Given the current situation with the “supply chain” and the labor market in general in 2022, large trucking companies will take just about anyone on as a driver. A lot of people would tell you that it’s way smarter to just get a job as a driver for another trucking company. The biggest advantage is you have more control over when and where you drive. If you want to be successful, you will have to work hard either way but having agency over your life can make the difference.
Driving a full sized Class 8 truck as an owner operator is inadvisable if you don’t have experience driving for a Class 8 for a company. The argument could be made that if you’re going to have the supervision and micromanagement involved in driving for a large company, you might as well just get a job that isn’t driving a truck.
Before you get started, you should think about who your customers are going to be. Most hotshot drivers utilize load boards, especially when starting out. You will need to pay for access but it’s a good idea to understand the market before you make any decisions about equipment. After you become established and proven to freight brokers you will not need to rely on the load boards as much.
The first thing you need is a truck, hopefully you already have one because the deal you get on this will be one of the biggest factors in your cashflow situation. If you don’t want to go the route of getting a class A CDL with all that involves (because you will have enough to deal with getting started) you will be limited to 26000 pounds GCVW.
One factor that makes starting a hotshot business appealing is that there is relatively easy access to credit for the things you need to get started for the average person with decent credit. Honestly, most people buying heavy duty trucks now don’t really have any use for them. Getting a loan on a class 8 tractor will be another story.
If you already have a truck, it’s probably best to try to use what you have, if possible, because you’re likely going to take a bath in the current automotive market. Constant towing with anything less than a 3/4 ton truck is not advisable for towing. With the inflated market for diesel trucks (most of which will never be used for towing) and the price of diesel fuel in general, it’s worth considering a gas truck.
Leasing a truck by the mile makes a lot of sense when you are starting out if you can find a company willing to work with you. There is a lot of demand for trucks of all types right now so you will likely be forced to make some compromises if you want to get the best deal you can under the circumstances. There is the obvious advantage of not being stuck with a truck if the business doesn’t workout, but a lot of people like to drive trucks in any case.
You will need a trailer which are also difficult to find right now. They’re always coming on the market as people leave the business, but flexibility is always beneficial when running a business. There are a lot of theories about which trailer is best, but the two most popular types are a 32 to 40 foot flatbed gooseneck, which will give you a lot of latitude in what you can haul.
Car haulers are very popular, and have the advantage of huge demand for auto transport right now. Transporting cars has the advantage of not needing to wait for a forklift or crane to be loaded and unloaded (although you still might be waiting for something else).
An advantage of getting a new trailer versus the many used trailers in decent condition available at significant discount is that they can be easier to finance. The trailer manufacturers would go out of business if they didn’t offer financing, but it can be difficult to arrange with a private buyer.
Once you have a truck and trailer, you will probably need to register with the Department of Transportation. They will require you to get insurance amongst other things. Insurance is one of the biggest cost factors in the hotshot business. You need at least $750k liability insurance, and you should be vary wary of making claims or getting traffic violations because keeping insurance costs minimized will be key to profitability.
There are some situations where you don’t need a DOT number, like if you are not driving to different states although many states require DOT registration no matter what. You can see from all these requirements why many don’t want bother with getting a Commercial Driver’s License because there is quite a lot to deal with without that.
After getting a truck, trailer, and insurance you now have an enormous monthly outlay and will need to constantly haul whatever loads you can find if you want to stay ahead of your expenses. LoadApe keeps track of your loads and expenses so you can know if you’re making or losing money. It sounds simple, but human nature causes us to overestimate revenue and underestimate expenses. By staying organized, you will have huge advantage at every stage of your business.
Even if you don’t want to use LoadApe, you should figure out an alternative system with spreadsheets or something else, but LoadApe is free. Create an account and take a look.