Owner operator truck drivers earn a substantially higher gross income each year. Is the extra work worth the extra income? What is involved in being an owner-operator truck driver? These questions and more will be answered.
Drivers that are owner and operator have an added workload but also receive an additional payload. There are several steps to taking this leap into truck ownership. Some of the steps you may have already completed and other actions you might need to evaluate and decide. Let us get right into the steps to becoming an owner-operator truck driver.
1. Make A Self-evaluation
This is an essential start in the process of becoming an owner-operator. Essentially you will be starting your own trucking business. So you must be well aware of the road regulations, the insurances required, and commercial driver’s license (CDL) regulations.
It would be advisable to make a list of all the costs of operating your big rig. Some things on the list might include.
- Truck Payment
- Health and Truck Insurance Payment
- Startup Fuel Allotment
- Commercial Driver’s License fees
- Start-up cash for initial truck maintenance
Add any additional expenses that you are aware of, then total the amount and add 10% for good measure. Have money to prepay for your fuel and maintenance will take the pressure off if you have mechanical issues in the beginning. There is no use in starting a new venture behind and always playing catch up. If you need a little more cash to start, it is better to wait and drive a truck for someone else for a few more months then put an undue burden on your family.
The next consideration is your personality and the amount of drive and patience you have. Owning your trucking business requires that you can meet with brokers, close deals, and show patience when things do not go as planned. It is also necessary to keep good records or have a bookkeeper. Record keeping can make or break your business.
Once you have done a self-examination and a financial examination if you feel you are ready. Then move to the next step.
2. Getting the Business Started
Before you can have your own trucking business, you must have some legal documents and numbers in place. These are a few of the authorized license and devices you must obtain.
- Commercial Driver’s License (CDL)
- United States Department of Transportation (USDOT) number
- Motor Carrier (MC) number
- Electronic Logging Device as required by Federal Motor Carrier Saftey Administration (FMCSA)
It is also advisable to meet with a tax consultant to fix in your mind what is tax-deductible. A licensed accountant can also give you tax strategies so that you can make wise decisions from the starting of your new business.
3. Keep Expenses to a Minimum
It is not necessarily how much you make that puts more money in your bank account. You can make less and have more money if you spend what you have wisely. This would allow your family to have more money with you being home more. It is a win-win situation.
So how do you spend less while on the road? Conserve where you can. Here are a few conservation suggestions.
- Conserve fuel by driving the speed limit, use good driving habits, and do not spend a lot of time idling.
- Go to the grocery store and stock up on snacks and food instead of purchasing at truck stops.
- Budget monthly maintenance for the truck and keep ahead of the maintenance. Do not wait until the truck is broken.
- Call several insurance companies and compare prices and coverage before choosing an insurance company.
4. Choose Your Truck Wisely
Purchasing a big rig is a huge purchase. So do your homework before you buy. Make sure to compare banks and financing options before you go to the dealership and look at trucks. By calling your local bank or credit union, you will know if the dealership is giving you a good interest rate for your purchase.
However, it might not be best to allow several banks to pull your credit score. This can, in some cases, can lower your score for a time. So call the bank and give them the ballpark number of your credit score. Ask them the tell you the interest rate and what there terms and conditions are for purchasing an 18-wheeler through their institution.Do not buy the first truck you see. Learn the market and what trucks are worth. This is an investment and a tool for your trade. The longer the functions without incident, the better the investment, and the more money will stay in your bank account.
Have a sizeable down payment to put down on the truck. The downpayment can affect your interest rate. Your deposit tells the bank how vested you are in your business. The more committed you are, the more likely they will be to work with you and even give you a better interest rate.
5. Running a Successful Trucking Operation
Owning a trucking operation means that you are no longer a truck driver. You are now an owner-operator. Notice that the title owner comes first. This is because, as an owner, the way you run your business will determine if you continue to be an operator of your truck.
Successful trucking owners plan ahead. For you to be successful, you will need to network with other owner-operators. You will also have to plan out your routes ahead of time and make the most of your time and money. Routinely check your truck for maintenance items and perform the needed maintenance.
Protect yourself in case of an accident with a dash and rearview camera. Comply with the rules and regulations to save yourself hefty fines. It would be hard on your family to have to work a few months a year just to pay off fines.
The Income of an Owner Operator
According to Indeed, “the average salary for an owner-operator driver is $226,224 per year in the United States”. That is the net salary amount after expenses. It is evident that owner-operator drivers make considerably more money per year. Keep in mind that with more money comes more planning, accountability, and expectations if you are up for the challenge and in the right financial position. An owner operator driving position is waiting for you.