10 Tips On Running An Owner Operator Trucking Business Successfully

There are a few things you should think about if you're considering working as an owner operator in the trucking industry.

It's a significant choice that shouldn't be made hastily.

Almost all truck drivers, whether they are experienced professionals or newcomers, have occasionally fantasized about buying their own big rig and traveling the country to earn money.

Some truckers merely don't want to drive for an organization.

They desire the autonomy, liberation, and financial rewards that come with being an owner operator.

But before becoming an owner operator and diving headfirst into the money pit, there are a lot of things to think about.

After all, the ultimate objective is to succeed as an owner operator and make money with your trucking company.

Who is an owner operator?

Let's start with the basics. Owner operators are independent truck drivers who use their own vehicles to operate a trucking company. Using their own trucks, they may also rent out their services.

Owner operator trucking is when an individual is in charge of running their company on a daily basis. Owner operator trucking may serve in both capacities simultaneously.

Owner operator trucking vs. independent contractor 

Owner operator trucking is when an individual is self-employed. But not all independent contractors run their own businesses.

Drivers who sign contracts with carriers do so as independent contractors. Carriers give them operating rights and load guarantees for the duration of the contract.

Owner operator trucking does not come under a contractor. They lease industrial vehicles from the contractual carrier firm rather than buying them. Contractors are not employees, in contrast to company drivers. They do not enjoy the same advantages as company drivers. Independent contractors frequently hand up a share of their profits to the carriers in exchange for the power and ensured hauls.

10 tips on being a successful trucking owner operator

Analyze your personal circumstances

Owner operators and trucking in general are more than just career choices. It's a way of living your life.

Truck drivers may travel for weeks without seeing their friends or families. This makes it a challenging career choice if you have added responsibility to be at home. 

Experience is important, too. Since driving may be a great way to get some road experience without embarking on excessive financial or personal risk, many owner operators begin their journey as company drivers. Keep in mind that you're prepared to handle the responsibilities of operating and managing a business, including bookkeeping and regulatory compliance that come with it.

Plan ahead

Prior to becoming a trucking owner operator, writing a trucking business plan will help you concentrate on your resources, define your objectives, and establish a long-term strategy for your trucking business. You can find business plan templates online, however, a good business plan should have the following components:

1. A description of your company
2. A breakdown of the services you'll offer
3. Your target customers
4. What sets you apart from the competitors?
5. Your expertise
6. Future financial projections

Acquire MC and DOC

You must have the USDOT and MC numbers in order to work as a trucking owner operator legally. The next step for someone who already has a U.S. Department of Transportation number is to obtain an MC number.

Trucking is a highly regulated sector. Your ability to make the move from truck driver to owner-operator may depend on your ability to follow road laws.

The FMCSA put into effect the ELD mandate in December 2017. Non-exempt CMVs must install FMCSA-registered electronic logging devices, according to federal regulation.

Get the right insurance coverage

Additionally, having comprehensive health and truck insurance is a prerequisite for working in the trucking industry. To learn more about the specifics of the insurance you require, visit the FMCSA insurance page.

Whether you opt to lease a truck or do it by yourself, the kind of insurance coverage you require will depend on it. Remember that the insurance typically has a narrower scope of coverage even if you decide to lease to a motor carrier.

Typically, only primary liability is covered. You could, therefore require additional protection that includes:

• Physical Damage Protection: Covers the expense of any damage done to the truck in the event of a crash.
• Non-Trucking Liability Insurance: If the driver isn't already working directly for the motor carrier, this insurance will protect them.
• Lease Gap Insurance: Protects you in the case that the value of a totaled truck is less than the balance outstanding on the lease.
• Cargo Coverage for Motortrucks: Protects the things you're transporting in the event of theft or damage.

You can choose from a selection of insurance plans because different motor carriers will provide a range of coverages.

Evaluate your finances

Starting your own business as a trucking owner operator demands personal investment, which can involve taking on more debt. Consider your financial condition before purchasing or leasing a truck.

Before striking out on your own, amass emergency cash if your family relies on your owner-operator revenue. This provides a safety net in case of sluggish months or a delay in receiving regular shipments.

Create a spreadsheet with all of your financial data to determine how much money you'll need to earn each month to cover your costs. Use low estimates to stay on the safe side when estimating how much you can make. This should help you estimate how many resources you'll need to put in to successfully run your firm.

Seek accounting, legal & strategic assistance

When deciding whether to start a business, seek some wise counsel. Just don't believe what your aunt said about running your own owner operator trucking business.

What may work for one person, may not work for another. It is best to leave accounting and legal matters to professionals.

Make sure you have a strong understanding of your financial affairs before deciding to become an owner operator.

Having a trustworthy commercial bank contact, auditor, and legal practitioner by your side can also be beneficial when making important choices regarding your company's organizational structure, bookkeeping, tax returns, and other legal matters.

Decide on leasing or being an independent owner-operator

It is better for a new owner-operator to begin leasing through carriers.

Although a trucking owner operator frequently ends up paying the insurance rates, the carrier is responsible for obtaining operating licenses and permits, coverage, license plates, trucks, and of course, the merchandise.

Carriers frequently offer credit card systems for buying gas and money transfers.

Additionally, using a work gas card often results in considerable gas savings. Depending on the terms of your owner-operator lease, you might be compensated for some costs, such as tolls on the way.

Having your own truck and trailer, operating license, insurance, and independence as an owner-operator have significant benefits.

However, there is also a great deal of risk.

In the trucking industry, slow consumer payment is frequently the norm. Some truckers and trucking companies utilize invoice factoring as a means of accelerating payment.

It's ideal to start out leased for independents as they won't have to deal with picky dispatchers. 

Carefully examine the trucking company you want to work with

Working for a reputable company is crucial. Choose a carrier that has owner-operators with a longer history of working with them. It indicates that the money has been sufficient to support them over the long term, which is what you desire.

Choose a carrier that doesn't use forced dispatch. Because you declined a load, you don't want to lose that load or your job.

Forced dispatch denotes the requirement to dispatch a driver for bad loads.

Put your health first

To keep owner operator truck business running, you must look after yourself. Since you are an independent contractor, you won't take a vacation or sick days, so any time you are away from your job is time you aren't earning money.

While traveling, prepare nutritious meals and engage in frequent exercise. When necessary, take breaks, and schedule time off to spend with your loved ones.

Long periods of travel might be lonely at times as well. Pay attention to your mental health, and if you're not feeling well, don't be afraid to ask your doctor for assistance.

Practice patience

Owner-operator jobs take a lot of time, effort, patience, and hard labor. But it is possible if you prepare well and make wise choices.

Even in this uncertain business situation, an owner-operator profession can be lucrative and fulfilling.

What are your thoughts on owner operators?

You already know that switching to an owner-operator truck business is a major move.

You've ideally done thorough research to prep yourself for everything from buying your first truck to getting a license, looking for work, switching to being an independent contractor, and adopting all the new obligations.

Being a first-time owner-operator and having a huge rig is thrilling, but it also comes with challenges and opportunities.

The most prosperous owner-operators in the trucking industry didn't get to where they are by accident. The reason these drivers are successful is due to what they do on a daily basis with their hard work.

 

---