Dump truck businesses provide construction firms with the transportation help they need to take large amounts of material from place to place. Starting one of these companies can help you tap into this unique market and make good money. The overhead isn’t low, but profits can be high.
Starting a dump truck business requires several careful steps and a measured approach. You must carefully invest your money and market your company to find customers. Just as significantly, you should expand properly and slowly to minimize your risk of over-extension.
1. Know Your Market Before Starting
Dump truck businesses typically rent services to construction or landscaping firms that can’t afford to buy trucks themselves. They usually transport things like sand, gravel, dirt, and other raw materials. However, dump trucks can also remove trees, shrubs, and other landscape items.
Typically, a dump truck driver makes between $32,000 to $39,000, according to Salary.com. They need a specialized CDL to handle dump trucks properly. As a result, your dump truck business needs to cover these expenses, as well as the cost of buying a fleet of dump trucks.
Research the market in your area to gauge whether you meet a need or not. Some regions may have multiple dump truck providers, and you may not be necessary. However, if you can offer unique and specialized help, you might stand out. For instance, hauling dangerous waste may help you make more money and provide a service that other companies in your area may not.
2. Fine-Tune Your Service Options
While construction, building, and landscaping companies most often use dump trucks, they aren’t alone. Businesses like government and corporate organizations may hire your services. This may include handling excessive commercial building waste and other unnecessary upgrades.
Next, decide on your operational scope before opening your business. Are you going to be the sole proprietor and drive a single dump truck? This option gives you the most profitability but also limits your scope and makes it harder to handle big jobs. You might need multiple trucks for that business model.
Note that buying more tricks increases your expenses by making you liable for multiple truck payments. You may owe a minimum of $50,000 to $100,000 on each truck and need to make regular payments on each to stay solvent. Play carefully and start small to improve your chances.
Dump truck companies may meet many unique niches, as well, so make sure you choose one that interests you. These niches include:
- Moving construction materials, machines, equipment, and raw building items
- Transporting heavy equipment between different gigs for construction teams
- Hauling excavators, bulldozers, and other landscaping equipment
- Shipping oil, gas, and other hazardous materials between facilities
- Getting agricultural equipment from manufacturers to farms
Research your competitors to make sure that you meet a need that they do not or do poorly. For example, you may be the only company focusing on heavy equipment, which gives you a monopoly in your area. Try to focus on these niches to improve your chances of success.
No matter the line of business you decide to pitch your tent, you are still going to compete with others, and even the government who are in the same area of business and a dump truck business is not an exemption.
3. Create a Business and Finance Plan
Before investing in any dump trucks or office space, you need to create a business and finance plan. These plans help you understand your investment, track your expenses, and expand properly. There are many steps necessary in this process, including:
Legal Business Preparation: You must talk with your state authorities to get as many CDLs as you have drivers. You must also register your business, sign up for taxes, get an employer identification number (EIN), register your company, and handle all certifications. Taking these steps right away ensures that you’re on proper legal ground before you start your business.
Finance Sources: No business starts without finding financing professionals that can help them pay for various expenses. For instance, you will need extensive vehicle loans to pay for your trucks, business loans to pay for materials, grants to help pay for minor expenses and even venture capital to begin. Nail your finances before you start to ensure you don’t run out of money.
Business Plan: A good business plan covers your potential growth, your general operation, and much more. Writing one provides you with the help you need to get your business going without investing improperly. Dump truck companies need a business plan that covers finding customers, how to handle truck payments, costs for hauling services, and much more.
Training: Whether you plan on working alone or hiring multiple drivers, you need proper training. You need a dump truck CDL that lets you handle and haul a truck of this size. Drivers also need proper safety and handling training when working with hazardous materials. These steps ensure that you can transport goods safely and minimize any dangers to your drivers.
Pricing: Dump truck companies typically charge at least $85 to $130 per hour for their services. That means you may charge up to $1,040 per day for your trucks, with at least $160 to $200 going to each truck driver. You can adjust your pricing to meet the needs of your customers, including charging more for hazardous or emergency hauling services.
Insurance: Vehicle insurance is critical for your dump truck business, as is liability coverage. Liability protects you if your dump trucks cause an injury or damage. General vehicle insurance pays to repair or replace your trucks if they get damaged. All businesses need some insurance, and specialized dump truck policies can provide you with the coverage you need.
After handling these legal and financial steps, your dump truck business is ready to open. However, you must still market it properly and decide on a few other factors. For example, do you want to open up a new franchise or work with an established dump truck firm and expand its operation? These questions are essential to answer before you start your company.
4. Decide on Your Business Type
Starting a new dump truck franchise may be a major challenge because so many competitors exist on the market. However, it may help if you want to provide a brand-new service or stand out from competitors. It also helps you control your business more fully and increases your profits.
For instance, a sole proprietorship of a new franchise may have an 80-90% profit margin because you’re taking most of the money yourself. Working with an existing franchise requires paying licensing costs, which may cut you down to just a 70% profit margin in many cases.
You must also decide if you want to bring in a partner or handle your business yourself. A partner can help by driving a second truck or handling some of the loads. They also take on financial responsibility and lighten your load, but do split your profits as well.
While you may eventually grow into an LLC or a corporation, many dump truck companies start out as a one-person operation. As your success grows and you get more customers, expand carefully to take on more business. Doing so can ensure that you maximize your potential sales.
5. Expand Your Company
If your company starts doing well, you must pick an expansion strategy to improve your operation. Slow and steady is the best choice here because over-extension can cause real financial problems. For instance, adding one new truck is a smart option when upgrading from a sole proprietorship.
As you grow, you can add new services and increase your drivers’ training. Then, you can consider consolidating ownership by starting an LLC or corporation. These options work well once you have made millions of dollars and need help managing an extensive and broad dump truck business.