Are you considering making the leap from company driver to owner operator? Almost 10% of American truck drivers are living the entrepreneurial dream and are driving a truck they own. For many drivers moving to an owner operator business model makes the most sense. This week we are looking at the 4 Steps you must take when considering a move to driving as an owner operator.
Before you invest in a truck and leave your current job, follow these 4 steps to guide you through the decision making and purchasing process.
Let’s be honest here: Not all drivers are suited to be an owner operator. It is best practice to be very honest with yourself from the beginning. Take time to take a look at your work history. Your habits, family demands, financial needs and available hours to put into work can impact this decision. Lifestyle and family challenges usually have the largest impact to your success and the chances you you have to be successful as an owner operator. Grab a pen and paper and answer these questions honestly.
- Driving – How hard do you like to run? Do you prefer to maximize your available hours so that you can run as many hours as possible?
- Home – Do you prefer every weekend and days throughout the week at home regardless of the impact time off has on your pay?
- Family – Do you have special family issues or considerations that may restrict when you’re available to drive?
- Health Issues– Is your health good? Is having a company sponsored health care plan a must? Are you financially prepared to pay out of pocket for healthcare issues?
These are just a few of the considerations that need to be thought through before making a decision. By honestly assessing your professional ambition, family demands, and personal goals you can be sure that your decision was the right one.
Oftentimes the decision to own your own truck is rooted in money. There are great opportunities to increase your take home pay every week. With those opportunities there are risks and those can be mitigated and planned for. It is important that you examine your financial situation to ensure that you are prepared for this change.
- Budget – A budget is a tool that guides how your money is spent week to week, month to month and year over year. Creating and living by a budget is critical and allows for those unexpected expenses by planning ahead.
- Excessive Debt – Are you carrying excessive unsecured debt? If so, you are not alone. Most Americans carry some amount of debt. If you hold a high amount of unsecured debt, credit cards, department stores, etc, you may be unable to secure financing for a truck. Start by eliminating as much as possible to give you financial flexibility.
- Escrow Accounts – Escrow accounts are simply savings accounts marked for specific purposes. The two most common are maintenance and health. Putting a bit of cash aside regularly in these two areas will help keep you on tract if breakdowns or illness keep you from logging miles.
- Credit –Once you have assessed your debt, it is time to checking your credit report. This report will help you identify inaccuracies, unpaid bills, and ensure that you are prepared to purchase or lease the equipment you need to operate.
Your single largest expense in capital outlay at the beginning and month to month is your equipment. The equipment you choose to run will be a determining factor in your overall profitability. You might prefer the looks and the classic styling of a long-nosed Peterbilt or KW, but think about if your business afford to look good at the expense of profitability. Second to the expense of the truck is the fuel needed to run that rig. Perhaps you can live without the extended bunk, full swivel captains chairs and leather interior.
Other factors to consider include:
- Age of tractor (including mileage, warranty, and amenities)
- Geographical demands of your operation area (ie. extreme temperatures, mountain driving, etc)
- How long you’ll be out: What cab amenities do I need?
- Fuel economy
Horsepower, torque, type of transmissions, engines, driving style, all contribute to your bottom line, but the habits and driving style will also play a huge role in profitability. Understanding the way you will be driving will help you make the best tractor purchase.
Becoming an owner operator is becoming a small business operator. Setting up a business structure for your business and having a plan for paying your taxes, bills and bookkeeping is mandatory. Today’s tax requirements are suck that assistance from a professional lawyer or accountant is required. Locating qualified professionals who understand trucking is paramount to your success as an owner operator and small business owner.
This is no small decision to be made. Sure there are benefits to becoming an owner operator. The potential for greater income, flexibility in routes and days on the road and the pride that comes with driving for yourself are but a few. These 4 Steps don’t include every item to be considered but is a good starting point. You can find success by taking a close look at your needs and desires you hope to gain from becoming an owner operator. If you are honest and gather the right professionals, you will find driving for yourself to be a rewarding and satisfying venture.
PFS Created for Owner Operators
Paramount Freight Systems is a 100% owner operator fleet. We were formed in 2008 for owner operators. Every day we work with owner operators helping them make sound business choices so they are successful. With a total dedication to the modern owner operator, hundreds of drivers have found PFS to be a stable and accommodating fleet for them to operate. Our partnership with the owner operator fleet allows drivers to successful business partners with dependable freight lanes, discount programs and the business structure needed to be profitable every week.
We are proud to partner with our current owner operators and welcome the opportunity to partner with any owner operator seeking a place to grow their business. Contact us here at DrivePFS.com/contact and allow us to help you on the road to becoming an owner operator.
Did you enjoy this post? Share it!
Categorized in: Owner Operator