The industry has made it way too easy to move from being an employee driver to owning a truck. Far too many drivers give no real thought as to what it means. List the top three reasons you want to be an owner-operator. No. 1 usually is to make more money. Then it’s more freedom, less hassle, fewer rules, etc. If your answers sound like these, think again before you proceed.
The top reasons for getting into business should be the challenge of accomplishing the work, starting a new venture that will give you the opportunity to make more money and create a better life for your family, and the opportunity to build a business model that allows you to make more of the choices that affect your life. If one of your top reasons was that you are confident you can own and operate the truck better than anyone else and create a value proposition for your customers through hard work and smart choices, then you are on the right path. Answer these questions before you take the leap.
You already know that when the truck is down, you’re not getting paid. But when you own the truck, it’s worse because you also have fixed expenses to cover. When you are a company driver, you have the freedom to live your own life once the key is out of the ignition. When you own the business, the paperwork and other responsibilities never go away. As a company driver paid by the mile, you don’t care about the freight rate in any given area or lane, but when you own the truck, you do.
Are you willing to work more hours?
In the beginning, you will need to drive 70 hours a week and spend extra hours behind the scenes to keep the business running by owner operator pay. You’ll also need to continue your professional training in order to grow the business. But with proper planning, much of the additional work can be accomplished while you’re on the road without taking hours away from your home time.
How does your spouse feel about this venture?
There are going to be tough times and hard decisions to make, and nothing will sabotage this venture faster than fighting about it with your spouse. Such disagreement can make every day miserable, but teamwork can make it a wonderful adventure that strengthens your relationship.
Start saving money out of each paycheck so you’ll have a down-payment on your vehicle. Most people need to finance at least a part of the investment, which means potential lenders will be examining your credit history. The better your credit rating, the better your chances of getting a low-interest loan. As you plan for the future, keep your debt load manageable, pay your bills on time and keep creditors from filing judgments against you.
Many owner-operators choose to lease their semi-truck and other equipment instead of buying it directly. Leasing a tractor is like leasing a car or an apartment – you only pay for the property during the time you need to use it. Leasing might allow you to upgrade your equipment more often and get better equipment with less money up-front. There are tax and operating advantages to both leasing and buying – that’s the kind of decision an accountant or another experienced owner-operator can help you make.
Owner-operators buy their own equipment and hire out their services to customers. As an owner-operator, you are your own boss and you can pick your own jobs. The owner-operator is a manager, salesman, accountant and driver all rolled into one. Although many people enjoy the freedom of this job, successful self-employment requires self-discipline, determination and drive. Owner-operators buy their own equipment and hire out their services to customers. As an owner-operator, you are your own boss and you can pick your own jobs. The owner-operator is a manager, salesman, accountant and driver all rolled into one. Although many people enjoy the freedom of this job, successful self-employment requires self-discipline, determination and drive.
The great lure of self-employment is the idea that you won’t be out there making money for someone else. Every penny you earn is yours, and you can decide how to spend it. Many people think they will never again have a boss, and they can finally say and do whatever they want. To a certain extent, that’s true. You can schedule your loads however you like. You can develop your client base around the type of work you like to do. For example, if you really like hauling gravel, then you can specialize in gravel and carry nothing else. If you find a customer you just can’t tolerate, you can simply choose not to work with them anymore.
When choosing a company to work for as an owner-operator, be sure you understand the work arrangement before you sign on. There are a handful of companies out there who make it extremely hard for their owner-operators to succeed. For example, an employer might require you to lease a truck from their fleet, and they might give you an older truck in terrible condition. Then you will be responsible for maintaining it, and while it is being repaired, you will not be driving or earning money. The Owner-Operator Independent Drivers Association does not recommend leasing equipment from your employer. When you lease through a third-party equipment provider, you can work for different freight companies to balance your workload.
The term “forced dispatch” means that, even as an owner operator, if you get a call from a dispatcher requesting you to pick up a load, you have to pick it up. Even if it’s your son’s birthday party and you promised to spend the weekend at home, turning down a forced dispatch load would mean your stock would drop to nearly nothing at the freight company, and you may spend the next few weeks waiting for a decent load. Although drivers do better when they are flexible and eager to work, you should steer clear of forced-dispatch employers.