How To Start A Hot Shot Business- Hot shot business also known as hot shot trucking business is a very profitable business to venture into. It simply involves hauling goods from one place to another, usually for one customer per time. This method of haulage is quite fast and effective , customers don’t have to wait for days or weeks to get their goods delivered. In a short time, goods get delivered . If you are looking for a business to do , you may want to consider this kind of business. In this article, we have outlined necessary details you will need to start a hot shot business.
How To Start A Hot Shot Business: 12 Useful Tips
Step 1: Get a unique name
This is highly crucial and it is the very first step in branding your hot shot business. Be sure to use a unique name and one that easily depicts what your business is all about. Here is what to do in choosing a unique name for your business:
- Be sure the name is available. You can easily do this by checking the desired name against the list of registered business in your state’s databases
- Keep the name short and simple, one that is easy to spell, pronounce and remember
- Choose a name that reflects your brand.
Step 2: Come up with a business plan
You have to carefully take your time to do this . You will need this plan for various purpose including when you need some external funding or you want to get into partnership. An ideal business plan should contain the following:
- A summary of your business in few sentences
- Overview of your business e.g history, what the business is all about, vision, strategies, etc.
- Who are your target customers: Your business plan should also be able to contain a list of your target customers/ clients. What are their age range? Where do they reside and how can you get to them.
- Marketing plan
- Operations plan
- Management team
- Financial plan: This should include the cost of starting up, how you intend to get funds , what your profit will look like, etc.
Step 3: Select a legal structure
There are 5 common legal structures for businesses and these include:
- Sole proprietorship
- Limited liability company
- C corporation
- S corporation
Choose the one that that suits your business and get registered in that order in your state of operation
Step 4: Source of funding
Next is to think of source of funding for your hot shot business and how to get the funds. There are different ways you can get funds for your hot shot business. Such include:
- Gifts from family and friends
- Soft loan
- Bank loan
- Angel investors
Step 5: Get a location
Choose a location that will be suitable for your hot shot business. Let your location have good proximity to your target audience.
Step 6: Get your business registered with Internal revenue service (IRS).
You will be issued an Employer Identification Number (EIN) which you would need when opening an account in the bank. However, if your business is operating as a sole proprietorship, you wont need an EIN.
Step 7: Get a business account
After registering your business with IRS, the next step is to open a business account. You will need the following details when opening a business account:
- Your company’s articles of incorporation
- Driver’s license
- Proof of address, etc.
Step 8: Get a business credit card
You will be making expenses once your business commences operation. It is important you separate business expenses from personal expenses. You can get a business credit card from your bank or from a credit card company.
Step 9: Get necessary business licenses and permits
Some of the licenses include:
- A business license from your local government
- A commercial driver’s license
- DOT number from state (department of transportation)
Step 10 : Get a business insurance
There are different types of insurance:
- Auto insurance: this kind of insurance covers your vehicle should in case it is stolen or damaged
- Commercial property insurance: this takes care of the company’s property in case of fire, vandalism or theft.
- General liability insurance: This takes care of accidents and injuries that happens within your company.
- Workers compensation insurance: this covers your employees. It covers medical expenses, lost wages, etc.
- Business interruption insurance: this cover up for last income and expenses. In the eventuality of your business closing temporarily due to some occurrences.
Step 11: Start procuring necessary equipment
Some of the equipment you will be needing include trailer, ramps, tie downs, etc. You can either buy or lease these equipment.
Step 12: Develop and launch out your marketing strategies
You need to be very strategic in your marketing plans. Remember, you are not the 1st in this kind of business, you must seek unique methods that will stand you out from your competitors.
Some of the strategies you could employ include:
- Get a good graphic designer to design a unique logo for you.
- You also need to create some beautiful business cards for your hot shot business
- Take advantage of digital marketing : This would include you setting up a website, social media accounts and the likes. You can run this yourself if you are knowledgeable enough about digital marketing or get a social media specialist to do so for you.
Step 13: Get necessary software
- Some of the software you will be needing include :
- Truck routing program
- Truck scheduling program
- Accounting program (to track expenses and income)
- Communication program (to keep in touch with your drivers and customers)
Step 14: Its time to start out
Having learnt from step 1 to step 13 how to start a hot shot business, its time to step out and start making some good profits for yourself.
Pros of Getting Involved In A Hot Shot Business
1. Cost of running the business is not usually expensive
Apart from having to get funds to buy a truck, which you can even lease or buy using loan, it doesn’t take too much money to run a hot shot business. As you are making profits, ensure you are daily setting aside some funds for maintenance of your equipment.
2. Business is quite lucrative
If you know and understand the nitty-gritty of the business, you can make a lot of income running a hot shot business.
3. Work hours is flexible
Hot shot business is one business that offers a flexible work duration. You are the owner of the business, so you can decide when you are available for work and when you are not.
4. Business can be run independently
You don’t need to join any association or have any partnership to run a hot shot business. Once you have all the tools, you can start out.
5. Business can be done remotely
You don’t need an office space to run a hot shot business. You can take advantage of the online space to promote your business and then have a little garage to park your truck. Most people don’t have the office address of Jumia or Konga in Nigeria, but these logistics companies run effectively .
6. Marketing and promotion can be done at a cheaper rate
Digital marketing is far more cheaper and easier than the traditional marketing. You can take advantage of the different social media accounts to promote your hot shot business. If you are not really tech- savvy, you can employ the services of a social media specialist.
Drawbacks Of A Hot Shot Business
- Since you are not the owner of the business , you are going to have to take responsibility to grow your customer base.
- Income may be irregular at the beginning since you are still building your customer base.
Now you have the information you need to start a hot shot business. Another step you could take is to go for an internship. I mean you should look for someone already doing fine in the business and try to understudy the person for some weeks to learn the nitty gritty of the business.
Frequently Asked Questions
Is hot shot business a good one?
Yes. Hot shot trucking is actually a profitable business. Infact, you can operate the business as aside hustle while maintaining your 9-5 job. Once you have the right knowledge and right equipment.
What is involved in hot shot business?
Hot shot business usually involved hauling small and time-sensitive loads from one location to another. Usually, for a customer per time.
Do I really need a trailer to do a hot shot business?
With a pick-up truck , you can start a hot shot trucking business
- www. pro-delivery. com – What the Pros and Cons of Hot Shot Trucking
- www. nationviews. com- Benefits of starting a hot shot trucking business
- www. truckstop. Com- 17 Steps to start a hot shot trucking business