Who doesn’t want to be their boss? Hot shot trucking is one such business where people can become their bosses as owner-operators. This business is a quite profitable venture, but one must ensure that he/she has set up a solid foundation at the beginning that gives them the best opportunities for success.
Hot shot trucking allows a person to enter the trucking profession with fewer license requirements and by using less expensive equipment than full-size semi-trucks. Hot shot trucking businesses are frequently time-sensitive and are generally delivered to a single location. Hot shot drivers frequently locate freight on load boards instead of being on standby. As an independent owner-operator, this is an excellent method to supplement one’s income.
Let’s learn more about hot shot trucking and how to start the business, and what are its requirements.
What Is Hot Shot Trucking?
Hot shot trucking is a business where the owner simply hauls for a single customer that is needed in an expedited fashion. Hot shot truckers are employed when shippers and brokers have relatively modest cargoes that need to be delivered promptly.
These drivers and operators are experts in transporting time-sensitive, project-critical loads such as agricultural equipment, construction equipment and supplies, heavy gear, and other items. Instead of heavy-duty, Class 8 semis, hot shot drivers often run super-duty pickups with trailers.
If done correctly, hot shot trucking can be a profitable company. One can be an owner-operator, which means they own and manage a hot shot business under their MC number, or lease with another firm.
Steps to Start a Hotshot Trucking Business
Step 1- Arranging the start-up cost
Starting a hot shot business requires cash and one needs to ensure that they have enough money to cover it. The owner needs to have enough operating costs to get through the start-up period until the business makes a profit. It is critical to determine how much and what one must pay themselves. There are several ways for funding the hot shot trucking beginning costs. One can seek loans from friends and relatives, or one could contact investors.
Step 2- Select the type of specialty
When starting a hot shot trucking business, one may not have all the necessary equipment to handle various kinds of goals. Thankful hot-shot business owners can specialize in the types of freight they haul based on the equipment they have. There are several sorts of trucks and trailers to handle various types of cargo. The majority of hotshot trucks are medium-sized, although larger than pickup trucks.
Step 3- Learn more about the insurance requirements
As insurance regulations become increasingly stringent, the Federal Motor Carrier Safety Administration (FMCSA) is attempting to discourage prospective drivers away from receiving their CDL and then purchasing a semi-truck that can end up as a failure. It is critical to ensure that one may not be caught off guard by unexpectedly large premiums or setbacks when purchasing the correct insurance plan.
Step 4- Ensure to have DOT physicals performed and get the medical card
It’s important to ensure that one is a qualified truck driver before one files for an LLC. This is a mandatory requirement for anybody wishing to operate a commercial motor vehicle (CMV), including hotshot drivers. Make an appointment with a qualified medical examiner for a DOT physical. A DOT physical checks the physical, mental, and emotional well-being of a person.
Step 5- Get the Federal Employer Identification Number
Next is the step to get an Employer Identification Number or EIN. An EIN is a nine-digit number issued by the Internal Revenue Service to companies in the United States. This number is used to file the business tax returns and a business bank account, and receive payments from the customers who use your services.
Step 6- Get an LLC.
One needs to create a limited liability corporation (LLC) or another corporate structure to shield themselves from liability lawsuits. An LLC is the most basic form to organize a company and is ideal for most hotshot firms with pass-through income. This allows owners to avoid paying double taxes in some jurisdictions if they utilize a C-corp or similar structure. Most states allow owners to file LLC documents with the Secretary of State.
Step 7- Set up the business bank account for the business
After getting the EIN and setting up an LL, the next step to start the hot shot trucking business should be to open a business bank account. This account will be essential when paying taxes and checking the income and expenses of the company. One can get good checking plans and net banking facilities from most local banks.
Step 8- Apply for the USDOT number
The USDOT number or Motor Carrier number is required depending on the type of business. Hotshot businesses that operate commercial vehicles in interstate commerce, or hauling freight, must be registered with the FMCSA and have a USDOT Number.
Step 9- Lease or purchase the correct truck
Having the right vehicle for the hotshot business is necessary. The owner can lease or buy a truck depending on their budget. Purchasing and leasing have their benefits. Choose the right option after thoroughly going through the plans.
Step 10- Purchase all the necessary equipment
The next thing after getting the truck is to get a trailer. The owner will also need to get tie-downs, special hitch, and other stand elements. Depending on the area where the trucks will be driven, one needs to get safety triangles, lights, flags, etc.
Step 11- Get telematics solutions
To optimize your operations and have a real-time assessment of the trucks, one can get telematics solutions like GPS tracking devices. These devices can protect the truck while it’s delivering the products. These devices also help save time and fuel.
Step 12- Set rate-per-mile (RPM)
One might have presumably detailed what they need to make their hot shot business profitable when they wrote their business plan. Now is the time to calculate their rate-per-mile (RPM). To ensure that they are in the ballpark it is important to check out what the rivals are charging.
Step 13- Finding the customer
After ensuring that everything is in place, one needs to get their vehicle moving. Hotshot load boards are the easiest method to locate reputable and certified loads in the area. The more quickly one discovers loads, the more money one can make.
Conclusion
Finally, there is no secret for hot shot trucking; you just need to put in the effort and gain expertise. That being said, if someone has a solid plan and uses the correct tools, they can make great business decisions and ensure that their business is fully handled and set up to flourish.
FAQs
Is the hotshot business good?
Hotshot hauling may be profitable. Even if one already has regular work, it might be a great side hustle provided they have the right equipment. It is not, however, appropriate for everyone.
What is the best truck for the hotshot business?
Listed below are some of the best trucks for this business:
- Ram 2500 Big Horn
- Ford F450
- The GMC Sierra 2500 Denali Heavy Duty