Becoming an Owner-Operator. Are you Ready?
So, you’re thinking to yourself, ‘maybe I should become an owner-operator.’ It’s actually a good time to look at it…freight rates are high and there is demand for drivers. If you want a good paying load, they’re out there.
A recent story in Heavy Duty Trucking talked about the flatbed market being especially hot. In May, loads were averaging $2.65 per mile – 58 cents per mile higher than in April 2017. Not bad!
The idea of driving on your own terms sounds pretty great, right?
- Make more money
- Create your schedule
- Select what carrier(s) you want to drive for
- Control when you take time off
That might get you excited, but like in any industry, starting a business is not easy. It takes a dedicated person to put in the time, effort and money to create a successful business.
Drivers need to take a step back and recognize the risks involved and the steps needed to ensure the success of the company. Although it takes a lot of work, there may not be a better time to become your own boss than now.
Driver demands continue to grow as well as net income for independent contractors. And the great news, according to ATBS.com, income increases, and driver demand will continue to rise.
Ready to make the leap? Here’s some things to think about to prepare yourself for life as an owner-operator.
- How long have you been driving for? Experience on the road is key and it will help you understand the industry.
- Follow a successful owner-operator. Take notes of what they are doing and ask questions about their operation.
- Check out what the market is doing and see if you can point out any trends. You don’t have to be a stock broker to pick out what industries are experiencing an upward trend.
- Check load boards to see what freight is consistently available and compare it to the market trends. Doing some research on what freight to haul will be important for creating a successful business.
A big step towards starting a company is getting finances in check…along with a good credit rating. You should also…
- Have a good accountant
- Little to no debt
- Money in savings
You’ll need money to pay for the unexpected. A blown tire is not cheap – but it is compared to an engine or transmission repair.
Now, what truck are you going to operate? An owner-operator has to determine whether or not to outright purchase a truck (new or used). Or enter a lease/purchase plan with a carrier. It’s a big decision, as it can influence costs down the road. Buying a brand-new truck can save a lot of money in the long run. Buying a used truck may mean repairs in the near future. With new trucks, you can buy extended warranties for added safeguards. But, used trucks can be quality too – especially if they’re certified and have warranty left. You’ll have to do some homework to see what works best in your operation.
An online chat room on reddit.com offers a lot of good advice for drivers. Especially those with dreams on becoming an owner-operator.
After buying a new truck, one driver in the chatroom said he is saving a lot of money compared to the used truck he was running.
That same driver suggested that those interested in becoming owner-operators — and can’t afford a new truck – should look into lease-purchase plans with reputable carriers. It’s another way to get into a truck…but read the contract carefully and know who you’re dealing with.
When determining what freight to haul, it’s important to browse load boards or work with a broker to find work. Companies that hire owner-operators can also serve as a broker. By aligning market trends and what hauls are popular, an owner-operator can find the right match and maximize revenue. If you hire on with a carrier – do your homework. Find the right match for you…ask other drivers what they think of the company. Reputation says a lot.
With the added risks of being an owner-operator, it’s important to keep fixed costs in mind. And, one thing is certain — money isn’t coming in if the truck isn’t moving. Everyone needs a break now and then, but it’s important to strategically plan “when” to take those breaks. Generally, the beginning of a quarter tends to be slower (less pay) than the end of quarter according to ATBS.com.
On the road, the more you can do to effectively schedule your route, the more money you make. Efficient planning can may a big difference in maximizing your pay per mile. By delivering freight to a location that has a ready load for the return trip, you’re ahead of the game.
In an industry that is in dire need of drivers, now is great time to consider becoming an owner-operator. The rewards are there for drivers willing to take on added responsibility and risk.
So, are you ready to make the leap to becoming an owner-operator? If so, be like a Boy Scout. Be prepared. As an added resource, check out these great tips to help prepare yourself for life as a business owner.