If you enjoy working outdoors, excel at using power tools, excel at hands-on projects, can patiently (and safely) drive long hours; most likely driving a truck is in your Bloodline. Hot Shot Trucking can be the right opportunity for you. According to research by Study.com “A truck driver should naturally have good communication, customer service, and judgment skills. A truck driver must have excellent hearing and vision and be in good physical condition, especially if their job requires driving long hours, loading, and unloading freight. Above all, the key to any business success is working smart, staying self-motivated, and maintaining a positive mental attitude. When reconciling your operation costs and who you need to pay, helps you to forecast how you spend and invest in the future.
Although you might not be able to make $100,000 per year off the bat, given the truck driver demand, with hustle, specialization, CDL training and the right company, you can make $80,000+ on a trucker salary. Just as important tuckers should save 10%-20% for maintenance, the next set of tires or a newer truck…– Mikey The Hotshot Kid
Founding a hotshot business is a hustle. By planning ahead with a 3-year plan you can save lots of money, time, and emotional capital. Avoid those mistakes that cause your trucking biz to overcompensate or exercise poor directional. The hotshot industry is too competitive for you to waste your time or money. Read this step-by-step guide to starting a hotshot business and you will be driving the fast lane to success; with your favorite jumpy juice—coffee…
You must keep in mind; The Hotshot trucking industry relies heavily on male & female contractors and employees and more contractors. With 2-3 yrs experience driving on the road… Anyone in the Hotshot profession will tell you the bottom line is Expediting freight hauling that deals with rush orders. The customer’s cargo must arrive at a specific time, delicate handling required, not delayed, all go by you the Hotshot expediter. Delivering hauls and establishing good working relationships with brokers and shippers on time is your bread and butter.
In a nutshell what hotshot trucking really means is any flatbed trailer towed by a midsize or heavy-duty truck that delivers up to 10,000 – 26,000-pound loads to local, regional or national locations. The tow vehicles are typically midsized-class 3, 4, or 5 trucks with four axles from RAM 3500 the best option. I provided Our top 9 picks for Hot Shot Trucking in 2020
Top 9 Pickups For Hot Shot Trucking in 2020
1.) Ram 3500 Big Horn.
2.) Nissan Titan XD.
3.) GMC Sierra 3500.
4.) GMC Sierra 2500 Denali HD.
5.) Ford F-450 Lariat Super Duty Commercial.
6.) Ford F-350 XLT Super Duty Commercial
7.) Ford F-250 XL Super Duty Commercial.
8.) Chevrolet Silverado 3500HD.
9.)Chevrolet Silverado 2500HD
Before you spend a dime, do your research and establish a 3-year plan with your accountant, financial planner, or experienced trucker who has been in the business at least 5-10 years. If you don’t have the above services at your disposal try a free mentoring service called SCORE.org a small business resilience hub…that helps owner-operators navigate through all stages of their businesses; especially with challenges ahead, you will benefit from this free service. A Score Mentor can help you understand & control potential financial pressure especially at the onset of the business as you try to get funding to buy your 1st truck, Choosing better insurance packaging and financial projections. A score mentor can also ensure you have extra funds for operational costs and savings for potential emergencies ahead. If you plan 3 years in advance with a professional to operate your business outcomes right, the end result will be rewarding the trucking industry.
The Demand
The US trucking & freight transportation industry is the lifeblood of the economy. Imagine what would happen if all trucks stop transports for one month. There will be vertical scarcity in every essential business, hoarding, and price gouging. Most Importantly The Good news is truckers are keeping America’s economy running again. The expected growth rate of the trucking industry is 2.3% per year from 2019 to 2024, according to the ATA Chief Economist Bob Costello. Visit http://www.trucking.org for more detail.
- Trucking volumes are expected to rebound in 2021, rising 4.9% next year and then growing 3.2% per year on average through 2026.
- Overall freight revenues in 2020 will total $879 Billion, rising to $1.435 trillion in 2031.
“In fact, everyday goods consumed in the U.S. are put on a truck. As a result, the trucking industry hauled 72.5% of all freight transported in the United States in 2019, equating to 11.84 billion tons.
