How to Start an Owner-Operator Trucking Business

Phil Cohen

red cab semi truck driving on road
truck on a road

Thinking about starting your own owner-operator trucking business and being your own boss? Before you opt to leave your current employer and that reliable paycheck, here are some questions to ask yourself and factors to consider before venturing off on your own.

1. Will you succeed?

Take a hard look at your habits and work ethic as well as other factors that will impact your likelihood of success. Do you have the dedication and motivation needed to be your own boss; will your work ethic suffer if the person you’re answering to besides your client is yourself? Consider your driving preferences, family and health considerations, and insurance legalities. If you have heavy restrictions on your time, health problems, or need employer-sponsored insurance, it may be in your best interests to keep working for your present employer and not become an owner-operator.

2. Do you have the required funds?

The state of your finances can really influence your ability to start your own owner-operator business. If you’re serious about launching your own company, you need to think about your personal budget, taxes, any debt you have, insurance, and credit. Controlling your income and expenses and planning ahead is crucial when you are your own boss. Getting rid of excessive debt is also important as it then will let you borrow money for your business and by eliminating the majority of your credit card debt, you’ll be able to decrease the amount of money you have to earn each week which can improve your bottom line. You’ll also need to have money to buy disability insurance, health insurance and life insurance. Lastly, lessening obstacles that could get your cause your credit and loan applications to be rejected could make a huge difference. Small business loans are still tight and may not always be a viable option. Look into alternative funding sources like truck factoring for owner-operators and fuel advance programs to help keep your new trucking business in operation.

3. Are you ready to be independent?

While some prefer the security and stability that comes from leasing onto a company rather than being independent, you have to consider which will be best for you. As an independent owner-operator, you’ll be able to choose your own cargo and routes. Not to mention, you won’t have to deal with strict company politics and policies again. However, by leasing your truck to another carrier, you’ll most likely have access company-sponsored fleet-rate insurance. You won’t need to obtain your own owner-operating authority and you can use a company provided trailer. Trucking companies often reimburse for things like tolls, plates and permits, so you’ll have to account for these additional costs once on your own. These factors are important to consider because they can affect your financials and your ability to make it as an independent owner-operator.

4. Can you afford the equipment needed?

You need to consider your finances when looking into buying the equipment you need; however you also need to consider age of the truck and its mileage and warranty, your area of operation, and fuel economy. The efficiency of your equipment will impact your bottom line.

5. Do you know how to perform your own maintenance?

Learning basic maintenance and troubleshooting on your truck is a good idea. Basic repairs such as fixing a flat tire or changing the oil can save you money. When maintenance issues arise, having a good foundation in basic truck mechanics will ensure you get the most bang for your buck at the repair shop.

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Phil Cohen

Phil is the owner of PRN Funding and sister company Factor Finders. He has been an authority in the factoring industry for over 20 years, serving on the board of directors for several factoring associations.

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