All little boys (and many girls) love dump trucks. Dump trucks have been a significant part of business and construction, both in America and around the globe. So if you love dump trucks and love to drive, plus have an entrepreneurial spirit, going into the dump truck business could be a great opportunity for you. The dump truck operator business isn’t currently saturated, which means there is an excellent opportunity to generate revenue by doing something that you love.
Dump trucks are used to transport loose material such as gravel, sand, or dirt for construction purposes. Almost all modern dump trucks operate from hydraulics and come in many different configurations. Each style of a dump truck is designed to accomplish a particular task in the supply chain for construction materials. And before you can even get into the business, you or any other drivers for your truck will need to obtain a commercial driver’s license (CDL). By that, you can be permitted to commence operations. The dump truck industry and all related activities are regulated by the United States Department of Transportation (USDOT), the Federal Motor Carrier Safety Administration (FMCSA) and the Federal Highway Administration (FHWA).
The organizations above have created regulations that are designed to keep safe the drivers, those driving on the roads, and all construction workers that would interact with the dump truck. Therefore, you need to understand that this business is highly regulated, and you will be expected to abide by all rules and requirements to operate legally.
What to Ask yourself Before you Go into the Dump Truck Business
If you know that you can obtain a CDL (or you already have one) and you think that the dump truck business is right for you, then there are some questions that you should ask yourself. Take time to consider each of these questions carefully, as well as your answer. If any of the questions and their respective answers makes you squirm a bit, it may mean you have some additional thinking to do.
- How many dump trucks do you plan to use in your business?
- What type of dump trucks are you going to get?
- How will you finance the trucks – will you buy or lease?
- Will you buy the trucks and have them contracted by other companies?
- Will you hire additional truck drivers, or will you be the sole owner-operator?
- Knowing the trucks will be subject to serious wear and tear, how will you maintain the trucks?
- Will you hire your own mechanics, or have maintenance work outsourced?
- Is there a demand for the work in your area?
- What is the distance in which your business will operate?
- How will you obtain new customers?
It is important to understand that obtaining customers in this industry is not easy. So, start by finding the market (and the geography) in which you want to do business. The type of work that is needed and the geography of the area will likely determine the type of truck that you will need. Certain markets include the hauling coal to the mines. In others, it might entail hauling sand for masons and builders (even pool companies). Or, you could be bringing asphalt materials to road crews, or transporting and distributing road salt during the harsh winters (if you are in a northern state).
Further, you may be able to profitably run and maintain a trucking business if you are lucky enough to get hired by your municipality or local government as a contractor truck. Or, you could seek and secure clients that are in need of short hauls with short travel distances or wait time.
What to Consider for your Dump Truck Company Business Plan
For the reason above, and so many others, before you dive right into the dump truck business, you should start by creating a business plan. Within that business plan, you should be sure to address the following critical components.
- Job duties – Your duties will include loading and unloading materials and waste and transporting those items from one site to another. This job entails the lifting of heavy materials manually on occasion, but usually with the help of machinery that is operated by professional machine operators.
- Geography of operations – Before starting your business, you will want to research where you want to work. You may wish to approach construction and mining companies in your area to see if your services are needed. Or, you may wish to do some research to see if other areas of the country could use your services more than others. You may find that in newly developing areas across the country, there will be a greater need for your services.
- Costs of operations – Owning and operating a dump truck is not a minor investment. You can choose to either buy a new or used dump truck or to lease one. This is a matter of personal preference or the state of your finances and your ability to be approved for financing. Used dump trucks can cost between $30,000 – $40,000 but can easily run over $100,000 if they are in excellent condition. New models, however, can sell for over $150,000. Depending on the payment option you select and your credit score, as an owner-operator, you can expect to finance your dump truck for a reasonable interest rate of under 6%.
- The competition – Much of this information will come from your study of the geography in which you plan to operate. As part of that process, you will want to understand who else is operating in that area. Understand their branding, as well as their strengths and weaknesses. Spend ample time researching how they go to the market and what makes them different. This will help you to ensure you have a proper differentiator in the market.
Acknowledging the Challenges
If you are feeling good about your ability to do the job, the costs required, where you will operate, and who your competition will be, that is a great step towards creating your business plan. However, you should also be ready to acknowledge the challenges that you will face in the business.
- Rising cost of gas – Gas prices will represent a substantial part of your expenses. If the job requires you to back-haul (return to where you started from), you will be burning twice as much fuel, which will absolutely increase your operating costs. Jobs such as hauling pavement can be easier on fuel usage as there will be no back-hauling and trucks are not overloaded at all times.
