If you’re considering becoming an owner operator in the business of trucking there are many points to consider. Almost all truck drivers, no matter if they’re new to the field or a veteran has at some point or another dreamed of having their own big vehicle, and taking to the roads to make huge bucks.

Maybe it’s time for you to begin your own company as an Operator who is an owner. Perhaps you’ve worked for a company but are ready to start independently or perhaps someone in your family has had a good experience working as a driver.

Keep in mind that the most successful owner operator truck driver in the business did not get to the position they have today due to pure luck. They are successful because of what they do every and every day.

This blog is designed to aid those looking to become an owner operator navigating the aspects and pitfalls of the trucking industry.

What is the definition of an owner operator?

In the majority of cases, an owner operator is the owner of a small business that oversees the day-to-day activities.

Owner operators are independent transport drivers who run their transport business using themselves and their personal vehicles. They may also lease their services, but they still use their own trailers.

Also, owner operators oversee the day-to-today operations of their company independently. The owner operator can be an employer or driver in the same way

Why Do Owners Operator Fail?

Each owner operator hopes that their business will succeed. Many businesses fail within a short time period, leaving owners with nothing. Take some time to read the reasons they failed to succeed to get a better understanding of what you can do to avoid them.

Poor money management:

If you don’t do your bookkeeping correctly, you’ll soon be out of work. You should have an emergency fund for unexpected events, such as a breakdown, health problem, or drop in freight prices or the economy.

Insufficient Profit:

If you don’t make enough, your business won’t survive. Start by looking at the numbers to see if more money is coming in than going out. Also, you will want to reduce your expenses whenever possible

Laziness:

Some owner operators believe it is easy to work for themselves. It is not true. Actually, it can be more difficult to work for yourself in many ways because you must hold yourself accountable

Rule-breaking:

Failure to adhere to DOT standards or the law will cause your business a lot of hardships. Do not take shortcuts, and ensure that everything is done according to the law. You and your employees must be up-to-date with all new laws and regulations.

To be a successful owner operator, you need to learn how to live within your means. You must pay your bills on time, plan ahead and work hard. Trinity3Logistics LLC wants to see our customers succeed in every endeavor.

Company Drivers vs Owner Operator

There are two types of professional truck drivers on the roads: owner operater truck drivers and company drivers. Trucking companies employ company drivers, while the owner operators run the company.

Both are great ways to make a living but there are key differences. Before deciding which career path is right for you, it’s important to evaluate your skills and assess your financial and personal needs.

Owner operator benefits

Many owners-operators are proud to be owner-operators in a field that has many carrier companies. It is a rewarding and exciting business venture.

These are the top benefits of being an owner operator.

1. Purchase your preferred vehicles and equipment

Company drivers may share vehicles but are not assigned to rigs. Owner operators do not have the same rights. Owner operators have full control over what vehicles they wish to purchase and how they use them.

2. Gain greater control over your income

Owner operators can make up to $221,000 annually. Owning a trucking company can be lucrative if you are able to hustle, understand and follow industry trends, and negotiate well. Independent owner operators have greater control over their income and the way they want to grow and increase revenue.

3. Be your boss

Many drivers love the freedom and independence that comes with being your boss. You don’t have to ask for permission to ride along with family members, pets, or insurance.

Even more freedom is available in the hours you work on and off duty. If you achieve your profit target ahead of time, you have more flexibility as your boss.

4. Expand your network with more opportunities

You can network with many people when you own a trucking business. People will get to know you better as an owner operator and may be interested in business partnerships.

Owner operators face many challenges, including finding loads, starting expenses, financial responsibility, compliance and compliance with various regulations.

Owner Operator Salaries: How Much Do They Make?

It is among the most frequent questions asked by those contemplating a switch from the corporate driver into an owner-operating business. The median earnings for owner-operators is $221,039 according to Indeed.com. However, this can vary widely based on experience, what kind of load a driver is expected to be specialized in and transport as well as the amount of time they are in the roadway.

While it may seem like an enormous amount of money, here’s a note of caution: This is the median salary for an owner-operator however, they typically make less when you include costs. You’ll need to dig further to find the

It is among the most frequent questions asked by those contemplating a switch from the corporate driver into an owner-operating business. The median earnings for owner-operators is $221,039 according to Indeed.com. However, this can vary widely based on experience, what kind of load a driver is expected to be specialized in and transport as well as the amount of time they are in the roadway.

While it may seem like an enormous amount of money, here’s a note of caution: This is the median salary for an owner-operator however, they typically make less when you include costs. You’ll need to dig further to find owner operator salary that is, what you’d earn every week and annually after you’ve paid for your expenses

owner operator that is, what you’d earn every week and annually after you’ve paid for your expenses.

Pathway To Become a Successful Owner Operator

1. Assess your own situation

Truck drivers who work over-the-road (OTR), may spend several weeks away from their loved ones, friends, or homes. This makes it difficult for single parents and those caring for elderly family members.

It is important to have experience. Owner operators often start their careers as company drivers. This is because it’s a great way for them to gain valuable driving experience while not taking on financial or personal risk.

2. Take stock of your finances

Personal investment is required to make a successful venture on your own. This could require additional debt.

You should save money for an emergency if you have a dependent family member. If you are experiencing slow months or a long time to receive regular loads, this will provide a safety net.

To calculate how much money you will need each month to cover your expenses, put all your financial information in a spreadsheet.

3. Get a Commercial Driver’s License (CDL).

To become an owner operator, you will need a commercial driver’s license (CDL), if you don’t already have one.