However, most successful hotshot owners understand that their service is a small percentage of a massive & profitable industry. Again do your research first; check the load ratio and density for your area of operation as well as the rates. Before launching your business and investing money you may or may not have. Get in the habit of calling brokers and shippers a critical 1st step in finding the best local trucking areas. The routes are typically within a 150-200 mile radius and consist of an 8-10 hour workday. Pick a location where the demand is at least 18 loads per truck to give you the best-negotiating power in terms of rates. Remember your network is your net worth.
Top 8 Freight Brokerage Companies
That Offer LTL, Dry van truckload, Refrigerated, Flatbed/heavy haul, Bulk/tank
- CH Robinson.
- XPO Logistics.
- Echo Global Logistics.
- Worldwide Express.
- Coyote Logistics.
- Landstar System.
- Schneider Logistics.
- GlobalTranz Enterprises.
Is Hotshot Trucking lucrative? Heck Yeah!
Hotshot trucking is clearly one of the most profitable in the United States. All you need is a plan, a man or woman, and a pickup truck!
Like any business changes occur. Also, trucking rates per mile (rpm) change with freight demand and season. The national average, rpm could be between $1 and $2.5. If you log 2,000 for a particular week, you could earn up to $1,600 – $3,000. In peak season you’re gonna love seeing the cash flow! Fight the desire to spend on non-essentials and invest in quality sleep gear, an emergency generator, tires, and an extra fuel tank. Calculate what you can bank or save and what you have to invest back into your hotshot operations. The most necessary costs to stay on top of, outside of legal ones, are fuel, food, hotel, maintenance, and insurance; which will require a dedicated expense account. A well-organized trucker takes all tax deductions available.
9 Steps to Starting Your Hotshot Trucking Business
“Get approve 1st. Wait until you have your DOT and MC numbers before leasing or buying your truck.”
- Open an LLC in Your State
- Get a Tax ID Number
- Open a Business Bank Account
- Get a DOT Physical (and Your Medical Card)
- Get a CDL (Commercial Driver’s License)
- Get Your MVR (Motor Vehicle Record)
- Get TWIC-Transportation Workers Identification Credential
Hotshot Drivers, when you’re doing taxes, Include These Deductions:
Access Fees:
- Internet (Cell phone data plans)
- Satellite (Qualcomm, Sirius/XM)
Administrative Fees:
- ATM Fees
- Check Reorder Fees
Association Dues
- OOIDA, Teamsters, etc
ComData & ComCheck Fees:
- Laptop
- Computer Software
- Credit Card Fees
Cleaning Supplies:
- Window Cleaner
- Paper Towels
- RainX etc…
Interest:
- Business Loan
- Credit Card
Office Supplies:
- Pens, Pencils, Paperclips, Envelopes, Folders, Rubber Bands
Medical Exams
- DOT Physical
- Drug Tests
- Sleep Apnea Study
Postage Fees:
For Mailing Invoices, Bills of Lading, etc…
Real Estate Expenses:
- Mortgage interest
- Mortgage prepayment penalties
- Penalties for early withdrawals
- Points on principal residence financing
- Real estate taxes
Safety Gear
- Steel-toe boots
- Work Gloves
- Cargo straps
Trucking & Business Related Subscriptions
- Load board subscriber fees
- Trucking industry magazines
Uniforms
- Dry Cleaning Costs for your uniforms or protective clothing
Remember to always ask a tax professional on how to avoid an audit? Don’t make the mistake as many truck drivers have done starting out, trying to claim too much and ending up with an audit. I wouldn’t risk double-dipping, always check your state tax laws.
Finally enjoy the profits but 1st check your profit margins by percentage with another set of financial eyes. Remember your spending always tells a story, make sure it’s a success story. You should be able to answer your advisor’s questions and articulate your progress. Stick to your business plan as advised, it will help you measure your successes, adapt to changes while optimizing your hotshot operations day today. Next, take into account your operating costs and repayments, good credit means more opportunity to scale your ownership. Again the important is the cost of fuel, insurance, food, and accommodations during trips.
