At one point in time, nearly every company driver has dreamed of being an owner-operator. The freedom to choose your own routes, set your own schedules (dependent upon jobs taken, of course), drive the truck of your choosing and selecting your own policies and rules (again within reason and regulations.)
Additionally, owner-operators tend to earn between $100-$150k per year (according to truckdriversalary.com) with most falling right around $141k.
If you decide to strike out on your own, here’s a few tips and suggestions to keep in mind:
Have a Business Plan
Being an owner-operator means you are business owner, and every business needs to have a plan. What type of clients are you going to have? How will you find them? What will your radius of operation be? How will these decisions affect your costs and revenue? You will also need to think about advertising, and accounting systems, maintenance programs, and scheduling. Spend as much time as possible thinking through your plan and write it down. It doesn’t have to be perfect, but this will be your guide moving forward, and its meant to be updated as circumstances require.
Know Your Expenses
As an owner-operator all checks are written by you, so know where every dollar is going and when. Maintenance, road use taxes, tolls, fuel taxes, personal/corporate taxes are all things you’ll need to budget and plan for now. Don’t forget to work with your insurance agent; many of the decisions on the type of load and territory you operate in can have a dramatic impact on the cost of insurance as well.
Understand Your Contracts
If you’re not using a leasing agent, you’ll need to obtain your own authority which brings with it its own complexities with the FMCA. Know up front whether you want to be a common carrier or contract carrier and make sure your advertising attracts those types of clients. Each contract type is different and you’ll need to understand the pitfalls in each type.
Know Your Finances
Becoming an owner-operator requires a good deal of up-front cash and good credit. Trying to make it on bad credit and very little cash is a recipe for disaster. Financing a truck is a significant expense and the more cash you have, and the better your credit is, the lower your payments which reduces the stress of needing a certain level of revenue just to cover your truck.
Work With Advisors
You don’t need to be an expert in accounting, legal and insurance. Find good advisors who have experience working in the trucking industry and follow their advice.
We’re specialists in insuring transportation risks and our staff can help you make sure your properly insured and warn you of activities that might not be covered or could affect your premiums. Call us today for a consultation. (800) 833-7234
About Deeley Insurance Group
A leading independent insurance agency with offices in Maryland and Delaware, Deeley Insurance Group is a recognized Best Practices insurance agency and risk management firm. We offer business insurance, employee benefits, personal insurance and life/health insurance. www.ascd.net