Things to Consider before becoming an Owner-Operator
If you are considering becoming an owner-operator of a trucking business, there are a few things to keep in mind.
This is an important decision and should not be taken lightly.
The veterinarian, at some point, dreamed of owning his own big truck and making a lot of money on the road.
Some truck drivers just don’t want to be company drivers.
They want independence, freedom and profit, which are brought about by being an owner-operator, but before becoming an owner-operator and jumping into the money pot, there are many factors that need to be considered and understood.
After all, the main goal is to become a successful owner operator and profit from your trucking business.
Here are the 10 Important tips for becoming a successful owner-operator :-
You will Need a Lot of Money -
Your biggest investment is your truck. It’s best to pay for the craze for financing or leasing your rig.
If you don’t have the money to pay the down payment, everything may be over before it starts. A large down payment will help maintain the team’s payment. Lower and more affordable.
It can also help you get a loan. On the other hand, some experts say that there is almost no down payment when purchasing equipment.
The payout will be higher, but if something goes wrong and you cannot pay, you will not lose the down payment, and hope you can get it back in the platform sale.
Sometimes this works, sometimes it doesn’t work. However, large payments can be devastating.
In the beginning, you also need a lot of cash as working capital: cash is used for out-of-pocket expenses, insurance (if you are an independent truck driver), meals, oil changes, and accidental repairs.
You Need a Good Credit Score -
One mistake that many operators want to have is to enter the trucking business with bad credit or excessive personal debt.
Unfortunately, even with poor credit, there are still many financial companies that can provide you with a new truck.
For these truck drivers, the future is often very bleak. They often lose trucks because their financial situation and consumption habits will never change.
Many operators have credit card systems or use Commdata cards for their owner operators, which is very useful for refueling.
You Need Accounting, Legal and Business Consultants -
Get good advice when deciding to start a business.
Don’t believe your cousin, it takes a lot of money to own and operate your own truck. What works for one person may not work for another.
It is best to leave legal and accounting issues to experts. If you have made the final decision to become an owner-operator, please ensure that you have a firm grasp of your personal financial situation.
A trusted commercial bank contact, that is, an accountant. And legal counsel to help you make key decisions related to business structure, record keeping, income tax returns and various legal affairs… This is essential.
Good Health and Stable Health are Essential -
If you have serious health problems now, it may not be your ability to become a successful owner-operator.
For truck drivers with health problems, being on the road for a long time may be a problem.
If you have a serious medical problem, immediate medical attention may be a problem. It’s a big deal.
Even if you are sick, your team payment is still pending. Make sure you keep enough cash to overcome any unplanned downtime caused by illness. Check out this article to stay healthy as a Full time truck driver.
Independently Owned Operators or Leased to Operators ?
It is best to start leasing to the carrier from the new owner operator.
The carrier is responsible for providing operating authorizations and permits, obtaining insurance (although the owner-operator is often trapped by insurance premiums!), license plates, trailers, and of course, the carrier often provides credit card systems like Commdata for advance cash and fuel purchases.
Buying with a company gas card usually saves a lot of fuel.
Depending on your owner-operator lease, you may be reimbursed for some expenses, such as highway and bridge tolls.
There are benefits to being an owner-operator with its own trucks and trailers, operating agency, and insurance.
It also involves a lot of risks. Slow customer payments are usually the norm in the freight industry. Invoice factoring is a method used by some truck drivers and freight companies to speed up payments.
However, I personally don’t recommend using it for single truck operations.
Freelancers don’t have to deal with ignorant and picky dispatchers, they can really put the life of the owner operator into trouble.
Read More: How to Avoid Trucking Accidents (5 Tips)