Your trucking career will take an exciting turn when you become an owner-operator. You now have the chance to work for yourself, earn more money, choose your own loads, and decide when you want to take a vacation.
However, not everyone is suited for a job like this. Before switching from a company driver to an owner-operator, there are numerous aspects to take into account. Before starting a trucking business, all truck drivers should be aware of the following key points in this post.
Know the costs before starting
Starting a trucking business is an expensive venture. Before you can begin driving, you’ll have to pay a lot of up-front expenses. The down payment on your truck, your licence, plates, insurance, and permit fees are a few of these expenses. You will have additional monthly charges after these initial costs. These include food, upkeep, and gasoline.
Before your company starts turning a profit, it is crucial that you have a plan in place for paying these expenses. The first six to twelve months will be challenging as you work to recoup the money you invested in the beginning.
Insufficient financial flow is the main cause of new enterprises failing. Make sure you are prepared for this investment before you launch your business.
Have a cash reserve for emergencies
This is by far the main cause of newly launched businesses failing. It happens frequently for enthusiastic newcomers to the transportation sector to decide to change their status from leased driver to leased owner operator. Although trucking is a fantastic opportunity, the profit margins are really slim!
Truck driver jobs are usually a target of various disasters. The list is far too big for this article, so we will keep it for a future piece on topics like DOT police shakedowns and tyre blowouts. We strongly advise that you try to keep 60–90 days’ worth of expenses aside for unforeseen circumstances.
Understand how you will be taxed
The way corporate drivers and owner-operators are charged are one of the most significant variances. Many first-time owner-operators are unaware that they will need to begin paying taxes quarterly rather than having taxes deducted from their paychecks automatically by an employer.
For your quarterly taxes, we advise that you set aside between 25 and 30 per cent of your weekly income. This means that in order to easily track your earnings, you must retain all company receipts and supporting documents.
Know who will be your target market
It’s likely that you’ll lease space from a carrier when you launch your own trucking business. This implies that rather than you need to go out and seek out new consumers, they will present you with them. This does not imply that it is any less crucial to understand who your ideal client is.
First things first, the type of business you run will decide who your customers are. Compared to a dry van driver, a flatbed trucker’s customers are probably going to be different. Knowing your business will help you identify who your normal clients are.
You should also think about how you might add value to your customers. Recognize your strengths and make the most of them.
You could not have a lot of control over the pricing while being leased to a carrier. However, you may identify more aspects of your business that set you apart from the competition. You can locate and keep consumers that like how you run your business once you’ve decided how you’re going to be unique.
Familiarize yourself with the regulations you must follow
Before you begin as an owner-operator, you should know the rules and regulations you’ll need to comply with. To prevent your company from being forced to close, your truck must adhere to CSA safety regulations.
A functional Electronic Logging Device (ELD) must be present in every driver’s truck. This will make it easier for you to monitor your weekly hours of service. Last but not least, the CSA provides a list of physical requirements you must meet in order to become a fit driver. Any owner-operator who wants to drive must be familiar with all of these laws and guidelines.
Recognize that running a trucking business is challenging
Running a trucking business is quite labour-intensive. That’s not really a big secret. You spend the majority of your time driving, so when the day is over, all you want to do is unwind. But you are also a small business owner as an owner-operator. This implies that regardless of how exhausted you may be, you still have a business to manage.
