How to Start a Truck Dispatching Business

Truck dispatching companies are invaluable to trucking businesses. They secure new clients for the trucking companies, schedule load pickups and drop offs, and sometimes manage the invoicing and collections. 

A truck dispatching business is one that you can run remotely from home, making it an attractive opportunity for an aspiring entrepreneur.

But before you jump in, you’ll need to understand the business. Luckily, this step-by-step guide details all the business insight you need to start a successful truck dispatching company. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Truck dispatching industry trends

Truck dispatching is part of the general freight trucking industry.

Industry size and growth

• Industry size and past growth – The U.S. general freight trucking industry is worth $89.7 billion in 2023 after growing 2.5% annually for the last five years.((https://www.ibisworld.com/industry-statistics/market-size/general-freight-trucking-truckload-united-states/))
• Growth forecast – The U.S. general freight trucking industry is projected to decline 1.9% in 2023.
• Number of businesses – In 2023, 85,237 general freight trucking businesses are operating in the U.S.((https://www.ibisworld.com/united-states/market-research-reports/general-freight-trucking-truckload-industry/))
• Number of people employed – In 2023, the U.S. general freight trucking industry employs 415,263 people. 

Trends and challenges

Trends

• AI powered software has been developed to use predictive analytics to increase on-time deliveries.
• More and more online courses in truck dispatching are being offered and promoted on social media.

Challenges

• As the truck dispatching industry becomes more technology driven, dispatching companies must continuously update their digital tools.
• Truck dispatching has become a more popular entrepreneurial pursuit, increasing the competitiveness of the industry. 

Demand hotspots

• Most popular states – The most popular states for truck dispatchers are Ohio, Wisconsin, and West Virginia.
• Least popular states – The least popular states for truck dispatchers are Oregon, Maine, and Hawaii.

What kind of people work in truck dispatching?

• Gender –  43% of truck dispatchers are female, while 57% are male.((https://www.zippia.com/truck-dispatcher-jobs/demographics/))
• Average level of education – The average truck dispatcher is high school educated.
• Average age – The average truck dispatcher in the US is 43.5 years old.

How much does it cost to start a truck dispatching business?

Startup costs for a truck dispatching business range from $3,000 to $7,000. Costs include a computer, dispatching software, and a marketing budget.

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $500	$300
Business licenses and permits	$100 - $300	$200
Insurance	$100-$500	$300
Website	$500 - $1,000	$750
Computer	$1,000 - $2,000	$1,500
Dispatching software	$1,000 - $2,000	$1,500
Sales and marketing budget	$500 - $1,000	$750
Total	$3,300 - $7,300	$5,300

How much can you earn from a truck dispatching business?

Typically, dispatchers charge around 6% of each load that they secure and dispatch. One truck might generate $5,000 in revenue per week, bringing in $300. Your profit margin should be around 80%. 

In your first year or two, you could work from home, dispatching five trucks, bringing in $78,000 in revenue. This would mean $62,400 in profit, assuming that 80% margin. 

As you gain traction, you might dispatch 20 trucks. At this stage, you might have an office and hire staff, reducing your margin to around 30%. With annual revenue of $312,000, you’d make a tidy profit of $93,600.

What barriers to entry are there?

There are a few barriers to entry for a truck dispatching business. Your biggest challenges will be:

• Learning the ins and outs of truck dispatching
• Breaking into a competitive market

Step 2: Hone Your Idea

Now that you know what’s involved in starting a truck dispatching business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research truck dispatching businesses to examine their services, price points, and customer reviews. 

• Make a list of businesses that offer similar services. 
• Review your competitors’ services – their features, pricing, and quality – and marketing strategies
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that specializes in small truck dispatching. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You’ll need to decide the extent of the services you want to offer. They can include:

• Finding loads
• Assigning loads and managing drivers
• Managing motor carrier compliance
• Providing customer service
• Handling billing and collections

How much should you charge for truck dispatching?

Prices are generally a percentage of each load’s revenue. You’ll want to determine your percentage charged based on market prices in your area, but also on your ongoing costs. 

Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be two-fold. You’ll target independent truck drivers or small trucking companies, but you’ll also need to find businesses that need loads hauled. 

