Starting a hotshot trucking business is a great way to become your own boss and have more control over your schedule. With the increasing demand for hotshot trucking services, a non-CDL hotshot business can be profitable if you have the right resources and determination. Here, we’ll go over the necessary steps to start a hotshot trucking business as a non-CDL driver, as well as frequently asked questions to help you along the way.
How To Start Hotshot Trucking Non CDL: A Comprehensive Guide
Step 1: Determine Your Business Structure
When starting a hotshot trucking business, the first step is to decide how you want to structure your business. Will you operate as a sole proprietor, partnership, LLC, or corporation? Generally, operating as a sole proprietorship or LLC is the most popular choice for owner-operators as they are simple to set up and have relatively low costs.
Sole Proprietorship
A sole proprietorship is the easiest and simplest structure for a hotshot business, where you’ll be the sole owner of your business. This structure won’t separate your personal finances and assets from those of your business. As a result, it will be your sole responsibility to bear all the liabilities and debts incurred by your hotshot trucking operation.
LLC
Forming a Limited Liability Company (LLC) is a great way to combine the benefits of sole proprietors and corporations. With an LLC, you have personal asset protection, ultimate control over your business, and flexibility in taxation benefits.
Partnership
You can form a partnership with another person to share the ownership of your hotshot trucking business. It’s vital to have a clear partnership agreement in writing stating each partner’s responsibilities, rights, assets, liabilities, and contributions.
Step 2: Obtain Your Hotshot Trucking License and Permits
A trucking business, whether a hotshot trucking business or a regular trucking company, requires several licenses and permits.
Driver’s License
Non-CDL drivers only need a regular driver’s license to operate a hotshot trucking business as long as the vehicle is less than 26,001 pounds.
DOT Number
If your hotshot logistics business transports cargo interstate or internationally, you must obtain a United States Department of Transportation (DOT) number. It helps to track your safety record and require annual safety inspections. To get a DOT number, you must fill out an application online and pay a fee.
MC Number
The Motor Carrier (MC) number is a unique identifier for carriers that transport passengers or cargo in interstate commerce. You’ll need an MC number if you want to transport cargo across state lines.
IRP
The International Registration Plan (IRP) is a registration reciprocity agreement among US states, the District of Columbia, and Canadian provinces. You must get your IRP before registering your vehicle in your state.
IFTA
The International Fuel Tax Agreement (IFTA) is an agreement between 48 states in the US and some Canadian provinces that allows you to travel across national and state boundaries while operating your hotshot vehicle.
Step 3: Get Hotshot Trucking Insurance
Like any trucking business, your hotshot business needs insurance coverage to protect both your business assets and your customers’ goods. Here are some of the necessary hotshot insurance coverages you should consider:
Auto Liability Insurance
Auto liability insurance is a minimum requirement for all commercial vehicles. It covers costs related to damages or injuries caused to third parties in an accident where you’re at fault.
Cargo Insurance
Cargo insurance will cover damage or loss of goods your hotshot business is transporting.
Physical Damage Insurance
Physical damages insurance covers damages to your hotshot trucking vehicle, including repairs or replacement after theft, accidents, weather disasters, and other perils.
General Liability Insurance
General liability insurance protects your hotshot business from lawsuits claiming bodily injury, property damage, or advertising injury.
Step 4: Purchase or Lease Your Hotshot Trucking Equipment
To start a hotshot trucking business, you’ll require a truck that can haul commercial freight. Such trucks range from flatbeds, single or tandem axle trucks, cargo vans, and box trucks. You can purchase or lease a truck, depending on your finances, but it’s essential to do your research before making the purchase. You can check sites like Craigslist, eBay, Facebook Marketplace, or Autotrader for reliable and affordable hotshot equipment.
Step 5: Get Your Hotshot Business Clients
Once you have all of the above, the next step is to acquire hotshot trucking clients. It’s important to establish a broad customer base by marketing your trucking business online, in newspapers, truck shows, and industry forums. Building a reputable and sound foundation upfront helps to grow your customer base.
FAQs
What is a Hotshot Trucking Business?
Hotshot trucking business involves transporting goods or cargo that are time-sensitive, smaller loads, or those that won’t fill a semi-truck. The term “hotshot” originated from the term “hotshot” teams for express train operations.
Is a CDL Required for Hotshot Trucking?
No, a commercial driver’s license is not always mandatory to run a hotshot trucking business as long as the vehicle and load weights less than 26,001 pounds.
How Much Can I Make in Hotshot Trucking?
The amount of money you would earn in hotshot trucking depends on various factors such as demand, location, competition, rates, experience, customer base, and equipment. On average, hotshot truckers can make between $40,000 and $70,000 per year.
What Type of Equipment is Best for Hotshot Trucking?
The best hotshot equipment is the one that meets your business’s needs and can handle your demands. You can use a flatbed, cargo van, box truck, or single or tandem axle truck depending on the size of the load.
Conclusion:
Starting a hotshot trucking business is an excellent opportunity for non-CDL drivers seeking to be their own boss. The demand for hotshot trucking services has been on the rise over the years, making it a lucrative business venture. If you follow the above steps, you’ll be on your way to building a prosperous and reputable hotshot business. Remember, it’s always essential to adhere to safety regulations and obtain the necessary licenses, permits, and insurance to protect your business and cargo.