- Maintenance and the rising cost of truck parts such as tires – Maintenance is also a critical aspect of the dump truck business, which is the case if you are buying used trucks. Maintenance is the key to the longevity of your equipment without incurring significant repair fees from outside repair shops. Your business will quickly fail if your truck’s tires are have blown or the truck can’t get from point A to point B. Not only that, but properly maintained trucks will incur less expense for equipment violations at the weighing scales.
- Potential lack of work – Operating a dump truck will come with high operating costs. As such, you may find that your business is going to struggle with generating profits, especially upfront. Be sure that you ponder carefully how you will be able to profitably run a dump truck business without your costs skyrocketing. One option you may wish to consider is to start a dump truck business in partnership with another related business – a construction company or road maintenance company.
- High overhead costs – Be prepared for payments for insurance coverage for both the trucks and drivers, heavy equipment dealers.
- Cost of hiring drivers, such as wage, workers compensation, etc. – Remember that your employees (nor you) can work for free. In addition to salaries, you need to be prepared to cover standard benefits that will be expected by your employees.
- Competition from other truck drivers willing undercut you to get the job – Sometimes you have to pay to play, so be prepared to provide aggressive pricing that is enough to help you turn a profit, but doesn’t turn away work. Over time and as your reputation earns it, you will be able to demand a higher rate.
Tips to Getting Started
As with any business, there are many things to consider, such as the type of business you plan to operate, where you operate, and what you want to invest in getting started. In addition to these items, you should consider these suggestions.
- Experience – Consider if you know what you are doing. If you have never driven a dump truck before, look for opportunities to drive a truck for another company for a while. The list of the trucking companies will help you to find a job. Develop the expertise to become great at what you do, and ensure it is something you could see yourself doing for years and years to come.
- Learn from others – Talk to other dump truck owners, operators, and owner-operators that are in your area (or the area where you plan to go into business). Look for online forums where you can learn from others, ask questions, and eventually share your own expertise. Build a network of other dump truck drivers.
- Find your differentiator – We mentioned this before when we discussed the competition. The goal here is to find out what is different about your approach to the business – this will be your niche. Once you have identified your niche, you can then establish your target group of customers.
- Be legal – Check with your commercial insurance company and Department of Motor Vehicles (DMV) to ensure you understand everything you need to know. This will help you to operate legally and safely.
Advertising your Owner-Operator
Once you’ve decided to go into the dump truck business, you need to make sure that prospective customers know you are there and ready to work. To do this, you need to advertise. And in many cases, the skillsets of an owner-operator dump truck driver and a traditional marketer are not the same. Don’t fret, though, as many of the things you need to do to advertise your business and grow brand recognition are highly learnable.
- Advertise on your dump truck – This may seem like a no brainer, but oftentimes people overlook the fact that your vehicle can become a mobile billboard for your business.
- Build partnerships with construction companies – Nothing helps business better than a little bit of camaraderie and networking. Take the time to take to the street and look for construction companies for whom you could partner. If they don’t know you are there, you won’t get called for work.
- Get business cards – As you get out and about and start meeting companies that you can partner with, be sure to drop a business card. So they can contact you after you leave. You may wish to work with a professional graphic designer for the design of your business cards and the advertisement on the side of your truck. Creating an official logo for all of your advertising efforts will help you with brand recognition and future cognitive recall.
- Create a social media page – This may seem a bit odd considering the business, but ALL businesses can benefit from social media. The average American spends nine hours per day on the internet which means it is a great place to see and be seen. Create a page, and then ensure you are correctly linked and connected across major sites and search engines such as Google, Twitter, and even the Yellow Pages online site.
- Website – You must have a website – this is a non-negotiable. And not only do you have to have a website, but it needs to be continuously updated with new and relevant information. Make sure that your site surfaces to the top of web searches on Google, Yahoo!, and other search engines. As your business grows, consider hiring a freelance social media specialist that can help you to maintain your social media pages, website, and search functions. So that you can be found easily.
Do your Homework before Starting
If you take the time to think through the above-mentioned concepts and questions, you will be off to the right start in getting your dump truck business running. Failure to truly consider how to set up your business and differentiate yourself will result in a short-lived and costly business. Businesses aren’t successful overnight (and if they are, it is rare). In most cases, you will need to put in some blood, sweat, and tears as you work through the kinks in the initial months. But perseverance and a solid business plan will pay off – it is these things that can be the primary difference in success over failure.