How to start a hot shot business

Take stock of your resources, determine a specialized form of trucking, and obtain a Transportation Workers Identification Credential (TWIC) in order to start a hot shot business. Here are details on each of these steps and others you can take to start a hot shot business:

• Take stock of your resources. To start a trucking business, you must first determine what equipment you already possess and what equipment you might need to purchase or rent.

  This also applies to your finances; do you have enough capital to start the business, or do you need to get a small business loan? You can also ask for loans from friends and family or seek out investors for your business.

  If you don't have the capital in place, make sure you draw up a detailed business plan that you can present to any of the parties just mentioned. The more prepared and tedious you are with your business plan, the more likely you are going to be able to secure the funding that is needed.

  You need enough operating cash on hand to start a profitable hot shot business. It is crucial to figure out what you will pay yourself and the minimum profit you need to make to succeed.

  You also need to have systems and tools in place to track and record expenses, payments, shipments, and other important data and information.

• Determine a specialized form of trucking for your business. You should choose your specialty in relation to the resources you have on hand or can gain before starting your business.

  There are different kinds of trucks and trailers to handle different types of loads. Most hotshot trucks are medium-sized but typically larger than pickup trucks.

  Trucks come in different classes: Class three medium-duty trucks have a weight limit of 10,001-14,000 pounds. Mainly contractors and last-mile delivery drivers use this class, but you can also use them for lighter trucking loads.

  Class 4 medium-duty trucks have a weight limit of 14,001-16,000 pounds. These are heavier trucks, but they're still classified as non-commercial.

  Class 5 medium-duty trucks have a weight limit of 16,001-19,500 pounds. Many of the lightest commercial trucks are categorized as Class 5.

  There are also some jobs that require the use of trailers. Bumper pull trailers are generally shorter and less expensive. They're easy to use, which is why they're popular with civilian drivers. But they can't haul as much, typically less than 10,000 pounds.

  Gooseneck trailers have a tighter turn radius than bumper pull trailers. They can also usually carry larger, heavier loads. This can be an advantage when delivering to construction sites or other remote areas with little space to turn around. Tilt deck trailers tilt at an angle, so it's easier to load heavy cargo.

  Lowboy trailers have a low center of gravity, and it's ideal for the heaviest loads. Dovetail trailers work well if you're hauling cars or other equipment with wheels.

  The great thing about starting a hot shot business is that you can choose to only haul low-weight cargo if you want. You can also choose to specialize in refrigeration hauling; these are utilized in the food, medical, and other perishables industries.

  The more specialized you can do your business, the more likely you will be to attract more clients and to have clients refer you to others seeking similar services. You should specialize in something that makes sense to your budget, but don't worry, you can always pivot after you have gained enough profit.

  Another step in this area is coming up with a proper name for your company. You'll need a unique name you can register and open a business account with.

  Try picking a name that lines up with the type of specialized trucking services you are going to provide. It should be short and sweet, so it's easy to remember from a marketing standpoint. In addition, you should also set up an LLC during this step to protect yourself from liability claims.

• Get a CDL license and EIN. Getting a CDL license is something you will need, and any drivers that you hire will need it. It is almost always a requirement to start a hot shot business.

  CDL licenses fall into three different categories:

  • Class A

  • Class B

  • Class C

Trailer gross weight rating restrictions separate Class A, and Class B. Class A license allows you to drive tractor-trailers, while a Class B license clears you to drive straight trucks, box trucks, and large passenger buses.

A Class C license allows you to drive smaller vehicles, like passenger vans and certain delivery trucks. Most local truck driving positions require a CDL license.

The next step is to get federal and state tax IDs. Your employer identification number (EIN) is critical to starting and growing your business. It helps with matters like opening a business bank account and paying taxes. Essentially it is like a social security number for your business. In certain states, you may also have to get a tax ID as well.

You now should apply for the proper licenses and permits for your hot shot business. This guarantees that the business stays legally compliant. The licenses and permits you may need for your business varies, depending on what industry your business is in, what state, the specific location of your business, and other factors as well.

These health examinations performed by the Department of Transportation are meant to evaluate truck drivers' physical, mental, and emotional abilities to make sure they are fit to be hauling loads.

The Federal Motor Carrier Safety Administration (FMCSA) requires truckers to complete and pass these tests in order to maintain commercial truck driving licenses. This applies heavily to your hot shots business if you are planning on using vehicles for interstate commerce in certain weight categories or want the legal ability to haul hazardous materials.