Construction companies, mining, maintenance authorities, manufacturers and other similar organizations use dump trucks to move heavy volume materials. These materials are usually loose, like sand and gravel, and wastes. Some of these businesses invest in their trucks whereas others lease or the truck or hire a dump truck company. It’s a good business opportunity.
The US is home to 28,418 dump truck companies and, although growth for this service isn’t massive, IBISWorld projects a 2.1 percent rise in 2022. That means more companies will be formed. How do you start a dump truck business?
How to Start a Dump Truck Business
All businesses follow similar processes to get established. Business models must be determined. Permits and licenses must be applied. Finances must be secured and in order. But some special steps must be taken for a dump truck operation, besides the acquisition of heavy-duty commercial vehicles.
Learn about the startup cost of a dump truck business
How much would it take to start a dump truck company? To figure out how much you’re likely to spend to get your hauling operations up and running, consider the following factors:
- Kind of services you’ll offer
- Type of cargo you’ll haul
- Type of trucks (or truck) you’ll acquire
- Size of your fleet
- Number of employees
- Insurance coverage
The scale and type of operation for your business determine the initial cost of your dump truck business as well. On average, dump truck startup costs are about $10,000 to $20,000.
Research is a big part of any successful startup because it provides information on the competition, the market and the customers. You must learn about the opportunities available in your area.
- Are there plenty of construction projects?
- Are there quarries in the area?
- Is there a waste disposal requirement that hasn’t been filled?
- What other hauling services are needed in your area?
The opportunities you discover will lead you to your target market. It may even tell you whether you could get government contracts.
Develop a business plan
All businesses must have a plan for sales and marketing, operations and finances. This guide to your dump truck operations will keep you on track to your business goals.
Aside from the financial plan, operations plan and sales and marketing, a business must also cover the following:
- Products and services
- Competitive analysis
- Market analysis
- Overview of your vision and mission, corporate goals
- Management team, with corporate hierarchy
Secure financing for your dump truck operations
Business funding can be challenging, especially if a bank loan is your only choice. But it’s not. Other sources of financing allow you to get capital and not have to wait a long while. You may have some money in the bank to get some capital going, but unless you only plan to a one-dump truck hauling business, your savings may not be enough.
Consider the following funding options:
Instead of a lengthy bank loan application and a likely steep interest rate, explore your options for grants for trucking businesses. The money awarded won’t have to be paid back. These grants come from government entities, like state agencies through the Federal Motor Carrier Safety Administration and private organizations, like FedEx.
Some wealthy people and serial entrepreneurs want to invest in profitable businesses. So they seek out investment opportunities. The downside to venture capitalists is that they expect to acquire control of your business. But if you’re willing to give up a 25 percent or 30 percent stake in your dump truck company, VCs could be a good source of business financing.
The Small Business Administration acts as a guarantor for small businesses that require funding. SBA loans may be easier to secure than bank loans because the agency’s goal is to provide an easier capital for entrepreneurs.
Get business insurance
Risks are part of doing business, and although you may not be able to predict or avoid them, you could prepare for them. The right insurance policy mitigates the impact of unexpected events.
A truck driver could be injured on the job. Your office or equipment may be damaged. Certain situations may make you liable as the owner of a dump truck company. Insurance policies provide protection for finances and the continuity of your dump truck operation.
But which insurance should you get?
Business owner’s policy
An all-in-one policy that protects you against professional liability, property damage, equipment damage or employee injuries.
Commercial auto insurance
Provides financial protection when your dump trucks are damaged.
Business property insurance
Provides coverage for your dump truck operation’s supplies and equipment.
General liability insurance
Offers coverage for property damage and bodily injury.
Get financial protection in the event of damage to your office or business premises.
Digitize your dump truck operations
Cut down on expenses by investing technologies that automate processes and eliminate paper work. Business apps developed for dump truck hauling businesses help with efficiency. You can manage your business in the palm of your hand. Schedule jobs and truckers with expediency. And create invoices without a hitch.
Hire the right truck drivers
Identify your dump truck driver requirements. Your services depend a great deal on the capabilities of your truckers, from their work ethic and expertise to their experience. Unless you plan to be an owner-operator, hiring the right truckers must not be overlooked because it’s one of the tactics to knowing how to run a successful dump truck business.
Start a Dump Truck Company the Right Way
It’s important to have a clear plan, defined objectives and adequate resources to run a dump truck business. Even though you plan on a one-dump truck operation and limiting your services to just hauling, for example, construction wastes, carefully organized steps ensures your trucking business in the basic industry has a good start.