In simple words, applying for the motor car number and planning to start a new venture are strong decisions to make. So if you have decided to take these steps, it is essential for you to be mindful of a number of factors.
Keep in mind, hundreds of businesses fail every year when they enter the market without a proper plan In place. Because a business is started with a lot of investment, it is essential for the investor to be careful when putting all goods in one basket.
So whether it is about applying for the California DOT number or sifting through the conventional process of starting a major business, we have listed down all the things you must consider before debuting in the commercial market.
1. The Startup Expenses
One of the beginning hurdles of starting a new business is to gather money. Not to forget, it takes a lot of strength as a project manager to ask for volunteers, but it shouldn’t bring your confidence down. The long term benefits of starting this business are worth the investment and effort you put in it. Because the climate of the business world has changed drastically in the last few years, you can rest assured about putting your investment here.
The biggest expense will be the truck and trailer. Although most business owners start using rented vehicles, it is in your best interest to settle for new equipment. Considering the fact that the rent might be very high, purchasing new equipment will be a big but certainly a one-time investment.
2. Trucking Insurance
Unless you don’t have trucking insurance, you won’t be allowed to navigate operations. Keep in mind; the insurance cost will easily fall between $6000 to $10,000 per annum. However, you can easily make a down payment between $1500 to $2500.
Secondly, as a business owner, you must know that the insurance company will not cover firms with drivers having less than two years’ experience. Secondly, If your business wants to have more than one truck in a year, it will be hard for you to get an insurance plan. This is why it is imperative for new businesses to be mindful enough when hiring drivers for certain jobs.
3. Choosing the Business Structure
Now that you have decided to invest your money, you need to understand that this business venture will continue for a long time. Depending on your requirements and needs, you can settle for any particular business structure, such as:
Limited Liability Company
Experts claim this is a conventional business structure that is best for new and small businesses. Because it is easy to maintain, you can rest assured about the personal assets not being hounded in case of a financial crunch. Long story cut short, in this kind of business structure, the personal assets are not confiscated if the business engages in any form of financial issues.
Sole Proprietor
In this business structure, you are the only one operating the business as a single owner. This is not a good option because the personal assets are at a strong risk of being taken by the financial institutions. Especially if a lawsuit is filed against you, your personal assets will be taken quickly. This is why business owners are suggested not to settle for this kind of an option.
Corporation
When you choose to become a corporation, this, too, can protect your business from engaging in any problem in the long run. Many believe this is the best option when it comes to setting up a new company. Furthermore, if you decide to expand in the future, choosing a corporation is going to be a protective cover for the money.
4. Applying for The Motor Carrier Authority
This sounds inconsequential, but it is the most important step here. Not to forget, when you want to apply for this number, you will come across two types of companies. The first type helps you in getting the MC and DOT number, so it is the cheapest.
However, the second option is a full service, and they’ll do everything to improve the vibe of your business. as a new firm, you will need a marketing push to penetrate, and this form of company will help you do it the right way.