, which include:
- Commercial Driver’s License
- Federal DOT and Motor Carrier Authority Numbers
- Unified Carrier Registration (UCR)
- International Fuel Tax Agreement (IFTA) Decal
- Standard Carrier Alpha Code (SCAC)
Will you need all the above? You will need the Commercial Driver’s License to drive the truck, and depending on where you’re planning to operate, you’ll need to look into the others.
You need to understand the laws in your state and apply for the permits you’ll need. For example, if you live in Michigan, you can type; “permits for a dump truck Michigan” in your browser to find information.
Or you can use a service like Motor Carrier Authority which will help you make sure you have all the permits and safety requirements to operate a dump truck.
In addition to the required permits, you’ll need to set up your company, which may be an LLC, a corporation, sole proprietorship, etc.
See the resources below for more.
Insurance is a must for any business. You’ll need the right amount of coverage to protect your equipment, property, your crew, and the property of others.
When starting, you’ll pay a lot more insurance, because you don’t have a track record. After a few years with a clean record, you’ll be able to get better rates.
As you may expect, insurance is costly because when operating heavy machinery, there are higher risks, which lead to higher rates.
The area, material you’re transporting, and your driving record are taken into consideration to estimate your insurance rate.
You can expect your dump truck annual insurance rate to be anywhere from $5,000 to $20,000 per truck.
See the resources below for an idea of the coverage you’ll need and the costs.
How to Finance Your Business
Getting a loan for any business will take work. It’s much easier to get a loan for a home than it is for business.
The reason is that new companies are high-risk investments because, according to statistics, approximately 20% of new businesses fail in the first two years of starting.
Lenders are looking for low-risk investments, and that’s where they make their profit.
See the resources below for your options to finance your company.
Brokers and Load Opportunities
In this section, you can explore options for getting loads and working with brokers.
Since you don’t have a customer base yet, which will take time, using a broker can generate revenue during the early stages of operation.
As your business grows, you may continue to use a broker as well as servicing your current client base. You have to determine if it’s worth it or not because brokers can charge you, on average, anywhere, around 15-30% of the load fee.
See the resources below for an idea of working with brokers.
Business Name Ideas
In this section, you’ll find tips and insights for naming your trucking company.
You want a name that is memorable and easy to pronounce. Your name will be what you’ll use for years to come, and company names don’t change much, so take some time to choose a name you’ll like for years to come.
When choosing a name, look for a domain name to match so your business name matches your website.
See the resources below for choosing a business name that works well for your business.