Hotshot YouTuber Load Mizer once made a video to help everyone understand the steps and the processes involved in what you may need to do based on where you live, in order to get your own authority to start your own operation.

These are the things that you’re going to have to go through in order to make that happen:

1. Talk to an Accountant

“Find an accountant close to you, in your state that deals with truck drivers. Not exclusively, but make sure they know what they’re doing when it comes to the truck industry. It doesn’t matter if it’s semi-truck or hotshot — it does not matter. Find a good accountant. You’re going to spend a couple of hundred dollars a year in order to save thousands. I promise you that. Almost every single good accountant is going to double as your tax person. You can’t find a good tax person that’s going to double as your accountant. Remember that. So number one, talk to an accountant. They are going to talk to you about your best options to structure your business.”

“Now when that comes down to step two, which a lot of people pull step one on, what are you going to be — sole proprietor? Don’t recommend that. LLC? What’s an S-corp? In many cases, with you as a one-truck operation, an S-corp is going to be your best bet. You are going to avoid higher taxes. But you say, “I live in a state that has no income tax.” They may not have an income tax, but now you’re self-employed. So as a single-member LLC, you’re going to pay self-employment tax. How much is that? Depends on your state. Talk to your accountant.”

“In the state of Kentucky where I live, it’s over 15% self-employment tax. That’s $15,000 for every $100,000 gross. With an S-corp, all I do is pay a payroll tax based on how much I make. Now the profit from the S-corp is still mine to use. But all I have to do is pay myself a reasonable wage throughout the year, even though all the profit is mine to use. Now this will go down into bylaws. How you break that down and use that legally is in your bylaws. Again, talk to an accountant. They’re going to teach you a whole lot that you may or may not have known. Take advantage of this. This is going to be super important. Step number one, find an accountant.”

2. Set Up Your Business

“Now if you’ve talked to an accountant, you’re probably going to use that accountant to set up your business, generally speaking. Because whether it’s an LLC or an S-corp, you’re going to need a Registered Agent. Well, guess who’s going to be your registered agent? Your accountant. This is a very, very important step. I can’t stress that enough.”

“I’m going to steal a quote from hotshot Dave here: ‘Let the professionals be the professionals.’ You are going to wear plenty of hats. In this, you’re going to be a driver, you’re going to be a part-time mechanic, you’re going to be a dispatcher, you’re going to be a bookkeeper. You are not going to have time to effectively run your business if you have to try to be an accountant and a tax pro. Let’s pay someone to do that for you. You will make plenty of money to afford this. You don’t want to mess this up. And you don’t want to lose your time dealing with this.”

“So now that you’ve figured out how to structure your business, they’re going to register you with the state. They’re going to get all your paperwork in order. They’re going to have you sign everything you need to sign. And they will file for your EIN, which is free. Don’t let anybody fool you and act like that isn’t free. Most of the money you’re going to spend on this is going to be the filing fees for your state. Now you can actually look those up. Make sure that the name you want to use for your business is available in your state.”

“This is why I don’t like the broad, ‘this is how you start trucking,’ because every single state is different — in almost every single category. Besides purchasing equipment, every state’s different. It depends on where you live. I can’t give you a broad brush to paint with on this. It’s very particular to where you are. So you’re going to go to your State’s website and type in the business name that you want and make sure it’s available. Once you know you make sure it’s available, that’s what you’re going to name your business. Everything’s fine past that. Now all the filings are going to go through.”

3. Get Your Business Name Approved and Filed

“The rest of the steps don’t have to be done in order. But in order to file for your authority, which is a $300 one-time fee, you’re going to have to have a business name to put it in, and that name has to be approved and filed with the state and needs to be activated.”

