The way in which a prosperous Canadian trucking business can be profitable is demonstrated by the official figures and data of this industry that prove why you should consider starting your own transportation company in Canada. Furthermore, owning a trucking company comes with a slew of advantages: you have more personal time, you can make a lot of money, and there’s a lot of room for expansion.
So, if you’re sold on the concept of owning a trucking company and want to learn how to start a trucking company in Canada, please continue reading. This guide covers all you need to know about starting your own Canadian trucking company, including the processes, costs to consider, and requirements.
Start With A Trucking Business Plan
A business plan is a narrative document that explains the strategy, goals, target market, and financial projections of your organization. It supports you in determining how to operate your company by creating realistic, timely goals, quantifying your success, obtaining outside finance, identifying your operational demands, and so on. Your trucking business plan can also be used to convince lenders, investors, and other stakeholders to back your trucking company.
For that reason, take some time to consider how to start a trucking company in Canada and write down your trucking business plan. Include important information like your positioning, your market analysis, and other figures. You can even collaborate with an industry expert to improve your application and raise the likelihood of investment approval.
Choose An Ownership Structure For Your Trucking Company
Next, decide whether a sole proprietorship, partnership, or corporation is the right legal form for you.
A sole proprietorship is a business with only one owner who is responsible for all tasks and responsibilities, including legal debts owing to third-party creditors, revenue, and profit.
A general partnership is a type of proprietorship in which two or more owners form a partnership agreement outlining their ownership shares, individual powers, capital contributions, profit distribution, and business operating processes.
Finally, a corporation is a legally formed company that can own property and incur debt. They are viewed as legal entities apart from the business owners, allowing the company to continue operating lawfully even if the owners die.
Although the first two company forms are typically less complex than corporations, each has its own set of benefits, drawbacks, and ramifications. Before proceeding, carefully weigh them and make a decision.
Have Your Insurance Settled
Commercial motor carriers must obtain insurance coverage while filing for a safety fitness certificate in some Canadian provinces. For instance, if your trucking company is based in the Ontario area, you might want to hire a reputable Ontario-based truck insurance company. When it comes to truck insurance Ontario-based, insurance companies have packages that vary in coverage, however, they usually include the following:
- Liability Insurance is a legal requirement that covers all injuries caused by your vehicle, with $1 million in liability and property damage coverage. You should have $2-million insurance coverage if you are exporting risky items.
- Cargo insurance is optional, but many freight companies want their partner trucking fleets to have it because it covers the shipment you’re transporting.
- You’ll require $15,000 to $32,000 in cargo insurance, depending on your vehicle’s maximum registered weight.
- They may include exclusions like if you own the shipment or transport specified loads that do not require insurance.
Settle Your IRP
IRP is a reciprocity agreement between states in the United States, the District of Columbia, and provinces in Canada, notably Ontario.
It recognizes other jurisdictions’ commercial motor vehicle registrations and splits licensing payments according to the total distance traveled in each member jurisdiction.
Commercial carriers passing through two or more IRP jurisdictions are most suited for the program. Furthermore, each vehicle in your fleet receives only one license plate and one cab card.
IRP differs from IFTA in that the former is more concerned with vehicle registration in the stated places, while the latter is more concerned with gasoline tax licensing collection, and distribution.
Consider The Costs
It is not cheap to enter the trucking sector. So, to get started, you’ll need trucks, an office space, employees, licenses, and permits. Before you start your trucking firm, you need to develop a business strategy.
Getting a pre-approval for a truck and trailer loan is the best option.
The second alternative is to use full-service lease agreements to lease your trucks. You can walk away from this choice if you lose, but you will wind up paying more.
The third option is to lease equipment and then purchase it later. It supports you in obtaining finance if you have a poor credit history.
So, there you have it. With good planning, many successful businesses and careers in trucking have been created. This article helps you answer the biggest questions first while providing some details of the process and requirements to get started with your Canadian trucking business.