So, is being an owner-operator worth it? To make this easier to understand, we are talking about the benefits or profitability of transitioning from a company driver to eventually owning your own business.
Is it better to be an owner-operator? While providing an answer, we’ll also be looking at tips as well as advice that will be of help.
If you’ve worked (or currently work) as a truck driver, one of the questions that are likely to have crossed your mind has to do with how worthwhile it is to become an owner-operator.
Now, this is very popular and common among drivers as those who drive for a company eventually opt to own or start their businesses through this path.
Is Being An Owner Operator Worth It?
Can owner-operators make good money? Yes.
Becoming an owner-operator, without a doubt, comes with lots of benefits. This includes being profitable. However, not everyone perceives opportunities in the same way. In other words, it depends on what your needs are.
Let’s paint a picture of what it looks like, in terms of expenses, profits, and benefits conferred.
Why You Should Become An Owner Operator
Becoming an owner-operator comes with certain expenses. Such expenses are usually incurred while operating the truck or equipment. These include insurance, maintenance, road use taxes, fuel taxes, personal and corporate taxes, tolls, and more.
The type of expenses you incur depends on your type of operations as well as laws governing your type of business.
Having highlighted the expenses incurred in becoming an owner-operator, it will be only right to also discuss the profit potentials.
So, what is the average earning of an owner-operator? The annual gross earnings fall within the $100,000 to $150,000 range.
However, you have the chance to increase your profits by controlling your trucking expenses such as fuel costs among other things. Doing this helps maximize your profit margin. Most important of all, your truck should be taken care of. this forms a major part of your equipment which, if not taken care of may deplete your profits.
Having control over your expenses gives you a strong chance to increase your profits significantly. Therefore, the question of profitability depends on how well your operations are structured and managed.
Having Your Truck
Getting to not only have your truck but also choosing which truck gives you greater control. You have the freedom of customizing it to fit your specific needs. Being the owner of your equipment is priceless and allows for better and enhanced profitability.
Making The Comparison
In many cases, people confuse owner-operators with company drivers. Although both drive trucks, there are fundamental differences. So, what are these differences like? For owner-operators, there is greater flexibility as opposed to what obtains for company drivers.
Owner-operators spend less time on the road because they can choose a lenient driver policy. In other words, you have no fixed mileage to cover as an owner-operator. As such, you won’t be stressing your equipment or trucks as much as company drivers do.
As an owner-operator, you have a choice to choose who to work with. This can also be termed having control over your schedule. This act of working on your terms and building your business places you at an advantage over the company driver because they work solely for the company.
You also get to work with the company that offers you the most benefits.
Tips And Advice On Care For Your Most Valuable Asset
For a trucking business, your most important asset is your truck. To make this business worth your time, you’ll need to be actively involved in ensuring your truck(s) get adequate maintenance. It all begins with choosing one with good resale value.
It’s no secret that certain trucks have better resale value than others. This is due to several reasons. Try discussing with truck owners on the best brands to go for. Trucks with good resale value can be traded up or sold with good returns when the time is due.
Will restoring the truck be more cost-effective or do you need to purchase another? This is a question that must be asked and satisfactory answers obtained. Doing this saves you from incurring unnecessary expenses.
Having some experience with repairs will cost you less and increase your profitability. Not all repairs will require taking your truck to the garage to get it fixed. Some repair experience gives you that extra advantage.
Becoming A Successful Owner Operator
Having decided that this is the best path to invest follow, you’ll need guidance on steps to take in becoming a successful owner-operator. These are necessary steps that will guarantee success. They include;
Remember we earlier talked about your business needs? Well, it all has to do with what your goals are (both long and short term). Here, the state of your financial readiness is very important. Also, the right contacts are needed as well as the right strategies to close deals.
Your physical health is also important. Do you consider yourself fit for driving for long periods? Do you have any experience with road regulations? All these are ways to evaluate your readiness for embarking on this business. Doing this enables you to determine if you’re ready or not. It also helps to prepare adequately.
Secure Your USDOT And MC Numbers
These are important and basic requirements for all trucking businesses. These are road regulations set by the Depart of Transportation. Obtaining these numbers in addition to other regulations helps you launch your business the right way.
Getting The Right Truck
This point can’t be stressed enough. The condition of your truck will determine how profitable you become in the long run. You want to get one with the best condition. Now, financing plays a crucial role. You can either decide to buy your truck outright or rely on alternative financing arrangements such as a bank loan.
Part of the requirements for getting a bank loan include having a good credit rating, a stable job background as well as a permanent address. All these enhance your chances of getting considered.
So, is being an owner-operator worth it? Is it profitable? Yes. However, you’ll have to make such a decision based on your needs.