You’ve got your CDL License, great. Now what? Consider becoming an independent truck driver! An owner-operator driver is simply a driver who owns their truck. Instead of driving for a company, the owner-operator is responsible for everything from their truck maintenance to licensing and taxes.
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If you’re still unsure about your decision, we’ve compiled six important steps to launching a successful career on the open road so that you can have the confidence to become an owner-operator.
Step 1: Evaluate Your Situation
Starting your own business is a liberating venture, but it is also important to gauge your financial situation and goals. Being an owner-operator requires you to know your worth that including:
- Building a strong financial foundation
- Understanding an owner-operators salary
- What to expect in the next six months to a year
- Assessing long term and short term goals
- Finding good connections within the owner-operator industry
- Being knowledgeable of road regulations
If you already have already obtained your CDL license and have prior truck driving experience, then you’ll be a step up compared to others who are just starting out.
Step 2: Obtain Documentation
After assessing your financial situation, you need to acquire the USDOT and MC numbers to legally operate as an independent truck driver. Once you have both, make sure you are covered by health and truck insurance. Within the division of the US Department of Transportation, you’ll find that The Federal Motor Carrier Safety Administration (FMCSA) will provide you with assistance on acquiring a USDOT and MC number.
In December 2017, the ELD mandate was implemented by the FMCSA. The federal rule requires non-exempt CMVs to install FMCSA-compliant electronic logging devices.
Further reading: Obtaining you Class A CDL License
Step 3: Lease vs Purchase
One of the first things you need to be qualified as an owner-operator is having your own trailer. There are various pros and cons to leasing or purchasing a new or used truck. Depending on the model, owning a new or used truck will influence your future career in this industry.
When it comes down to it, trucks are an investment. If you’re not ready to commit to the idea of purchasing your own truck, then you can take the leasing route. A lease will allow you to use the necessary equipment for a certain period of time. During this time you will pay a set amount of money until the end of the term.
- Payments are fixed and predictable
- Usually require less money than a loan
- Potential tax advantages
- Choose the best type of lease that suits your needs
- May end up paying more than you would have if you bought the truck
- Cannot custom the leased truck to your liking
- Carry extra insurance on the truck to protect the investments
- Might not get enough miles to make lease payments
Before entering a lease agreement, weigh the pros and cons and understand all the costs that go into operating your truck.
When purchasing a truck, keep in mind that you need to narrow down your search for the right truck. Knowing what kind of model you want will help in saving you money in the long run.
- You own the truck and can modify and use it however you want
- Can be used as a tax write-off
- Commercial truck insurance is usually cheaper than a leased one
- Start-up costs are steep
- Insurance and repair bills are your responsibility
- Finding your own loads
- Lower insurance premiums than when you lease
Whether you are wanting a new or late model truck, there are various safety, warranty, and fuel economy features that impact your career goals as an owner-operator.
Step 4: Obtain Documentation
To become a driver-operator, you first need to acquire the USDOT and MC numbers to operate legally. If you already have a U.S. Department of Transportation number, your next move is to secure an MC number.
Being in the business also requires you to be amply covered by health and truck insurance. Visit the FMCSA insurance page to get the details of what kind of insurance you need.
Further reading: Obtaining you Class A CDL License
Step 5: Strategize
Becoming an independent owner-operator requires you to strategize on how to maximize your profits. Start thinking about how you can gain revenue to outweigh the operational expenses. Expenses will accumulate for those who are looking to become owner operators such as:
- Vehicle insurance
- The cost of fuel
- Compliance with various regulations
- Vehicle maintenance/repair
One of the most common ways to start reducing your expenses is to minimize fuel expenditures.
Step 6: Invest in Yourself
Since this will be your own business, take the time to look for the best truck deal. All of your goals are achievable if you’re willing to put in the time and effort into the entrepreneurial lifestyle of an owner-operator. As for personal matters, consider the following:
- Family situation
- Driving preferences
On the Open Road
Again, you have the ability to have a successful trucking career. These steps are a simple framework for you to follow towards achieving your goals as an independent truck driver. Be sure to continue researching and networking because there is money to be made in the trucking industry and you could be the next independent truck driver living their dreams on the open road.
Do Owner Operators Make Good Money?
Generally, the revenue that an owner-operator can generate varies depending on on how they manage their business. While it is to define a specific amount of revenue, there is a list of influencers that impact how much truck drivers can make.
What influences how much an owner-operator makes?
- Obtain a CDL license
- At least two years of experience to be on a professional level
2. Type of freight haul and selecting loads
Consider what type of freight haul you would prefer to narrow down your research results. Huge impact on how much revenue you could generate
3. Payment method
The two most common ways owner-operators earn revenue are:
- Percent revenue of the load:
When an owner-operator leases with a company that already has a load board, they are then paid a certain percentage of that load. The percentage varies depending on location and company. If rates change, so do the owner-operator revenues.
- Mileage: On the other hand, once owner-operators have their loads from the load board then they can be paid per mile. Rates vary depending on what load board they are using or the type of freight they haul.
Expenses can build up over time and impact the future of an owner-operator’s business. These expenses can be fixed or vary depending on the situation.
5. How often you haul
Most of the time, the freedom that comes with being an owner-operator is what initially appeals to many company drivers. Having the ability to make decisions on your loads allows for a more flexible schedule. However, those who choose to work part-time will likely receive less income than those who work full-time.
Increase your truck driver earnings
The easiest way to increase your owner-operator income is to keep your expenses to a minimum. Expenses can be fixed or variable.
Fixed expenses –
- Truck payments
Variable expenses –
- Fuel costs
- Food and drink
- Taking care of your health (reduces healthcare expenses)
At the end of the day, being your own boss comes with the responsibility of making your independent business successful. However much you make is largely dependent on how you manage your own finances and expenses. While the competition is high, you can still achieve your goals and by reviewing the information above and committing to selling your services.