It’s common in the trucking industry for company drivers to become owner-operator drivers who can be in business for themselves. However, while everyone wants to be their own boss, everyone won’t always manage the transition successfully.
Operating your own trucking company can be rewarding, but it is also a challenge. It isn’t easy, but it’s not impossible. So here are nine things you can do to become a successful trucking owner-operator.
1. Have Enough Start-up Funds
If you’re planning to become an owner-operator, you need to have a healthy bank account loaded up with start-up funds. It’s crucial you don’t go into your new business without anything in reserve. The payouts are great, and the earning potential is there. Most owner-operators will say it takes around $10,000-$20,000 to start a company with one or two trucks. The cost varies depending on your down-payment price.
Aside from your savings or loans, some small business and trucking-specific grants are available from the government that you may qualify for.
2. Don’t Overpay (or Underpay) for Your Equipment
Your truck will be your livelihood, so you must choose a reliable, affordable truck. You want a new truck that looks flashy, loaded with bells and whistles, and has a giant 6×6 box on the roof. You don’t need that truck. That could become an expense.
While you don’t want to break the bank, you don’t want to skimp when it comes to your equipment, either. When buying a pre-owned, look for something well-maintained and from a reputable manufacturer. Check the mileage, view the maintenance and repair history, check the tires, and look for any visible damage or wear and tear. Be sure to weigh your options carefully because you don’t want to end up with a vehicle that will frequently fail inspections or need repairs.
3. Get the Proper Paperwork
After you purchase your truck, you’ll have to get the proper certification, like a USDOT, motor carrier numbers, and a CDL. These things ensure that you are legally allowed to haul freight, and you don’t want to be caught on the roads without them. And yes, some of it will eat up those start-up funds. These may include:
- MC Authority application fee= $300
- Unified Carrier Registration for interstate commerce fee= varies
- International Registration Plan (IRP) Tag= $1,500-$2,000
- Heavy Use Tax for trucks 55,000+lbs= $550
- Insurance= $3,000-$12,000
Be sure to check what applies to you to remain compliant with regulations from the Federal Motor Carrier Safety Administration (FMCSA) and keep your trucks moving.
4. Get Good Insurance Coverage
As an owner-operator, it’s crucial to have a good insurance policy to protect you and your goods while on the road. Add business owners’ coverage. This will protect your personal assets in the event your business collapses.
Required forms of insurance include auto liability, auto physical damage, cargo, and general liability, but it’s always better to go above the minimum for added peace of mind.
5. Build a Brand People Trust
When you’re an owner-operator, your biggest competitor isn’t your fellow drivers but rather your own reputation. This is why you need to build a recognizable brand with your customers. In order to be sustainable and maintain profits, you’ll want to attract a diverse client base who’ll want to come to you with loads. Start thinking about who you want to become and what you want your trucking company to represent. Who do you want to become associated with? Who do you want to attract to your brand? Have you even got a logo? A logo is a great place to start to stand out from the crowd. This will help potential customers quickly identify your company among the rest.
But branding goes beyond a logo, it encompasses the overall experience your customers will come to expect from you as an owner-operator. Whether your brand is a no-frills hometown hero or a high-tech superpower, always deliver professional, prompt, and quality service. That’s what people will really remember.
6. Use Smart Technology in your Fleet
The freight world is changing rapidly with a push towards tech, and you’ll need to adapt to stay relevant. Using technology in your fleet can help you manage everything better. For example, you can use a GPS tracking device in your truck to help you track your miles and automatically calculate fuel expenses. Real-time routing software can cut down on idling, which eats into fuel–a major cost for a fleet. As you grow, you can use a fleet management system to help you stay on top of everything from workers to scheduling. Digital freight factoring services may also be something to consider.
Proper management is essential to maintain compliance, maintenance schedules, driver safety, and fuel management. Leveraging technology in this way can maximize efficiency and make your company more competitive.
7. Take Care of Your Mental and Physical Health
Owning and operating a small trucking company can be a physically and mentally demanding job. Not getting enough rest, unhealthy eating, and isolation all fuel burnout. Not only that, it can lead to safety issues, leave you vulnerable to accidents, and potentially destroy your small business.
The owner-operator lifestyle isn’t easy to maintain. It’s a very independent lifestyle and has its rewards for sure, but if you don’t have stable health and strong, supportive relationships that can withstand the demands of the job, you may get all of those things on track first.
8. Plan Your Routes Carefully
Being meticulous in planning your routes can save you a lot of hardship and money. The routes you take are everything. Again, technology can help manage this aspect of the job and may be the best place to invest. Route optimization software can make your hauls more efficient. Here you can enter factors like your vehicle type, mandated break times, and more to help you find the perfect route and fuel stops.
Truck routing is crucial because it will help you cut transportation, fuel, and maintenance costs while boosting revenue because you’ll be more efficient and productive.
9. Manage your Finances Wisely
Strict money management is a must. Early on, you may be bringing in a few thousand dollars a month, so it’s much harder for you to manage your business’s finances and stay afloat. Consider expenditures like tax payments, maintenance and repairs, fuel, insurance, and savings.
Waiting around for your money can slow you down, so looking into a factoring company may be useful to get paid for your deliveries a lot faster. This is where you sell your invoices to a third-party company that takes a small fee off the top and deposits your payment immediately. With your money in your pocket, you can get back to work while the factoring company waits for the standard 30-90 days the broker takes to pay.
BasicBlock is a popular invoice factoring choice for owner-operators because they only charge 2% with no hidden fees and same-day payments to help you keep a seamless cash flow. BasicBlock also has integrated fuel cards accepted at all gas stations so that you can take advantage of cheaper fueling places.