Becoming a successful owner-operator is a rewarding career, but not without its challenges. For those with the drive, it’s important to know what it takes to meet the unique demands of owner-operators. Do you have the skills and drive to become your own business owner? Here’s what you need to get started on your new career.
What Is an Owner-Operator?
An owner-operator is a trucker who owns his own business rather than working for a specific company. An owner-operator may own or lease a single truck or a fleet of trucks with employees of their own. Many partner with logistics organizations to help them secure customers and manage their business.
Becoming a Successful Owner-Operator
Some owner-operators begin as company drivers before going independent. Others begin their career as owner-operator, often from a related industry. Depending on your background, you may have already met some of the steps below.
1. Assess Your Situation and Goals
What are your goals for becoming an owner-operator? Do you want to be a local/regional driver or an OTR trucker? What are your family and financial needs? As with any business, becoming an owner-operator requires an investment of time, skill, and money. It’s important to ensure you’re in a position to begin your own business and take on the expenses and responsibilities of an owner-operator.
You should create a business plan at this time as well, including:
- Executive summary
- Company overview
- Marketing plan
- Goals and milestones
- List of staff (if any)
- Financial plan
2. Obtain Your License and Registration
If you’ve driven as a company driver, you likely already have your commercial driver’s license. If not, you’ll need one to be an owner-operator. You will also need to register your business with the Federal Motor Carrier Safety Administration (FMSCA) and with your state and/or local government. The Small Business Administration offers resources to help you decide on the best business structure for your needs (LLC, DBA, etc). Once you establish your business, you can apply for your USDOT number and your MC (motor carrier) number.
3. Get Insurance
As an owner-operator, FMCSA requires that you carry liability coverage. Requirements vary by the type of cargo you carry and companies may require more depending on their specific needs, so it’s important to research the types of businesses you want to work with and partner with a reliable logistics company.
You should also consider additional insurance to cover freight as well as healthcare for yourself and any employees you plan to hire.
4. Obtain Your Truck
Should you buy your truck or lease instead? Each option has its advantages. Leasing a vehicle is less expensive up front, but you won’t own your vehicle or build equity. Buying, on the other hand, may require a down payment but will save you money over time as you pay off the purchase loan rather than paying in perpetuity. Before you decide, consider asking yourself,
- How long will I keep the vehicle?
- Do financing options match my budget and business goals?
- Are there tax implications or other benefits to consider lease over finance?
Whether you decide to lease or buy, ensure you obtain an FMCSA-compliant electronic logging device (ELD) to make tracking and reporting easier and safer.
5. Examine Your Work/Life Balance
At this stage in developing your business, it’s important to examine your work/life balance. You are the center of your business as much as your truck is. Just as you wouldn’t overwork your vehicle, you can’t overwork yourself either. Ensure that your business plan provides you with the time you need for yourself and/or your family. If you need to adjust your plan and business structure, this is a good time to do so.
6. Join REY Logistics
REY Logistics offers owner-operators the tools they need to succeed. We provide schedule assistance, dedicated dispatch, insurance, invoicing, fuel discounts, and more. Apply today to jumpstart your career as an owner-operator.