Becoming an owner operator is not a decision that should be taken lightly, especially if you wish to operate under your own authority. It is a whole process which requires multiple steps:
Step 1: Knowing what you want. Evaluate yourself and your personal considerations
One must consider own personality, family, health and career goals before making any decision. Furthermore, one must possess some trucking experience before starting own business to ensure knowledge of the trucking industry. It enables an individual to manage fuel, build a professional network and build expertise in niche markets.
Step 2: Making a business plan and choosing your niche
It is very essential for a business to target the right audience as specializing is the key in today’s competitive market. Once you know your audience, you can study their needs and requirements and serve them accordingly. It also enables you to decide your niche which in-turn specifies your direct competitors.
Researching on your competitors can help you establish your uniqueness which in-turn allows you to gain maximum market share. When making a business plan, you must ensure not to enter a saturated market so that it is possible for you to maximize your market share.
Step 3: Getting the Commercial Driver’s License
This requires time and consideration. One needs to pass a DOT Physical; to ensure medical fitness for duty and take the skills and knowledge tests. You need to get this as soon as you decide to drive a commercial truck.
Step 4: Handling Finances & Making the Decision to Lease or Purchase
Once you’ve made the decision to become an owner operator, finance handling takes the lead. You need to ensure you can survive in business within your first year.
Therefore, you must take business loans and licensing, owner operator insurance, & trucking equipment into consideration along with other monthly expenses incurred.
Depending on your current and forecast financial situation, you need to decide whether to lease or finance your equipment.
Step 5: Obtaining the Trucking Equipment
This step requires multiple considerations, from keeping the finances in mind to ensuring that the equipment can fulfill the type of operations it needs to be used for. Many factors need to be considered; age of the equipment, fuel economy, horsepower, engine, & type of transmissions to name a few. Geographical demands of your operation area also play a vital role in making the decision.
Step 6: Purchasing Trucking Insurance
This is very essential, and the coverage needed depends on the type of ownership of the equipment I.e. whether it is leased or self-owned. This is different than the ordinary auto insurance as it covers for any loss of load and assets along with protecting the owner. There are different types of insurance coverage depending on the type of equipment carried. Average insurance cost for an owner operator with one truck varies between $8000-$12000 per year.
Step 7: Understanding Load Boards
Getting loads to carry is an essential part of become owner operator. This has been made easy with the advancements in technology as now owners do not need to make calls looking for loads but can login to designated websites called load boards designed to help owner operators find loads.