Creating a Marketing Plan Dy

Feasibility Analysis

Dynisha Beamon

BUS402

Professor: Adrienne Garabedian

August 12, 2022

Introduction

The trucking industry is going through a major shortage of drivers and for this reason it is a great time to enter into this market and grow a small business. FTR said 109,340 trucking companies opened for business in 2021. That’s 50,202 more than 2020 (59,538) and 65,787 more than 2018 (43,953), the third-largest year since 1999 when 15,597 carriers were granted authority (Finney, 1). The growth shows the reason for entering the market is now. The business that this anaylsis will focus on is hotshot trucking.

Industry and Market Feasibility

Hotshot trucking is one of the most lucrative and profitable businesses in the United States. The attraction to hotshot trucking is because of the lower barrier-to-entry than traditional Class 8 trucking, and the trade-off emphasizes time-sensitive deliveries. U.S. $732.3 billion in gross freight revenue (primary shipment only) from trucking. This represents 80.4% of 2020's freight bill (T3L, 2). Using load boards will allow the business to prove themselves and create contacts for future business as long as the businesses focuses on their customer service and on time deliveries.

Product or Service Feasibility

Hotshot transporting has become an attractive trucking niche to many who want to work for themselves and have more control over their earnings. The ease of entry, open road freedom, and earning potential is becoming more attractive to many. Though the pandemic and other economic factors have hurt parts of the hotshot sector, just as they have different trucking segments, some savvy operators show that there’s good money to be made even in turbulent times (Dills, 3). When it comes to the cost of the equipment to get started with a dually and flatbed, it is much cheaper than an 18-wheeler and a lowboy trailer, and in hot shotting, a CDL is not mandatory for loads under 26,000.

Financial Feasibility

Many hot shot truckers usually don’t make deliveries of enormous freight because they use utility trailers and are generally contacted by request. This allows them to freelance with their vehicles and find work independently. Some hot shot truckers work for a particular contractor or trucking company. These jobs are often filled by the first available driver. Taking on these time-critical jobs helps provide hotshot drivers with a comfortable wage.

Many truckers have the ability to fix their equipment when something goes wrong. These truckers often have lower maintenance needs compared to big rigs. Their equipment demands do not have high repair costs and no company-mandated service because they use their trucks and utility trailers. Lower maintenance requirements may also mean that hot shot truckers can save more money.

Entrepreneurial Readiness

When entering this market, it is essential to invest in dependable equipment because truck breakdowns can cost the driver more than just repairs. If they have a load that is time sensitive and they miss the deadline, they could be penalized. Examining the opportunities available within the market by checking out load boards will give insight into an opportunity locally and if the market will force them to go out over the road. One of the essential considerations is insurance and if the associated cost will allow the business to be profitable. Several things drive insurance costs, including the driver's record and the state from which you are trying to get insurance.

Reference

1.Finney, L. (2022, February 24). Surging ahead: Number of new trucking companies Shattering Records. TheTrucker.com. Retrieved August 12, 2022, from https://www.thetrucker.com/trucking-news/truckload-authority/trends-in-trucking/surging-ahead-number-of-new-trucking-companies-shattering-records 

2.T3L. (2022, May 18). Is hotshot trucking profitable in 2022? Trucking Business Set Up, MC & DOT Number. Retrieved August 12, 2022, from https://trinity3logistics.com/is-hotshot-trucking-profitable-in-2022/ 

3.Dills, T. (2021, November 2). Hotshot trucking maintains appeal with owner-operators. Overdrive. Retrieved August 20, 2022, from https://www.overdriveonline.com/business/article/14897954/hotshot-trucking-maintains-appeal-with-owneroperators