Becoming an Owner Operator
To become an owner operator is to gain the independence that comes with self-employment. Sadly, it is also to take on the burden and risk of self-employment, and these can sometimes outweigh its advantages. Whether they will is often under the driver's control as businessman. A good truck driver does not necessarily a successful owner operator make, but at the same time, success as driver will likely accompany success as owner operator. To become owner operator is truly to reach the pinnacle of accomplishment in the truck driving profession. Most owner operators gain great personal and professional satisfaction from their work, and most truck driers aspire to it. To reach that position, the driver must prepare carefully.
Your Financial Strength
Owning and operating a truck is a huge financial undertaking. Buying a truck itself requires substantial cash resources but it is really just the start. As for the truck, the important question is whether to buy new or used. The difference in price can be easily $50,000 or more. A new truck may cost $150,000, whereas a used truck may be available for $80,000 or less. Regardless of which the operator buys, he or she will probably need to make a down payment of 10% to 15%. On a new truck, that's $15,000 to $20,000, and without it, you have no chance of becoming an owner operator. The operator also needs to qualify for financing, and this requires considerable financial strength and creditworthiness.
Once a purchase is made and a truck is owned, the operator must then be able to support its operation and support him or herself until income is earned and the source stabilized. Furthermore, an employee of a company will generally have insurance benefits included in employment, but the owner operator will have none except for those he or she pays for. That expense alone is staggering. The would-be owner operator must carefully and legitimately assess his or her financial strength before commencing to become an owner operator. Without it, the chances of success are all the more limited.
Whether to Lease to a Company or Remain Independent
These are the options available to an owner operator, and while both have pros and cons, in the end the decision is a personal one that only the owner operator can make. There are great benefits to remaining independent, and for the entrepreneurial owner operator, they may offer irresistible appeal.
For instance, the independent owner operator will have complete discretion as to whether to take a load, and if so, which to take. The owner operator may decide not to take a load at all, and he or she is free to do so. Or may decide to take one load instead of another, and this is also his or her free option. At the same time, the driver operating under lease will gain the financial advantages of getting access to company fuel cards, as well as advances on pay. These are significant. Fleet rate insurance will save money. Most important of all will be availability and consistency of loads. Taking loads from a leasing carrier, the driver is likely to get more miles, and may have the chance to make more money.
Choice of Equipment
Driving style and choice of equipment will affect profitability. Simply put, some trucks are more expensive than others, and usually the more expensive the truck, the more enticing the amenities and the more dramatic and appealing the styling. Often the choice must be made between visual appeal and creature comfort, and economy and profitability. This difficult choice is for the self-employed owner operator alone to make and live with.
Conduct an Honest Self-Assessment
The owner operator works for himself. If the work is going to get done, then he or she will have to be the one to do it. This fact presents unique challenges for anyone considering self-employment. Self-employed drivers often work twenty hours in a day, and the would-be owner operator must consider honestly whether or not he or she is willing to do that. And not just willing, but also able. If there are any health considerations or limitations in place, then being owner operator may not be a viable option. Family considerations enter into it, too, and if there are special care needs for children, parents, or spouses that require time at home, then possibly becoming owner operator is not realistic. Speaking of home, everyone likes spending time at home and leaving the cares of work outside, but owner operators sacrifice that. They are forced to. Someone unable or unwilling to do so may find the role of owner operator to be impossible.
Form of Operation
The owner operator must choose the form of his or her business operation. The choices are relatively few. The owner operator may operate simply as a sole proprietor, doing business in his or her own name, or may form a corporation or LLC. For the best guidance on form of operation, the would-be owner operator is advised to consult an attorney. If corporation or LLC is chosen, the attorney can see to completion and filing of documents, and posting of notice as required. More importantly, the attorney can counsel the operator on the best choice for his or her business.
Becoming an Owner Operator: The Personal Choice
These are some of the important concerns for someone considering becoming an owner operator. Review each factor closely and frankly before making a decision. Many drivers find great success as owner operators and enjoy long careers with security and financial success. Others decide against it and remain employees, also finding satisfaction in that role. The decision is up to each individual to make based on his or her unique circumstances and outlook.