You can connect with both groups on LinkedIn or call on them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Truck Dispatching Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “truck dispatching” or “dispatching”, boosts SEO
• Name should allow for expansion, for ex: “CargoExpand Dispatching” and “OmniRoute Logistics” over “HaulHub Dispatch” and “FreightFlow Coordinators”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Truck Dispatching Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Summarize the goals and mission of your truck dispatching business, highlighting its potential to streamline logistics operations.
• Business Overview: Provide a brief description of your truck dispatching business, including its location, the types of clients you’ll serve, and the benefits of your services.
• Product and Services: Detail the dispatching services you offer, such as real-time tracking, load assignment, route optimization, and 24/7 support for trucking companies.
• Market Analysis: Analyze the trucking industry’s demand for dispatching services, considering factors like the growth of e-commerce and the need for efficient freight management.
• Competitive Analysis: Identify competitors in the truck dispatching sector and emphasize your unique features, such as advanced technology solutions or tailored dispatching strategies.
• Sales and Marketing: Outline your sales strategies, including client acquisition methods, pricing structures, and marketing efforts to reach trucking companies.
• Management Team: Introduce key team members with experience in logistics, dispatching, and technology, showcasing their qualifications.
• Operations Plan: Describe the day-to-day operations of your truck dispatching business, including dispatching procedures, communication protocols, and the software or systems you’ll use.
• Financial Plan: Present financial projections, including startup costs, revenue forecasts, expenses, and profitability estimates for your truck dispatching business.
• Appendix: Include case studies demonstrating successful dispatching projects, testimonials from satisfied clients, and any technology partnerships or certifications that validate your expertise.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to truck dispatching businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your truck dispatching business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a truck dispatching business. You might also try crowdfunding if you have an innovative concept.  

Step 8: Apply for Business Licenses and Permits

Starting a truck dispatching business requires obtaining a number of licenses and permits from local, state, and federal governments.

Some states may require a truck dispatching permit.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your truck dispatching business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as TruckLogics, or Axon, to manage your loads, scheduling, dispatching, and invoicing. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Get a Quote”. This can sharply increase purchases. 

Marketing

Here are some powerful marketing strategies for your future business:

1. Strategic Partnerships: Build strong alliances with trucking companies, shippers, and freight brokers to enhance your network and secure reliable partnerships, increasing your business credibility.
2. Niche Targeting: Identify specific industries or geographical areas where there is high demand for truck dispatching services, allowing you to tailor your marketing efforts and stand out in a specialized market.
3. Referral Programs: Implement referral incentives for existing clients, drivers, and industry contacts to encourage word-of-mouth marketing, tapping into the power of recommendations within the trucking community.
4. Social Media Engagement: Leverage social media platforms to showcase your expertise, share success stories, and engage with the trucking community. Use platforms like LinkedIn and Twitter to connect with industry professionals.
5. Content Marketing: Develop informative content, such as blog posts, articles, and infographics, addressing common challenges in the trucking industry. Establish yourself as an authority to attract and retain clients.
6. Attend Industry Events: Participate in trucking and logistics conferences, trade shows, and networking events to meet potential clients and partners face-to-face, fostering trust and building relationships within the industry.
7. Optimized Online Presence: Ensure your business is listed on online directories relevant to the logistics industry. Optimize your Google My Business profile for local visibility and positive reviews.
8. Offer Trial Periods: Provide a trial period or discounted initial services to entice new clients. This allows them to experience the value of your dispatching services firsthand, increasing the likelihood of long-term partnerships.
9. Customer Testimonials: Collect and showcase positive feedback and testimonials from satisfied clients. Real-world success stories can significantly influence potential clients when making their decision.
10. Invest in Technology: Utilize advanced dispatching software and technology to streamline operations. Highlight your commitment to efficiency and accuracy in your marketing materials, showcasing the benefits of your technological investments.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your truck dispatching business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your truck dispatching business could be:

• Streamlined truck dispatching solutions for optimized logistics.
• Expert truck dispatching services tailored to your business needs.
• Simplify your truck dispatching operations with our cutting-edge technology.

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a truck dispatching business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in truck dispatching for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in truck dispatching. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a truck dispatching business include:

• Dispatchers – dispatch trucks
• Billing specialist – handle client load invoices and payments
• Salesperson – find new clients with loads to haul, and new trucker clients

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Truck Dispatching Business – Start Making Money!

Truck dispatching companies are in a niche industry and provide valuable services to truck drivers and trucking companies. You’ll just need to learn about the logistics of truck dispatching by taking some online courses, and then you can build a lucrative home-based company that has the potential to grow into a professional operation. 

You’ve got the business part down now, so you’re ready to hit the road to entrepreneurial success!