Companies use dump trucks to transport, sand, gravel, concrete, debris, and demolition waste to and from construction, excavation, drilling, mining sites.
Only dump trucks have permission by the law of the US to haul this kind of heavy material.
So, if you're wondering how to start a dump truck business, I've got you covered.
Below is a list of steps that you can take to start a dump truck business.
1. Gain experience
First, become a dump truck driver.
Second, work for a company. That helps you gain experience and learn from the mistakes done by the company.
After 1 to 2 year of working as a dump truck driver for somebody, you may consider starting your dump truck business.
It's better to have coverage for many scenarios of building out a dump trucking company rather than not having enough of it.
Here are the basic insurance policy programs that you should consider purchasing if you want to start your own dump truck business in the United States of America:
- Auto liability insurance ensures that your drivers and your vehicles are protected in case of an accident.
- Physical damage insurance covers any repairs needed for your dump truck in the event of a collision or accident.
- General liability coverage takes care of any physical injuries or property damage that may happen through daily operations to your employees.
Talk to an insurance agent and let him advise you on the best insurance choices that suit your business needs.
3. Choose a legal entity type for the company
Depending on your plans with the dump truck company, you need to choose the structure type of it.
Here are the types of company structure you have to begin with:
- Sole proprietor - this works for small companies, with moderate start-up capital, or with a single dump truck.
- Limited Liability Corporation - this works for businesses that intend to grow their fleet and to operate all across the United States of America. Also, an LLC protects you from personal liability. That means that if anything goes wrong in the business, only the money that were invested into the LLC company will be at risk. LLC's are simpler and more flexible to operate.
If you study the various legal entities, you'll find out that an LLC is the most commonly used company structure for beginners.
You can start an LLC and in the future convert it to a "C" Corporation or "S" Corporation if your company starts growing bigger.
4. Choose a catchy name for your dump truck business
One of the initial steps in starting a dump truck business is setting up the "company name".
You shouldn't choose the company's name randomly because it leaves a good or a bad first impression.
Spend some time searching for a catchy and easy-to-remember name for your company.
Find a name that explains your business and is memorable.
5. Apply for a tax ID or for an EIN number
As you have decided on the name for your dump truck business, it's time to register it legally so that no one else can use it.
To register your business legally, sign up for an EIN number (Employer Identification Number).
6. Study the dump truck market
Before starting your business, determine the demand for dump truck services in your area.
Check if there is a wide range of government, corporate, and individual clients in your area who cannot successfully dispose of the dirt by themselves and need help from dump truck companies to do the work.
Ideally, you should find business opportunities with construction sites, farmers, corporate organizations, manufacturers and retailers of machines and equipment, demolition, and wreckage companies.
A key opportunity in the dump truck services industry is government funding for infrastructure developments such as highways and streets.
Now, let’s understand these sectors in detail and know how they can be your potential clients;
- Chemical and Construction Manufacturing Companies are those that need your services or truck to get raw materials including iron, gravel, coal, silicon, metals, and other heavy objects delivered in large amounts.
- Mining Industries can utilize your services for mining and quarrying operations. You need to have heavy-duty trucks that can easily carry, plow, and lift heavy loads.
- Earthwork Companies deal with construction projects and they may be your potential customers as they need to transport sand, gravel, soil, asphalt, and other materials to the construction sites.
- Maintenance Authorities are responsible for maintaining the city and keeping it safe. They may be your target customers and utilize your services for removing snow (during winter) and damaged building materials.
7. Know your business costs upfront
- Hiring drivers
To build your dump truck business, you need drivers and drivers need to be paid.
A median dump truck driver's pay in 2018 was just under $44,000 per year or about $21 per hour.
Keep this in mind when determining the number of employees you'll need to hire to operate your business profitably.
If you intend on driving yourself, you’ll need a CDL that you can get by learning at a local trucking school.
In fact, at first, working as an owner-operator for another company, may be a worthwhile decision because, that way, you can make your beginner mistakes without hurting your wallet.
As your business grows, you need at least one more person to help you run it.
- Truck cost
The biggest start-up cost of your business will be acquiring a dump truck.
A brand new dump truck can range from $100,000 up to over $200,000 U.S. – depending on the make, model, and year it’s built, and features.
A used truck, on the other hand, is easier on the pocketbook.
A 2014 Freightliner Business Class M2 106 with 125,000 miles can run you around $55,000 U.S.
However, the main issue with used trucks is that they require more maintenance than a new truck to meet regulations and safety guidelines.
Remember that you’ll still likely need financing to buy your trucks since dump trucks aren’t cheap.
Financing rates depend on several factors such as your credit score. So one of the best things you can do is start cleaning up and improving your rating.
8. Open business checking account
To make money with a dump truck business you need to separate your personal finances from business finances.
For that, you need to open a business checking account and even a business credit card.
You need to do all your financial transactions including purchases and expenses from a separate business account.
9. Market your business
To find business opportunities, you need to market your company.
That means advertising in local news publications or business magazines, building an online presence, offering better deals for new clients, and offering bonuses for referrals.
When starting, focus on smaller clients and start-ups to build experience. After that, you can use that experience to market yourself to bigger clients and larger contracts.
That will also give you an idea of what you should charge for larger jobs and contracts.
Here are some of the platforms you can utilize to market your dump truck company:
- List your business and products on yellow page ads (local directories).
- Leverage on the internet to promote your dump truck company.
- Engage in direct marketing and sales.
- Encourage the use of Word of mouth marketing (referrals).
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Place adverts on both print (newspapers and magazines).
- Sponsor relevant community-based events/programs.
- Distribute your fliers and handbills in target areas.
- Contact corporate organizations and residence in your target areas by calling them up and informing them of your dump truck company and the services you offer
10. Determine a competitive price for your service
One issue for any new business is determining the right price for your services.
One easy way to determine that is to get quotes from competitors to find their prices for different services.
Call them and ask what do they charge for jobs like hauling to or from new construction sites or for cleaning up a demolished building, for example.
Once you know the prices for dump truck services, design your price sheet.
From there, undercut competitors by 5% for the first contracts to be competitive until you gain more experience and confidence. After that, you can charge more.
You also need to factor in costs like fuel, maintenance, and overhead to make a profit.
11. Purchase the truck
Choose from many types of dump truck models one with enough power and a large enough bed to take on a variety of jobs.
Used trucks will have mechanical issues sooner than a new trucks. However, new trucks cost significantly more money.
Decide what you can afford.
Buy a dump truck that has a clear title, working hydraulic equipment, and is mechanically sound.
Used dump trucks sold for anywhere from about $30,000 to well over $100,000, depending on their age, engine, and bed size.
A decent down payment and excellent credit will help obtain a loan for the vehicle.