An owner operator is a self-employed truck driver who operates his/her own small business to transport goods for customers. He or she is free to haul goods on their own or enter into a lease agreement to dedicate their equipment to one customer.
As an owner operator, you can have a lucrative career as long as you are hard-working, have realistic expectations, and work on building strong relationships. Here are a few tips we have gathered to help you be successful in your career:
- Search out carriers that serve recession-proof industries. You'll keep a steady stream of freight flowing if you work with carriers that serve growth sectors that will stand the test of a recession. Check out the customers these carriers work with to see if they have consistent, long-term relationships. This will position your business for strong growth. Do your research up-front and avoid jumping from carrier to carrier, because this will cost you a lot more in the end.
- Be realistic about your revenue for the first and second year. You'll need to cast your net again and again and build a book of business before you start seeing the money. You can expect to make anywhere from $29,000 to $45,000 your first year, depending on how hard you work. After that, you can make as much as $5,000 more for each year you work as an independent driver. As long as your truck is idling, you aren't making any money, so you'll want to keep the loads coming.
- Develop a business plan and a projected budget. Factor in administrative costs, wages per mile, fuel costs, permits, tires, tolls, scale fees, supplies, insurance, truck payments, payroll loading, and maintenance costs such as oil changes and car washes. Be realistic in your budgeting and factor in 'extras'. These can include GPS systems, load locks, binders, fluids, cleaning supplies, phone bills, and accounting costs.
- Choose equipment wisely. This is critical for success as an owner operator. Check out new or quality used trucks with warranties, know the requirements for your haul, including required truck specifications. Learn the trucks maintenance equipment inside and out, and always stay within your budget.
- Hire an accountant. At the end of the day, this could save you literally hundreds of dollars. Don't try to do it on your own, unless you are a tax expert. Forgetting a payment or not calculating your taxes properly can result in audits or thousands of lost dollars.
Source: Red Birds Nest