Ideal Hot Shot Trucking Rates
- Insurance Fuel Cost: At a rate of $1.50 per mile, driving 2,500 miles per week, you’re looking at a gross revenue of $3,750. “$160,000 per year”
- Insurance Cost: An average $1000 per month, but I’ve known some rookie Hotshots pay $1900 a month – because they did not get several quotes. Just ask Truckers, Brokers, what is the best insurance plan? Make sure that your insurance covers over $750,000 to $ 1Million. It is best to have a minimum of $1,000,000 in liability insurance & truck and trailer protection if you plan to travel outside your state. The average annual insurance is $13-19K per year. The down payment is usually 25%, then you have monthly payments. Plan on $3000-4000 down.
- Truck Insurance Requirements: Cargo coverage protects the freight hauled by truckers. While the minimum required coverage is $5,000, most brokers will request a minimum of $100,000 in cargo insurance. Most load brokers will require you to carry a minimum of $1,000,000 in liability insurance.
The Basic Of Preparing Yourself Financially
Starting a hotshot business involves a considerable amount of initial investment as well as operating costs. Estimated figures:
- Pickup truck: $15,000 – $45,000
- Flatbed trailer: $7,000 – $20,000, depending on the overall features
- Other equipment (chains, binders, tie-downs, bungees, straps, etc): Est. $1,000
- Registration (FMCSA, BOC-3, Unified Carrier Registration, Home State DOT, ELD, Others): Est. $1,000
- Insurance: $3,500 – $4,000 down payment with monthly payment of about $1,000
- LLC (Optional): $400
Secure the requirements
Fleet
If you have a 3/4-ton pickup truck and a flatbed trailer, you are set to get started. Of course, you need to invest in straps, tie-downs, chains, and bungees which are essential to secure your loads. As you grow your business, you may find it necessary to purchase different types of hotshot trailers for more versatility on what you can load.
Pickup Truck
- At least 1 ton
- Dual or Dually
- At least 9,000 lbs rear axle
- Diesel engine
- Either gooseneck or 5th wheel hitch for smooth travel with heavier loads
Hotshot Trailer It Depends on what you will load and haul
- Open with 3- and 4-car wedge-style vehicles
- Enclosed trailer for motorcycles and general cargo
- Flatbed for general cargo and other equipment
- Goosenecks or 5th wheel
When you purchase a truck and a trailer, consider your targeted niche as it will dictate the kind of loads you will haul. Below are common niches you can choose from:
- Medical industry
- Commercial industry
- Agricultural industry
- Manufacturing industry
- Spare parts
- Perishable cargo
- Lightweight cargo hauls 10,000 pounds
- Heavy-duty cargo hauls 26,000 pounds with CDL
Licenses
Starting out you don’t need a CDL if your loads are under 10,00 lbs. However, it’s best to secure a CDL so you can also haul heavier loads. All hotshot drivers are required to file an MC number or operating authority granted by the Federal Motor Carrier Safety Administration (FMCSA).
Other required legal documents include:
- Business License
- Vehicle Permits
- Vehicle for Service Permit
- Proof of Insurance
It generally would take about four weeks to secure an active authority. Make sure you process your paperwork right. After registration with the FMCSA, you can expect about 3 days to be put on the register. There’s a 10-day protest period after that. If you filed your BOC3 and insurance sooner, it takes about 6 business days to be active.
4. Be ready to get your first load.
Establishing contacts with potential load providers will help keep your business move forward. You can also build your client base by signing up with hotshot load boards. Check online for load boards that fit the equipment you have, loads you want to haul, and locations you want to travel to.
If you plan to get most of your loads from load boards, it’s important to keep in mind that load board rates are lower due to using a broker service for getting their loads delivered. Some may pay you within days while others may have a waiting time of 30-60 days. It all depends on what is best for you. Most owner-operators boast of cash on arrival.
Additionally, it wouldn’t hurt if you ask for referrals from companies you already work with. You could also send emails to your targeted companies, advertise by creating an owner-operator or Customized trucking services website, and improve your visibility through social media channels. Hotshot truckers are now trending to implement YouTube and social media platforms to promote their brand, network, on the road tips, and to earn extra income.
5. Keep your business running.
Don’t expect to profit immediately after you start your operations. It may take a month or longer to recover your initial investments, but as long as you stay focus on what you are doing, your business will keep on growing.
The steps listed above should give you a general overview of how to start a hotshot business. You may encounter many ups and downs but as long as you are serious about it and have done your own research before getting started, there’s a big chance that you’ll succeed in this industry.
