Owner Operator Blueprint
Formation Phase
LLC, Corp or LLP
Business Entity Formation
Give the business a body! The smartest thing you can do is file for a corporation with multiple members. I won't delve deeply into how much of an advantage this can be yet if you're interested, host your own research or consult a tax professional or lawyer on the advantages of such a entity. LLC's are fine and there is nothing wrong with them but in terms of financing and lending (if your business decides to go that route) you would want to be in the declaration of Corp instead of LLC.
EIN
Employer Identification Number
It’s always best to get this before filing for your MC/DOT #! Your EIN is free. The link to get that done is https://sa.www4.irs.gov/modiein/individual/index.jsp . You want to make sure that all of your address information is done correctly. To make any changes to this will require you to mail the IRS for anything done wrong. Also it is very smart to do this application ON A COMPUTER so that you can screenshot, save, email to self and download your application and result. You can receive your EIN document immediately Monday - Friday!
MC-DOT
Application Motor Carrier/ Department of Transportation Application
This has to be done before you can get insurance quotes! One of the smartest things you can do here is to make sure your ideal equipment type is something that you show on your application.
The FMCSA MC Motor Carrier (Interstate) application will cost you $300 and the DOT (Intrastate) application is $0 when done correctly.
Insurance companies can only provide quotes when your company exist with at leaasssst a DOT #.
For Motor Carrier (MC#s) applications to be processed you must pay for it so you can receive quotes.
You cannot get Motor Carrier (Interstate) Quotes with just a DOT #.
You cannot “cook, marinate or season” a DOT # (Intrastate) with the intent for that time to count towards your Motor Carrier MC (Interstate) Authority.
Finalize the MC Phase. The following 4 things must be filed for a trucking authority to become active
Motor Carrier Application
UCR
BOC-3
Insurance
The route for a Intrastate Authority must only have it’s
DOT Application
Insurance
UCR
UCR Unified Carrier Registration
An annual fee required by the government to remain compliant and share fleet size. This must be completed and paid for before your authority can become active. This fee is also cheap as ever and can be instantly with an immediate return of receipt once it’s paid. The UCR System will allow you to go in and grab the receipt after payment. Paying for this on your phone is fine. The link for this is https://ucr.gov/ .
BOC-3
Blanket of Coverage
A one time fee for assigning 48 different officers to collect legal documents on behalf of your trucking company is also mandatory for your trucking authority to become active. This is one of the filings necessary to get your Motor Carrier MC (Interstate) active.
Insurance
There is one requirement of insurance for a Motor Carrier Authority but tons of factors can affect pricing and protection. PLEASE NOTE that MC/DOT, Insurance, BOC-3 and UCR all have to be active before an authority can begin its vetting period with the FMCSA!
Financial
Business Bank Account
Tons of people try to start with a personal account. Any legitimate shipper, broker or consignee will require an account that matches the business! Get it done! Use relationships if you have them at your banking institution.
Factoring
New businesses cling to cashflow. Shippers and brokerages have pay terms of Net 15 - Net 60! A factoring company can pay you in just hours! Before you dive into just any factoring deal make sure you check out our post about factoring companies. It goes into detail about the real quirks of factoring companies. https://hotspotlgx.com/post/factoring-payments
Accounting
At your least you need to have a Quickbooks software so you can track how healthy your business is! Hire an accountant when the time is right but stay organized at all times! You need to know what your profit and loss of what your company is looking like. You can’t track progress if you don’t have the systems in place that do so for you. Fuel, factoring, dispatch, maintenance, and miscellaneous costs all need to be tracked so you can know what your profitability points are. Being able to look forward into the market can help you dictate how fruitful or tight things will be for your business. Knowing that you’ll need a certain range of capital for the slower months of the year will pad you instead of making terrible financial mistakes along the way.