Although it’s not difficult, it’s more complicated than getting a regular driver’s license. To become fully licensed, you will need to pass a physical, take a knowledge test and pass a physical exam.

After obtaining your CDL, you are legally allowed to drive heavy commercial trucks as an owner operator or company driver.

4. Get your DOT/MC numbers

To be a driver-operator you must first obtain the USDOT and MC numbers in order to legally operate. You can apply for an MC number if you have a U.S. Department of Transportation Number.

You must also be adequately covered by truck and health insurance if you are in business. To find out more about the type of insurance that you require, visit the FMCSA insurance page.

Read more on the importance of DOT AND MC number for your trucking business

4. Form a business

You must first form a legal business before you can apply for your USDOT number. The Federal Motor Carrier Safety Administration will be asking you questions about your business operations.

To check if your business name appears in the database, first go to your state’s website for secretary of state. Next, you’ll need to choose a business structure.

If you are a sole proprietor, you will likely create a sole proprietorship (LLC) or a limited liability corporation (SLP). An LLC gives you the same benefits as a sole proprietorship, but without personal liability. An LLC protects your assets and makes your business liable.

You can make all business decisions as a sole proprietor without the assistance of a partner or board. However, all aspects of the business’ legal and financial affairs are linked to you. This means that your personal assets may be at risk if you are sued or have problems with your debt.

You can also form a corporation. If you plan to expand your trucking business, or if there are plans to add more employees, this might be an option. This creates a separate entity for tax purposes, so you won’t be able to receive the benefits of pass-through income.

5. Apply for a USDOT number

The FMCSA assigns you your U.S. Department of Transportation number (USDOT). This number identifies you to interstate commerce as a carrier. The FMCSA website allows you to apply for your USDOT Number.

The importance of DOT number is that it is a special identification number those businesses and individuals used to identify themselves with the United States Department of Transportation.

Notification: You will need to establish a legal business before you can apply for your USDOT number. The FMCSA will be asking you questions about your business operations.

6. Find your trucking authority

Your motor carrier (MC), number is what identifies you as a “for-hire” carrier who transports goods on an individual basis. You will operate independently and are your boss, unlike a driver who is employed by a company. Truckers use this term to refer to “trucking authority” and “operating authority”.

To pursue owner operator opportunities, you will need both a USDOT and MC number. To transport items that have been altered from their natural state (e.g. wood furniture), you will need an MC number.

7. Get truck insurance

FMCSA requires that owners with authority have liability coverage. FMCSA requires general freight carriers have $750,000 of liability coverage. However, most shippers and freight brokers need $1 million.

To protect your business, you can also buy other types of insurance such as cargo insurance, personal property insurance and roadside assistance coverage.

8. Deciding whether to purchase or lease a truck

Owner operators usually prefer to buy their own truck, though this can require a large down payment. You can make a down payment if you are able to. Then, you can get a loan for new or used trucks. Finally, you will pay it off slowly until you have equity.

Although leasing a vehicle is less expensive, you will not own it. You won’t have any equity in the vehicle and could end up paying more over time.

These questions will help you decide which one is the best.

• What is the maximum length of time I can keep the vehicle?
• What financing options are available for me?
• Are there tax benefits or implications?

9. Draw up a business plan

A business plan is required before you can form your company. The following are the components of most business plans:

• Executive Summary
• Overview of the company
• Marketing plan
• Milestones and goals
• If any, list of staff
• Financial plan

An executive summary describes briefly what your business does and where it is located. It also provides information about who it serves.

10. Load boards are a great way to locate freight

After you have formed your company and received your authority, you are able to start browsing load boards. You can get Load Board easily at negotiate rates, find routes and keep your business running smoothly. Trinity3Logistics.com offers a comprehensive set of tools to help you manage your owner-operator company.

11. Buy an electronic logging device (ELD)

An FMCSA-compliant ELD is required to comply with regulations. You technically can fill both the driver and fleet manager roles by creating accounts.

To record hours of service, you must connect your ELD either electronically or physically to your truck.

Want to get more insight on ELD? Click here 

12. Factoring invoices can increase cash flow

Factoring can help you increase your cash flow by quickly getting your invoices paid.

• Haul a load
• Send your invoice to trinity3logistics.com
• Flat fee payment immediately.
• Instead of waiting for an invoice to be processed, you are paid almost immediately.

13. Follow the golden profit ratio

You need to be able to determine if your business as an owner-operator is profitable. This means you need to know your profit margin.

Calculate your gross profit first. This is the difference between operating expenses and revenue.

Example: $200 revenue + $150 expenses = $50 gross profit.

Divide this number by your total revenue and you will get your profit margin. This percentage can be represented as a percentage.

$50/$200 = 0.25 – 25%

Your ratio is therefore 25%.

Although there is no “golden” ratio, most experts agree that a business is considered healthy if it has between 10% and 20%.

14. Your health should be a top priority

You will need to care for your business if you are sole proprietor. Since you work for yourself you won’t be able to take sick leave. Therefore, any time you don’t bring in revenue is time you’re wasting.

Prepare healthy meals and exercise regularly while on the road. You should take breaks as needed and make time to spend with your family and friends.

15. Set up a system to manage your finances

You’ll also need a way to keep track of your finances for both tax purposes and to ensure that the business runs smoothly. This is possible with a spreadsheet or software programs.

Becoming an owner operator is not a decision to take lightly, especially if you want to operate independently. Trinity Writers is here to help you get the trucker insurance you need to succeed in the industry. Get in touch with Trinity3Logistics for owner operators consulting service

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