Since more people shop online, more businesses use cargo van delivery services to provide their customers with a better shopping experience.
Offering cargo van services as a business turns out to have many benefits in terms of paying taxes, tax deductions, liability, and more.
Below, you'll find the process of how to start a cargo van business.
Step 1. Do your research
Doing everything required to start a cargo van business only to realize that this is not your thing is stupid.
If things go unexpectedly for you that means that, before starting a cargo van business, you didn't do your research to figure out if this is something that you want to do.
With so much information available, there is no excuse for not doing your research before starting a cargo van business.
You can start by looking at different ways to make money with a cargo van or see what types of contracts are available.
But you need to understand that this type of business is not for everybody.
Some people get stressed when driving. Or, for many driving is something that they don't want to deal with.
After that, you need to think about whether you want to drive locally or you want to drive OTR.
For OTR, you need to spend quite a while on the road.
To understand that you can get a driving position try first what is it like before investing a bunch of money in getting your vehicle.
So, before you decide to start a cargo van business, make sure that this is something that you want to do.
Don't just jump in. Make sure that this is a smart decision for you.
2. Create a business plan
Once you gained a little bit of experience, you can create a plan.
A proper business plan turns thoughts into actionable steps towards achieving your financial goals.
A business plan may include such things as:
- Ways to control your business budgets.
- Keep an eye on your competitors and the industry trends.
- Ways to market your business to achieve your business goals.
- Operational plans on vehicle maintenance.
- Required skills of your drivers or other in-house teams.
3. Get a cargo van
A cargo van vehicle is the fuel of your business.
Deciding on what type of cargo van you need depends on how many packages you want to fit into it, what weight of freight the van should handle, and what dimensions of parcels the cargo van should be able to carry.
The next important factor when acquiring a van for your business is the budget.
And here you have a few options:
- Are you going to pay cash for your van?
- Are you going to finance your cargo van?
- Are you going to lease your van?
So, you have a few options and you need to decide which one works for you.
But keep in mind that the most important thing in this business is keeping your overhead down.
So, renting, from all of the above options are going to be expensive. Renting jumps up the overhead right away.
Again, do your research.
What types of work are you planning to do? How much payload do you need? Are you going to do OTR work hauling 3 pallets? If you are going to be doing work locally that is not going to be necessary. Depending on your contract.
Sometimes the type of vehicle that you need will be dictated by the type of work that will be doing.
4. Register your cargo van business
Now, at this step you need to demonstrate how serious are you about starting your own cargo van business and do you want it to be perceived by others.
- Start by registering a name and a logo for your cargo van business.
Your name and a logo should be unique to your business.
- Once you have registered your business name, you can use this name to register a proper domain name for your company website. After that you can list your business on Google.
- Next, you need to choose a business structure of your company such as an LLC, corporation, or partnership.
At this step, you are already into forming your business.
LLC is typically the easiest and most cost effective business structure. Most of you are going to be doing single member LLC's or a partnership thing when you are two people.
Operating as a business entity is going to help you in so many ways. Forming a business entity provides your business with liability protection, tax savings and advantages, and deductions.
- Open a checking account for your delivery business. It allows you to keep your personal finances and business finances separate. That gives your business credibility and it organizes things better for accounting and taxes.
5. Apply for a license and cargo insurance
Although you don’t need a CDL for your van, you may need to get permits, licenses, and cargo insurance based on your business type (flower delivery, courier, or other businesses).
For instance, if you are offering moving services, you may need a license depending on the state and local laws. A lawyer can help you understand and get the required permits and insurance so that you can start delivering amazing customer experiences.
Also, at this step, you need to set up the insurance.
Depending on the type of opportunity that you are getting may determine the type of insurance that you need.
A lot of times $100k - $300k insurance might work. On the other end, a common practice is a million-dollar auto liability and $100k on the cargo.
So the opportunities sort of dictate the insurance that is needed.
Or, you can simply just get the insurance that is needed for most opportunities and you don't need to find yourself scrambling at the moment to get your insurance switched around.
Make sure insurance is set up.
Because let's say you'll need to go OTR, you need to have that million dollar insurance anyways because to have your MC authority on the road, you need to have that one million insurance and $100k cargo. No broker is going to work with you if you don't.
So, setting up the insurance is going to be imperative.
6. Set up your EIN number
So, once you've set up your business license, getting an EIN number is very important. That's like social security for your business.
You can set up an EIN online. You can set it up with IRS.
7. Extra things for OTR work
For most of you if you want to do OTR work, cross state lines carrying loads, you need a few extra things.
- When it comes to the DOT number, if you work locally, it is not necessary as long as your vehicle is less than 10,000 lbs. But in order to work with brokers, you are required to have a DOT number.
- And if you cross the state lines, you need an MC number.
So, these are the few extra steps that you need to take.
Thankfully to get the DOT number you can sign up on FMSCA website. That one is free.
To get an MC number, that one does cost $300. So, there is a little bit of expense there. Keep that in mind.
Also, like I said previously, to get your MC, you need to have that million dollar auto liability and $100k on the cargo.
Getting that staff set up is definitely key, if your are planning to work with brokers or find loads of the load boards.
8. Acquire necessary equipment
To provide good box truck delivery service to your customers, you need some equipment such as:
- 4 to 8 wrapping straps.
- Some bungy cords.
- Moving blankets.
- A razor blade or knife.
- Having a smaller tool kit is helpful.
- Safety vest
9. Apps for cargo vans
Whether you are running OTR or you are running locally, it's a good thing to use apps.
You got GoShare, Dolly, Dispatch, and a bunch of others.
Download some apps. Sign up for them. Start receiving delivery job offers.
Just a disclaimer.
If you don't have a clean record, many of these apps won't work with you.
Related: The best apps for truck drivers
10. Market Your delivery services
Once, your cargo van business is set up, you need to market to a wider range of potential customers to let them know about your existence.
As more people use their phones whenever they need to find information about a product or a service, it's important to set your presence online. For that you need to set up:
- A website that shows up your box truck services, address, and contact phones.
- Social media profiles that provide relevant content to your specific audience and try to convince them to land on your website.
- Optimize the website for search.
- Set up a Google My Business account.
Also use offline marketing opportunities such as:
- Participate in local or community business gatherings.
- Build strong human and helpful relationships with potential clients.
- Offer your business cards to local businesses.
Cargo van business opportunities
When you have your cargo van business set up, you need to find opportunities to make money with your cargo van.
First, you can brainstorm some cargo van business ideas and select the best ones to target.