A Truck of Your Own: How to Become an Owner-Operator

Reasons to Become an Owner-Operator

There are many reasons to become an owner-operator. Having your own truck puts you in the driver’s seat, so to speak. You are in control of what loads you carry, where you go, what money you will take. It gives you the freedom to drive your truck the way you want.

Being an owner-operator also allows you to earn more money. Many owner-operators earn up to $100,000 a year or more. You own the truck, you run the business, meaning more of the money goes into your pocket.

With the increased freedom and power of being an owner-operator you also have more responsibility. While on the one hand it feels good to be able to choose which loads you want to carry, where you want to go, what offers you will take, you also have the responsibility of choosing which loads you will carry, where you will go, what offers you will take. You don’t have your instructions handed to you by your carrier: you are the carrier.

You will also be responsible for your truck, its maintenance, upkeep, repairs, etc. You are not only receiving more of the earnings you are taking on more of the cost. While being an owner-operator gives you the opportunity to take your trucking business farther than you ever could working for a major carrier, it requires a lot of hard work and business smarts.

Buying a Truck

In order to become an owner-operator the most important thing you need is of course a truck. If you don’t own a truck you can’t be an owner-operator. It will also be your highest cost when you are first becoming an owner-operator.

Applying for a loan for a truck is very important. If you happen to have enough money to buy a truck outright, then all the better, although that can be a difficult sum of money to raise. When you apply for the loan for your truck you will want to make sure that you know what you are doing, and have a plan for what you are going to do with your truck.

Choosing your truck is very important. While buying used might be a cheaper option, you will want to thoroughly research the vehicle before purchase. Many new owner-operators who buy used find that their vehicle soon has problems that they did not recognize when making the purchase, and paying for repairs might end up being more expensive than buying a new truck in the first place.

Lease-Purchase Options

For many people just starting and looking to buy their own truck a lease-purchase option might seem like a good deal. It is definitely much cheaper, at least to start out, and many of the up-front costs are put to a minimum. But you also have to look at the realities of buying a truck on a lease-purchase option.

Generally when you acquire a truck through a lease-purchase option control of the truck remains with the carrier leasing you the truck. After all it is there truck, at least until you have finished off your lease payment and the purchase is complete. You will find that when you use a lease-purchase option many of the freedoms you thought you would find when you became an owner-operator are not there. The truck is not truly yours, and you are finding yourself working for a carrier and being forced to haul the loads that they want you to haul. After all it is their truck and not yours.

While using a lease-purchase option is not always bad, it is something to definitely take under serious consideration before jumping in headfirst. Look at all of your options. If you find that you cannot purchase a truck on your own at the moment, perhaps it would be better to wait, save up your money to buy your own rather than going with a lease-purchase option.

Other Expenses In Being an Owner-Operator

There are many other expenses involved with being an owner-operator. Besides just purchasing the truck you are going to need to have cash on hand to pay for many of these expenses, at least for the first six months or even more. Some of these expenses are obvious, such as fuel. With the price of fuel going up these days this can be a major expense. Many carriers have fuel surcharges which are paid by the companies which they haul for. This is one way to keep this expense to a minimum, although it can sometimes be difficult for a new owner-operator to swing.

You will also have to pay for repairs and maintenance on your vehicle. For example just paying for tires for your truck can cost you as much as $3,200 or more in a year. If your truck breaks down, you will have to pay to fix it. Making sure you have a fund to pay for maintenance and repairs is a must.

Insurance will also be important. As an owner-operator you must purchase your own insurance for your vehicle, no one is there to cover this expense for you. Insurance can be very expensive if you do not work with the right people.

As a small business owner you are also in control of things such as health insurance for yourself and your family. Because you no longer have an employer who will offer these sorts of benefits as an owner-operator, you will have to go out and find these things for yourself. Make sure you are ready to take on these sorts of expenses as well.

Here is a quick breakdown of things you should have, or at least looked into thoroughly before purchasing a truck and starting your business as an owner-operator:

Funds for purchase of truck (down payment for a new truck, full payment for a used)

Money to pay for fuel and maintenance on truck as your starting out

Emergency Fund to pay for unexpected repairs

Insurance Carrier (although you cannot purchase insurance until you purchase the truck, you should
research insurance carriers and find the one you think will be best both in terms of coverage and expense for your new business)

A Good Mechanic (As owner-operator of your own truck you will need to make sure your truck is well taken care of. Knowing and having a good relationship with a mechanic you can trust is a must)

Finding Jobs as an Owner-Operator

No matter how well you know the roads and the routes, how well you know your truck, how fast and reliable of a driver you are, it will do you no good if you are not able to find jobs on a regular basis. Remember being a good driver does not necessarily mean being able to find jobs. This is where the business of being an owner-operator really comes into play.

Make as many contacts in the business as you can. Get your name out there. Let people know that you are the owner of a new truck and looking for work. Marketing is an essential part of any business, and being an owner-operator is no different.

Trucking magazines and the internet can be valuable tools for finding yourself jobs as an owner-operator. Many web sites on the internet serve as job boards just for owner-operators and allow you to look for and find the jobs that you want. If you are just starting out this might be a good way for you to get yourself out there and begin picking up jobs. As you take on more jobs and haul more loads it will become easier for you to find jobs.

Summary

Becoming an owner-operator can be a great way to take your career to a new level. To become a master of your own destiny as owner of your own truck and runner of your own business. But it is a very big step, and before you start off to become an owner-operator you will want to make sure that you know what you are doing and are ready for what comes. Good planning and being ready for the worst are key in beginning a successful owner-operator business.