Truck Compliance
ELD
Electronic Logging Device
It is crazy important to start with an ELD the moment you hit the road. ELD violation fines begin at $1,000 per violation. Let’s keep that money and find a good ELD that benefits the fleet. 1 truck or 50, it matters! Make sure that your ELD provider has features that make sense to you and your customers. Features like tracking links, logins to view certain assets like equipment and trucks are all things that your future customers will appreciate.
IRP
International Registration Plan
Taxes are due to each state that trucks drive through. This is the collection method and accounts must be set up. IRP and IFTA are connected so to hit the road you’ll need these plates to hit the road. If you are moving forward as an intrastate carrier you will only need to sign up for IRP. IFTA is needed for crossing state lines. If you decide to carry on as intrastate carrier yet at one point you want to move across state line to move freight you’ll need to contact each state DOT and apply for an IFTA License.
IFTA
International Fuel Tax Agreement
Taxes are due to each state that trucks drive through. This is the collection method and accounts must be set up.Some Separate states are places like Kentucky and New Mexico. Make sure you pay your IFTA Tax to them separately especially if you are not located in those states. If you do not operate in those states STILL LOG IN TO DICTATE NO TRAVEL IN THOSE STATES. Not making Kentucky or New Mexico aware of zero road usage will result in fines.
2290 (HVUT)
Heavy Vehicle Use Tax, is a federal tax in the United States that applies to heavy vehicles that operate on public highways. Every DMV will require this fee to be paid to issue you a tag along with having active insurance no matter if you are Intrastate (DOT) or Interstate (Motor Carrier MC). This along with insurance will be necessary to take into your state DMV to get tags for your vehicle while also going to get the needed proof of residency and company paperwork. To find out what documents are needed simply Google “IFTA MyState” or “IRP MyState”
Signage
The simple or stylish decals that are needed to go on the side of your truck need to be displayed in a certain order to be compliant!
The format for that is listed below
XYZ Trucking - Company Name
Washington, DC - Company Home Terminal
123456 - DOT #
987654 - MC #
135791 - KYU #
246810 - Last 6 of VIN
KYU
Kentucky Weight Distance
As mentioned above this permit is a requirement for certain commercial vehicles traveling through the state of Kentucky. Any carrier intrastate or interstate moving through the state at 59,999 GVWR needs the permit. No exceptions to brake system or any other thing you can think of. If you forget to file your KYU, re-establishing the permit comes at a cost of $500. This is a mention from experience not fiction. Getting caught in the state without the permit active is a
Oregon IFTA State Permit
special permit that allows trucks and other commercial vehicles to travel across state lines, including into and out of Oregon.
New York State Permit
Highway Use Tax (HUT)
This permit makes sure that trucks and other large vehicles pay their fair share for the wear and tear they cause on New York's highways.
New Mexico State Permit
Weight Distance Tax Permit
any commercial vehicle with a gross weight of over 26,000 pounds with plans to drive on public roads in New Mexico, will need this permit. It doesn’t matter if your vehicle is based in New Mexico or just passing through—you still need the permit.
7 Driver Compliance Last Steps
Drug & Alcohol Consortium
Most people are their own first driver but you still to monitor yourself to federal regulation and get enrolled in a Clearinghouse before hitting the road.
Driver Files
A collection of company info on the drivers like application and process, license, MVR, PSP and other things that are required federally.
Federal Regulations
Book Each Truck must be equipped with a Safety Regulations Handbook before hitting the road. Another Federal mandate.
7 Driver Compliance Last Steps
ELD Malfunction Guide This needs to be in the truck 100%. A road side inspection is a matter of when not if. This little booklet missing costs $1000s of dollars in FMCSA violations. Print it out and keep it clean! I just saved you thousands.
DOT Binder in the Truck
This binder is going to save your life when in inspection mode. Truck Registrations, Insurance Policies and more have to be present for you to make it smoothly in and out of inspections.
DOT Inspections
Annual Inspections must be kept on hand for both truck and trailer equipment. Don’t get to eager and run your first load into someone else’s pockets