There is more credit and satisfaction in being a first-rate truck driver than a tenth-rate executive.
~ B. C. Forbes

Go Your Own Way: Become an Owner Operator

Americans have always been an independent bunch; since the beginning of our nation we have always forged our own trails, and have never been afraid to go it alone. Resourcefulness and a free spirit have guided us since we first put down roots in the new world.

There exists in every industry a group that doesn’t wish to follow the crowd; those who want to pick the fruits of their own labor and decide, without being told what to do, the direction in which they want to travel on any given day. In the trucking industry, these people become owner-operators.

Being your own boss and making your own decisions is a great thing, but while it gives you a great deal of freedom with one hand, with the other hand it burdens you with a great deal of responsibility. Yes, you can make your own decisions and often earn much, much more than is possible by working for somebody, but if you’re not ready, either financially, intellectually or emotionally, to take on this responsibility – then you are not ready to be an owner-operator.

The key to success in any business is preparation. Being an owner-operator is no different; those who go in with their eyes wide open, with a sound business plan, and a solid financial base will have the best chance of succeeding – for the others, there is impending failure and possible bankruptcy.

The potential owner-operator must recognize the expenses that he will be taking on. He will now have to pay for his own fuel and repairs, his own health care, maybe a loan payment. Insurance will be a big expense, and the responsible owner-operator will have an emergency fund – in cash – to take care of a major breakdown. A truck that isn’t running is a truck that isn’t earning – but that note still has to get paid, the health insurance still has to get paid, the insurance still has to get paid – and oh yea, you still have to eat.

Got all that? Satisfied that your income/expense homework leaves you with a sufficient profit to take on all the responsibilities? Ready to roll? Let’s go…

Becoming an owner-operator starts with, not surprisingly, owning your own truck. Notice we said “own” – for the owner-operator that enters into a lease-purchase agreement with a carrier will find that he does NOT have the freedom he thought he would have. Until the lease-purchase is complete, the carrier still owns the truck, and so can force the driver to make the runs that they choose him to make. So, many of the benefits of being an owner-operator do not exist under these plans, and the trucker should think long and hard about whether or not he wants to enter into a deal like this. Though the minimal up-front costs are very tempting, perhaps he would be best served by waiting until he has saved more money.

Once you have saved enough money, done your due diligence, and decided that being an owner-operator is the route you want to take, you’re ready for the first big step: buying a truck. You now face the option of choosing to purchase a used truck, or to use your funds as a down payment on a new truck. There are positives and negatives built into either choice.

Obviously, the purchase of a new truck, with all the attendant warranties, will give you greater piece of mind when it comes to maintenance expense. On the other hand, there is the built-in expense of paying the note on a monthly basis, which will obviously cut into your profits.

Choosing a used vehicle, on the other hand, will result in greater monthly earnings because there is no note to be paid – or a very small one. However, let the buyer beware – repairs loom just over the horizon. The driver that has a great deal of experience as a mechanic, the do-it-yourselfer, will generally fare better with used vehicles for obvious reasons – though even he may encounter nasty (and potentially expensive) surprises a few miles down the road.

Finally, the owner-operator will have to get work. The internet is a great resource for finding jobs, but remember, the owner-operator must be a businessman, too. Choosing the right type of work and planning ahead is of paramount importance. Make contacts within the industry – the more the better. Make sure you do as much networking as possible; get your name out there. Market yourself, just as any businessman would. Work will start to come to you with greater frequency (and greater profitability) as your reputation and name-recognition grows.