A few years ago, a friend of mine resigned from his driver position at a reputable trucking firm and became the owner operator. At the time I was convinced that he was insane! He was sacrificing an income that was steady and a guaranteed run benefits, and much more to pursue his ambition of becoming an entrepreneurial. What I did not know was that the amount of thought and planning behind his decision, which helped him to become the successful owner-operator that he is today. In the past weekend, He shared his top five ideas for what to look at prior to becoming an owner operator with me.
1.Before Becoming an Owner Operator
A majority of people believe that being an owner-operator is easy…wrong and very wrong. The job of being your own boss can be quite a bit of work…and it’s not as easy as people think it is. When you are ready to leave your current job, try running as an owner operator to see if you can track your tips, costs and hours.
- Track your trips including miles, loads, pickups, drop-offs, etc.
- Track the expenses that are associated with your vehicle like maintenance, gas Fines and insurance.
- Monitor the duration of your visit by estimating the amount of time you’d have to devote into the driving, maintaining your truck administration in the back office, establishing relationships, securing loads and so on.
For some time and add the costs of being a solo operator. Check your finances to determine whether you’re able pay for these expenses by yourself. If not, you’ll be required to save for a while before making the move.
2. Get Your Finances in Order
The financial strain of becoming an owner-operator is not something to be ignored. Starting out as an owner-operator requires hundreds (upon hundreds of thousands) worth of money before you’ve begin to drive!
You’ll need to acquire an auto, purchase insurance, get employees to run your business, pay for all repairs, and so much more. It’s essential for your success to make sure you have the financial resources to support this choice of career.
- Do not enter this with debt that is too high
Finding yourself in debt is quite typical nowadays. The majority of people have credit cards as well as mortgages, personal loans and more. Before you become an owner-operator make an effort to cut down on your debt to the greatest extent feasible. The more debt you have more significant is the impact it has on your credit score as well as your ability to get a business loan later on (if you need one).
- Create the budget
It’s shocking how many people don’t have a budget. If you own your own business, this isn’t more an option. Find out the amount of money you’re sending out (expenses) as well as what you’re earning (income). Be sure that you’re making an income (more cash coming into) or you’re unlikely to be able to sustain your business for long.
- Start Saving
you should be putting funds aside each month. You’ll need to save for yourself as well as in your company. For your company, map possible future purchases and repairs, then assign it a dollar value and set that as an objective. Personally you’ll want to set funds aside in case you become injured or sick. Begin looking into insurance options to reduce the burden.
3. Plan Your Spend on Equipment
Everyone wants to own that new Kenworth truck…but is it possible to afford it? The low rates of financing are attractive however, you’ll have to purchase it and you should have enough money to repair it if it breaks down!
It is not a good idea to over-stretch yourself when buying your first car. A lot of owner-operators suggest a buying cycle that involves buying an older vehicle to purchase it, then pay it off, and sell it and then purchase an entirely new vehicle and then purchase it, and then pay off it and so on. This cycle will continue until they find the vehicle they desire. It’s a great method to plan your budget and to build equity (rather than putting yourself into debt).
When you own your first vehicle, enjoy the vehicle! You’ll want to keep maintenance an important main priority. Regularly check your oil as well as flushing fluids along with preventative maintenance. The small steps you take will make a difference in the repair cost down the road!
4. Get Professional Advice
You’re a driver. You could be among the top drivers in the world But you’re no accountant, office manager, or a lawyer. Nobody can be everything. It is important to seek expert advice and support in the process of setting your self to be successful. This is crucial when you are starting out in your first venture on your own.
5. Determine If This Lifestyle is the Right Fit for You
Owner-operating is a change in lifestyle. Make a review of your life to determine that being an owner-operator is right for you. Begin by asking yourself the following questions:
- Home: Do you have to stay home at night? Every weekend?
- Family/Relationships: Do you think that being away from your family members for longer durations of time likely to be a problem? Do you feel comfortable with a lack of important events to get the most work done? Do you think child custody or visitation will be a concern? Do you have to be flexible to provide the needs of children?
- Health: Are you suffering from any health concerns or major health issues? Do you require extensive medical insurance? Do you anticipate any health issues that will cause you to be absent from work?
- Financials: Can you live for just a few months on little or no money? Do you have the money to invest in your venture?
- Business: Do you know what your company’s goals are? Are these goals a temporary thing?
The lifestyle of the owner operator isn’t suitable for all. It requires sacrifices, adjustments, and adapts to the challenges and adapt the lifestyle. For those who are able to manage it, enjoy it! Be sure to plan and prepare yourself to make yourself successful.