What Do I Need to Start a Transportation Business? 7 Steps to Use

What do I need to start a transportation business? Well, the answer to this tricky question will depend on several factors.

But, worry no more! This page will show you how to plan business transportation and start it from the ground. Just check this out!


What Do I Need to Start a Transportation Business?

1.) Determine Transport Niche to Choose

The very first thing you should consider before setting up a transportation business is deciding who or what you will serve. This is important since many types of transportation business with different categories available for you to choose from. Bear in mind that the possibilities are almost limitless.

In this way, picking up one specific area, find information as much as possible, and learn about are critical things to do.

Do some research first to find information about what becomes the demand of your local area. This will allow you to find potential clients when your business is ready to setup.


2.) Build Your Transportation Business Model

Once you have gathered all information about your transportation business, you need to determine the business model you are going to use. Here, you will start the structure of your company. Not only that but you also need to fill in the operational information related to your business at this stage.

There will be some options that people commonly use when specializing in their business model. They are sole proprietorship, general partnership, limited liability partnership, limited liability company, S-corporation, and C-corporation.

The choice of these business models will affect the tax scheme used for your company. These business models play an important role in what will happen to your company when it’s got sued.


3.) Register for a Federal Tax ID Number

By securing a license from your local authorities is a great way to set up your transportation company as an actual and professional business. In this way, make sure that you register for a federal tax ID number when establishing your company.

This ID number – sometimes called EIN (Employer Identification Number) – will make it easier for you to file both annually and quarterly taxes. Having this tax ID number will also give your business protection when dealing with identity theft.

Additionally, EIN also helps you to get a business loan easier and having a business credit quite early for your company.


4.) Get Licences and Permits

Keep in mind that establishing a transportation company means that you are dealing with people’s lives. You will work closely with passengers and other types of precious cargo, making it quite risky.

In this way, your business should meet specific requirements given by the Department of Transportation to get permits and licenses. Most of the time, the list of requirements you need to fulfill will depend on the size and weight of what you are hauling.

Some popular types of permits and licenses required in the transportation industry are fuel carrier licenses, commercial vehicle registration, commercial drivers’ license (CDL), cargo limits, and insurance coverage for passengers, drivers, and goods.


5.) Plan Your Business Budget

The costs needed to set up a transportation business will depend on the type of transportation business you pick up. For instance, establishing a full-fledged logistics fleet will be much more expensive if compared to a one-vehicle taxi service.

If you need a backup source of finance, the Small Business Administration can be an ideal place to go. As an alternative, you can go to credit unions or local banks to get a business loan.

Bear in mind that it is critical to have a solid business plan before applying for financial aids. Things that you need to consider when planning your transportation business budget are:

  • How much you will invest in equipment, supplies, and manpower
  • The amount of money you will use for marketing and advertisement
  • The revenue required to keep operational expenses clear
  • The specific amount of business debts and other expenses that you have to pay


6.) Providing Business Equipment

Picking up the rightest business equipment will allow you to create a professional look in your company. Make sure that you consider well the quality and size of your vehicles used in your business.

This will be very beneficial and profitable especially if you intend to transport your clients’ goods and materials. It is an influential decision that will affect the future of your business.

Thus, doing some research will be very useful to help you select business equipment based on quality, safety, and costs. Building your fleet and making vehicle purchasing decisions will need you to consider the following things:

  • Whether you will need to transport passengers or not
  • The wight of materials you are going to transport
  • Types of terrain or ground required an average trip coverage
  • The tear and wear you need on a regular basis
  • What fuel-efficient or sustainable options to pick up


7.)  Build Solid Business Practices

The solid hiring practice is another thing you need to put into consideration when planning a transportation company. Incorporating standard hiring procedures into your transportation business plan will make it easier for you to formalize the process.

This is also to make sure that your company’s operation follows the guidelines and requirements set by the state government related to employment. In a transportation business, it is a common practice that owners of the company also act as an operational runner, even a driver.

However, as your company grows, you might need some other people to fill certain positions. These people will help you to run your business professionally, improving your company’s credibility.

You can’t do all things by yourself. Some positions that might require you to hire employees include:

  • A team of maintenance technicians
  • HR (Human Resources) staff
  • Administrative and office staff
  • Seasonal or part-time employers
  • Sales and marketing staff



Modern transportation businesses come with a wide range of types. From large scale freight operations to moving household furniture, or from transporting goods to passengers, the options are nearly endless.

This will also make it possible for you to specialize in one key area or type of business, depending on your personal interests.