Making the leap from fleet driver or employed driver to working for yourself as an owner operator is both exciting and also more than a bit frightening for most people. The biggest concern for all new owner operators is how viable their small trucking business will be considering the economy, the competition, and the reality of having to run a business.
There are several things that any person thinking about becoming an owner operator has to know before getting started in this very rewarding career opportunity. By understanding these important business and trucking principles the chances for success increase while jumping in without this understanding definitely decreases your chance for survival in the industry.
Some of the knowledge that is required can be obtained relatively easily while you may have to do some research and talk to some experienced owner operators to get the rest. The good news is that most owner operators are very willing to help out and there are several associations and organizations available online for owner operators that provide calculators, tools and informative articles to help you get started. Before making the transition from driver to owner operator take some time and get answers to the following questions.
In addition you will need to consider software and perhaps hardware in the form of computers, laptops, smartphones or tablets to allow you to run your business from anywhere and access the information that you need. Other expenses can include general business startup costs such as office furniture, building lease, full or part-time office staff as well as possibility hiring another driver to help you with long hauls. Upgrading the cab of your truck for over the road trips may also be a cost depending on the type of rig that you buy or lease.
What is my cost of being on the road?
Once you know what it costs to get up and running you then also have to calculate the ongoing costs of being on the road. The biggest of these for most truckers is going to be fuel costs, which you will have to cover to get the load to the end destination to get paid.
In addition you will have other types of insurance, toll fees, accommodation and food on the road, routine maintenance, emergency repairs and a range of incidental types of fees and costs. Many people starting their trucking company fail to realize that the loan that they thought was enough to cover the start-up of the company doesn’t stretch to allow them to actually get started hauling and bringing in an income. You need to have a reserve for emergency repairs and unforeseen lags in work to cover your loan payment and still give you enough to keep operating.
What is my competition for the loads I want to haul?
Generalized or specialized, you need to know who you are competing against in your market and be able to provide a better service. A better service may include better quality customer service, lower rates or some other feature that is of value to the customer. Offering just what the established truckers are offering is not incentive for a potential customer to switch from a proven, experienced trucker to a new company with limited or no reputation.
What is the going rate and what can I charge and still make money?
Too often the technique that new owner operator trucking offer to customers to build up a clientele is to offer low rates on hauling loads. This may seem like a good option and it will bring in customers, the problem it is not sustainable. You have to be able to cover all your expenses and also make a living; just paying the loan and having enough left over to keep your truck on the road is not making you any money.
How much time do I want to be on the road and how flexible am I with this?
Being an owner operator means being flexible and ready to go when the loads are available. However, there is more to life than driving a truck and your family and health can really suffer if you don’t set boundaries and limits. Being flexible with your work also means booking time off and staying rested, healthy and actively involved with your kids and spouse. Being an owner operator is a great career and one that is lucrative for hundreds of thousands of truckers across the United States. Being wise, planning ahead and knowing where you need to be to make money is a key part to making your new business a thriving success for years to come.