Tag: becoming an owner operator

Tips for Starting Out As an Owner Operator

Bob Holtzman

There’s nothing quite like owning your own business and being your own boss, but you have to take care to make the most of your investment of time, money and energy. The right approach and information can mean the difference between success and failure, so be sure you’re armed with new owner operator tips as you build your trucking company.

Know How You’ll Bring in Money

You likely have a loose idea of how you plan on making money as you’re sketching out your truck owner operator business plan, but you’ll be much better off solidifying that idea as much as possible. As an owner operator, there are two main ways to make money: leasing to a carrier and operating on your own by booking your own loads.

If you choose to lease to a carrier, you’ll need to get in touch with recruiters to see what will be expected of you as a driver in regards to how long you’ll be out, the pay you can expect and the type of insurance you’ll need. Be sure to talk to drivers as well to get a balanced idea of what you can expect if you choose to work with a particular carrier.

Like the idea of booking your own loads? Chat with brokers and potential customers, and check out load boards as well. Be clear on what brokers will expect from you and the type of equipment and truck you’ll need to be successful. Know that if you’re brand new to the trucking industry, you’ll have a lot of work ahead of you if you decide to book loads on your own.

Save as Much Money as Possible

Besides money coming in, you’ll also need to think about the money going out as you put your business together. If you don’t yet have a truck, save up as much as possible on a down payment or leasing your truck. Not only will your equipment payments be lower if you offer up a hefty down payment, you’re more likely to have an easier time securing financing with a sizeable down payment.

Besides money for your truck, you also have to think about operational costs. You’ll need trucking insurance and funds for out-of-pocket expenses, maintenance, food, fuel and unexpected repairs. There might also be a period where you’re unable to make runs because of a mechanical breakdown, so plan your budget accordingly.

Boost Your Credit As Much As Possible

Speaking of financing, something else you can do is increase your personal credit score as much as you can before applying for financing. Request a free credit report and look over it for any mistakes or discrepancies that need to be corrected before lenders pull your credit. Pay all bills on time, early if possible, and do your best not to use any more of your credit if you don’t absolutely have to. While you may have to put off launching your business for a little while as you increase your credit score, doing so will only benefit you later in the form of low interest payments, which means more money to funnel into the success of your business.

You might also want to look into getting a business credit card so you can make purchases specifically for your business. This is a good idea so you can keep your personal spending separate from your business spending. Just like your personal credit score, take steps to keep your business credit score as high as possible at all times.

Plan for Preventative Maintenance Before You Need It

Also be sure you think about preventative maintenance, even if you plan on purchasing a brand new truck. While you’re exploring options for which truck you think is the best fit for your business, look into how much preventative maintenance will cost. Even if that maintenance is several years away, putting money back for it now ensures you not only have a means to pay for that necessary maintenance, but that you don’t have to put that maintenance off. Just like with a regular automobile, taking care of small issues and taking steps to keep your rig as fully functional as possible helps avoid unnecessary breakdowns and the equally unnecessary expenses that come with them.

Think About Your Personal Relationships

If you have a spouse, significant other or family, think about how your relationship with them could change while you’re on the road. Issues can develop with you being away from home, so be sure you have this discussion with your loved ones about how you’ll address any problems that might come up in the future so that you don’t risk a disruption in your business or personal life.

Have a solid foundation underneath you before becoming an owner operator. The right insight paired with a little foresight is sure to serve you and your aspirations well.

5 Steps to Becoming an Owner Operator in the Trucking Industry

Bob Holtzman

Many commercial drivers dream of the day they become an owner operator instead of simply making money for someone else. If becoming an owner operator is a goal of yours, then you probably also anticipate being able to make your own schedule as well.

The journey toward actually reaching this goal may seem too complicated for many to achieve but with a little bit of focus and hard work, the benefits of being an owner operator could be yours sooner than you would think. The process is easiest for drivers who have already had a few years of experience behind the wheel. While driving truck for someone else, you are gaining a more complete understanding about each part of the trucking industry, and this understanding is what is sure to help you succeed in your goal.

One Step at a Time

Though the process may seem daunting, drivers who are willing to take one step at a time and realize that each step is imperative to the end goal become owner operators sooner than most would have thought possible. Following are five steps that can lead you to your goal of ownership.

  1. Important Numbers – The first step you need to take is to get a registered with the Federal Motor Carrier Safety Administration (FMCSA) and get a USDOT number. This number will be used to identify and collect information about your safety information. This information includes any compliance reviews, inspections, data collected in audits and crash investigations. Once you have a USDOT number, You will need to request an Interstate Operating Authority (MC number). The kind of operating authority you need will depend on the type of cargo your plan to haul. There is a one-time fee to get a MC number from the FMCSA.
  2. Understanding Authority – By registering through the Unified Registration System (URS), you will be able to get our trucking authority in 20-25 business days. You will need to have your insurance company provide proof to the FMCSA that you have liability coverage.
  3. Insurance – You may think, while looking at insurance for your truck, that it is just in case of vehicle accidents. Understanding owner operator insurance requirements is something that you need to fully understand before moving forward in the process. Truck insurance is very different than simple auto insurance as it protects not only the owner, but also covers any loss of load or other assets. Certain kinds of insurance coverage are required by the FMCSA depending on what you plan to haul. Some types of freight, such as hazmat loads will require very different insurance than standard loads. The average insurance cost for an owner operator with one truck varies from an average of $8,000 – $12,000 per year.
  4. Lease or Own – One of the most difficult decisions, when considering becoming an owner operator. One of the biggest reasons that you might want to consider leasing a truck is that commercial trucks cost a lot! A decent used truck can cost anywhere from $60,000 to $100,000. Some leasing companies, however, do provide the option of leasing to own. This means that each lease payment gets you a step closer to ownership without having to pay the whole cost up front. If you decide that this is the right option, you may be required to haul for the leasing company, as well as find your own loads.
  5. Understanding Load Boards – Finding loads is one part of owning that many drivers do not get much experience with until they become owner operators. Thankfully, technology has made this process much easier than in the days when owners had to make phone calls looking for loads. The internet has many websites called load boards which are dedicated to helping owner operators find loads. Some of these boards are free, while others require a monthly membership fee for brokers and carriers. Even more convenient is the fact that many of these job boards have easy-to-use apps that can make grabbing the next load on your smartphone or tablet a breeze.

What You Need to Know About Truck Liability Insurance

Crunch the Numbers and Take the Leap

Taking a look at each step in this process before actually making the step can help you understand the costs of setting up as an owner operator. Make sure you factor in other costs that you will be faced with as the truck owner, so you will have a realistic view of how much money you can actually make. These costs, known as average operating costs are often calculated and called the cost per mile. You should include anticipated costs for fuel, vehicle repairs and necessary services, fees, taxes and a savings account that will help with any unexpected occurrences.

Though the process could take you several months, you will realize who worthwhile the work has been once you begin seeing the earning potential that is available to truck owners. Stop dreaming about being your own boss and take the leap as you change your life, your family life and your career for the better.