An owner-operator is a business owner who owns a semi-truck (or trucks) and performs contract transportation services. Work can be local delivery of goods, over-the-road distribution or other service that requires the movement of objects. Before you quit your day job you should, at the very least, know all that in order to put yourself firmly on the road to success, there are a number of critical decisions and self-assessments that need to be made. These are guidelines that you would need to take into consideration before running a business from your truck.
1. Personal Assessment – Make a thorough and honest assessment of yourself and your situation. Many people get into being owner-operators for reasons that are more fantasy than fact. Remember that you are now going to have to cover all your costs, from gas to insurance. Consider things like whether or not you want to spend every weekend at home, regardless of the impact on your paycheck. It is also important to consider how long you plan to spend behind the wheel of a truck. If the answer is less than five years, becoming an owner-operator is probably not for you.
Career goals (Short term & Long Term)
2. Financial Considerations – Make a budget for your new business. Include all expenses including gas, insurance, food, repairs, maintenance and your desired take-home pay. Be certain to include a significant fund for unexpected expenses like tow truck expenses if you get stuck in ice during the winter, or need a roadside tire change. You should have enough money saved for a truck down payment and at least three months’ worth of expenses to account for any slow payments before starting your owner-operator journey.
Eliminate Excessive Debt
3. Business Incorporation
Prior to becoming an owner-operator, you should incorporate your own business. Incorporating your business limits your liability and financial losses in the event of an accident and makes you look more professional. It also allows you to sign up for financing and insurance under the business name instead of your own name, which helps establish business credit
Truck: Review financing options for your semi-truck purchase and look for a good truck. Make sure the truck you purchase is suited for the types of owner-operator jobs you want. For example, you do not need a sleeper compartment if you only want in-town jobs. The extra weight costs you money in extra gas.
Repairs: Find a reliable mechanic that you trust before you buy a truck. Have him look at any truck you want to buy for an estimate on any existing repairs and on the possible life expectancy of the truck. Since downtime can cost you jobs and money, having a reliable mechanic is a necessity for an owner-operator.
Legal and Accounting: You may know how to drive a truck, but chances are you don’t know how to do your own accounting or handle your own legal affairs. Having a lawyer on retainer will help you in the event of any unfortunate legal issues. An accountant can not only help you keep track of your money, he can also help you to find tax breaks unknown to you.