A year ago a friend of mine quit his company driver job at a well-known trucking company to become an owner operator. At the time, I thought he was crazy! He was giving up a stable paycheck, a guaranteed run, benefits, and more to follow his dream of becoming an entrepreneur. Little did I know, he put a lot of planning and research behind his decision which ultimately helped him become the successful owner operator he is today. Over the weekend he shared his top 5 tips for things to consider before becoming an owner operator with me.
Before Becoming an Owner Operator
1. Give It a Try First
A lot of people think that becoming an owner operator is easy…wrong, very wrong. Being your own boss is a lot of work…and it’s definitely not as easy as some people make it look. Before you decide to quit your current job, give operating as an owner operator a try by tracking your current tips, costs, and time.
- Track your trips including miles, loads, pickups, drop-offs, etc.
- Track costs associated with your truck including gas, maintenance, fines, insurance, etc.
- Track your time by estimating how much time you’d need to put into driving, maintaining your truck, back-office administration, building relationships, securing loads, etc.
Do this for a few months and tally up what’s involved in operating solo. Take a look at your personal finances to see if you’d be able to cover these costs on your own. If not, you might need to keep saving before making the switch.
2. Get Your Finances In Order
The financial burden of becoming an owner operator isn’t something that should be overlooked. Getting started as an owner operator requires thousands (upon thousands) of dollars before you even hit the road!
You need to purchase a truck, get insurance, hire people to help you run your business, cover all repair costs, and much more. It is vital to your success to ensure you’re able to financially support this career choice.
- Don’t go into this with excessive debt
Being in debt is pretty common these days. Most people carry credit card debt, personal loans, mortgages, etc. Before becoming an owner operator, try to reduce your debt as much as possible. The more debt you’re carrying, the bigger the impact on your credit score and ability to secure a business loan in the future (if needed).
- Set up a budget
It’s surprising how many people don’t budget. When you run your own business, this is no longer an option. Get a handle on how much money is going out (expenses) and what you’re bringing in (income). Ensure you’re operating at a profit (more money coming in) or you’re not going to survive very long.
- Start Saving
Make sure you’re putting money away every month. You’ll want to save personally and for your business. For the business, map out potential future purchases and repairs, give it a dollar value, and make that a goal. Personally, you’ll want to put aside money incase you get sick or injured. Start looking at insurance options to ease this cost.
3. Plan Your Spend on Equipment
Everyone wants that brand new Kenworth truck…but can you afford it? Low financing rates are appealing but remember you do actually have to pay for it and have money left over to fix it if something happens!
You don’t want to spread yourself too thin when purchasing your first truck. Many owner operators recommend a purchasing cycle: buy an older truck, pay it off, sell it then buy a slightly new truck, pay it off, sell it, etc. They’ll keep doing this until they get the truck they really want. It’s a great way to budget and build some equity (rather than put yourself in debt).
Once you get your first truck – take pride in it! You’re going to want to make maintenance a priority. Do regular oil changes, fluid flushes, and preventative maintenance. These little steps along the way can save you a big repair bill down the road!
4. Get Professional Advice
You’re a driver – you might even be one of the best drivers out there – but you’re not an accountant, an office manager, or lawyer. No one can do everything. Make sure you get some professional advice and help along the way to set yourself up for success. This is especially important when starting out on your own.
5. Determine If This Lifestyle is the Right Fit for You
Becoming an owner operator is a lifestyle change. Do an assessment on your lifestyle to make sure that becoming an owner operator is a fit. Start by asking yourself these questions:
- Home: Do you need to be home every night? Every weekend?
- Family/Relationship: Is being away from your family for longer periods of time going to be an issue? Are you okay with missing special events in order to maximize your work schedule? Is child custody/visitation going to be an issue? Do you need to be flexible to accommodate childcare?
- Health: Do you have any major health issues/concerns? Do you need extensive medical insurance? Do you foresee a health issue causing you to miss work?
- Finances: Are you able to survive for a few months with little to no income? Do you have money to invest in your business?
- Business: Do you know what your business goals are? Is this a short-term thing?
The owner operator lifestyle isn’t for everyone. You have to make sacrifices, changes, adapt to challenges, and adopt the lifestyle. For those who can make it work, love it! Make sure you plan and prepare to set yourself up for success.
Many owner operators have chosen to work with BigRoad because of our easy to use and affordable solutions. Get started by downloading the BigRoad Mobile App to your phone or tablet to create your driver logs and track your hours of service – for FREE!