“You don’t need trucks just yet. You don’t need insurance just yet, even though insurance is what kicks your authority off. Once you apply for your authority, you’re going to get bombed. It says you may receive phone calls or text messages? No. You’re going to get bombed with phone calls, texts, emails. Because now all your information is public. Remember that. It just got shot out over the nation that you’re a new MC. You’re going to get hammered with things that are asking you, “Have you found insurance yet? We offer this, we offer that.” Factoring, fuel cards, BOC-3 filing…”

“When you go through this, these are the things that you need in order to make your MC ready to be approved. And that’s a 21-day process after your BOC-3 is filed, which is just Registered Agents throughout the state. It’s a one-time fee. And when you talk to your insurance people which was coming up next, they’ll tell you — usually your insurance company will file it for you. Mine did. It was $25. I’ve seen some that were $100 a year. This isn’t an annual renewal. This thing you only need to be filed once.”

“But that’s where you’ll get a lot of these emails and stuff. Just don’t reply to any of them — ignore all of them. These are vultures that are coming after you, to prey on people that don’t know. Ignore all of those. And your accountant, once again, is going to help you out. To smooth this process, you’re going to need to register with UCR (Unified Carrier Registration).”

“I saw somebody say that that was like $180? I paid $59 for mine. Probably state-specific. Once again, of your BOC-3, I paid $25 to file mine. That’s all it was. And it was filed the next day.”

4. Find an Insurance Policy

“With an insurance policy, you can get a quote because you’re going to already know what type of vehicle. The only thing you’re going to need right now is to know which type of vehicle and which type of trailer you’re going to have and what they’re worth. That’s all you’re going to need for a quote. Your company name can be generic. You can actually do this before you do any other step. You’re not gonna be able to pull the trigger on it, but you can do this in whatever order you want to — but they all have to come together. Once you shoot that authority out, all this stuff needs to happen relatively quickly. So you’re going to get an insurance quote. It’s going to be based on the equipment that you’re wanting to run. They can use generic VINs to pull you a quote. It’s not going to be 100% accurate, but it’s going to very much put you in the ballpark.”

5. Go Shopping For A Vehicle

“So once you agree to the quote, you’re going to go shopping. You’re either going to do the Enterprise route or you’re going to finance a vehicle — or buy one outright. Now what you’re going to need to do is have that ready to pull the trigger on once you find what truck you’re going to use. You find what trailer you’re going to use. Be ready to pull the trigger on that because now you can actually get those VINs to your insurance company. Sign an actual dead-on quote and you’ll be ready to roll with that. Then go pull the trigger on the truck, trailer and all that. So when you file your insurance, they’re going to automatically send — and mine again was next day. They’re going to see that you have insurance filed with the FMCSA. Now you’ll get a letter in the mail from the FMCSA with a phone number on it to call to finalize new entrant registration. Basically, all this is going to do is make sure that you’ve got everything that we just said had to be filed. That when you filled out on the website, when you applied for your authority, that everything was accurate through that.”

6. Register Yourself For a Safety Audit

“And the next thing it’s going to do, which is mainly what it is, is to register yourself for a safety audit, which is within 180 days of when your authority becomes active. The State Police will conduct a safety audit on your business. Once all that’s done, the FMCSA is in a 21-day window to either approve or deny your authority applications. And then you’re ready to roll. But in that timeframe now, you’re going to want to pull the trigger on everything else. You’re going to want to have the truck and trailer. You’re going to need to buy equipment. You’re gonna have to look at ELD vendors and all that and the other — fuel cards, factoring (if you’re going to use factoring), etc. That’s where you roll through that.”

The Bottom Line

“Those first steps are important. And the number one step that’s very much so important is to find a good accountant. It will make or break you. I promise. So that’s it for this one, guys. I’m not going to crunch down numbers like a bunch of other people do because like I said, I can only give you what pertained to me and my state. And I can’t do the research and it’s just not worth me knowing what the other 48 are. You’re kicking off your own authority. You’ve got to do some of your own research. But that right there is going to get you further than any video on the Internet. Okay, find a good accountant that knows the truck industry and is in your state. So I hope this helped you guys out. If you have any questions, leave them for me. If you feel like I left anything out, go ahead and ask. But I will see you guys next time.”