Tips to Become a Successful Owner Operator
Updated: Mar 16, 2020
Becoming an owner operator is a huge financial and life decision and cannot be taken lightly. There are several things that you need to consider when transitioning to become an owner operator. Some truck drivers will never work as a company driver as they want their independence of profits and decision making. Some drivers are happy to work as a company driver, or at least start off as one. But whether you're new to the truck driving industry or a veteran in the field, almost all drivers have thought about owning their own truck and being their own boss one day.
Before jumping in head first, there are many factors to consider on how to become a successful owner operator. It is common knowledge that many owner operators fail within their first year because they were not prepared enough. We don't want this to happen to you, so here are some tips to becoming a successful owner operator!
Do you have enough money in the bank to start?
You need to have a lot of money on hand to start out as an owner operator. Afterall, you need a truck and those are a huge expense. It will be your biggest investment, and your first one - so if you don't have the money, you will fail before you even begin. You need to make the decision on if you want to buy a new truck (which will include a stealthy down payment plus monthly payments) or if you want to lease a truck.
You also need to have enough money for other operating costs such as your insurance, truck maintenance, unexpected truck repairs, food on the road etc. Starting out without a solid financial foundation will be a killer, so make sure you don't let this happen.
Do you have a good credit rating?
This isn't always make or break, but it will definitely help you if you have a good credit rating when becoming an owner operator. Many banks or loan agencies will not give you a loan with bad credit and that can be the reason why you can't become an owner operator. Excessive personal debts will also get in the way of your success as an owner operator as you will have more monthly payments than you can afford. Your spending habits determine your success in the trucking industry, and if you don't already have them under control, you need to before becoming an owner operator.
Do you have a business plan?
You must have a business plan in place before starting. This includes:
Getting all licenses and paying fees that need to be paid in order to become an owner operator and haul loads
An overview of your business
- The type of truck you buy
- The type of loads you want to haul
- What states you want to run in
- Personal budget: how much money you will bring home to cover all personal expenses
- Business budget: how much you have for truck payments, insurance & other operating expenses, fuel, permits, truck maintenance etc.
How long your hauls will be
- Are you comfortable being on the road for long periods at a time?
- How long can you be away from home?
- Do you have a stable relationship?
How will you finance your new trucking company?
This is extremely important to figure out before you start your trucking company. Typically, it takes a shipper or broker to pay the carrier in 30, 60 or 90 days for a load. There are so many monthly payments that most drivers find it difficult to wait that long for payments. This is when you need to decide if you are going to work with a factoring company or not. If you decide you want to, a lot of thought needs to go into choosing the best one to work with. Not sure what makes the best freight factoring company? Click here to learn more.
Are you in good health?
You must consider your present health status before making the decision on becoming an owner operator. If you currently have serious healthy issues, or your health is declining, then this line of work isn't for you. Before starting out, get a professional health assessment to avoid missing anything important. Being on the road for long periods of time or not being in reach of medical help can be a major problem to someone who isn't in good health while on the road. The monthly payments don't stop just because you're sick and unable to work. It is extremely important to be prepared with extra money in the bank for sick time.
Do you know where you will find loads?
Obviously, it is impossible to have a trucking company without having loads to haul. Knowing where to find the best loads for you is extremely important in your success. You need to make the decision on if you want to find loads through load boards, work with a dispatcher, or through direct shippers/brokers. Each owner operator has different preferences on where they like to find freight so you need to find the one that works for you. If you have the time and want to find all loads yourself then using a load board is a good option. If you would rather spend more time on the road and less time looking for freight, working with a dispatcher would work great. Building relationships with dispatchers, direct shippers and brokers can also be beneficial in finding good loads. For more information about where to find freight for your company, click here!
A lot more goes into becoming an owner operator than just driving a truck. You need to have patience, a business head, and determination. Just because you're a good and experienced driver, does not mean you'll succeed as an owner operator. Many drivers fail when they make the transition from driver to owner operator because they don't realize how much work goes into being successful. You need to think hard before making the commitment and make sure it is something you absolutely want to do.