How to Become an Owner Operator Truck Driver
Running your own trucking operation is an attractive career path with a great many benefits and advantages. But how to become an owner-operator truck driver?
Take a look at our guide and learn all about the steps to becoming an owner-operator truck driver.
The First Steps: Understanding Your New Career
Before you begin to build your owner-operator truck driver business, there are a few things you need to consider.
- Is this the right career path for you? If you love driving and logistics, the answer to this question is likely to be yes.
- Are you willing to strike out on your own? It can take time to recoup your initial investment as an owner-operator truck driver. Bear this in mind and prepare for the potential stress and anxiety of running your own business.
- Do you have the necessary pre-qualifications? Before you obtain your commercial driver’s license, or CDL, you will need a clean standard driving license and no outstanding legal judgments.
- Are you aware of the expenses you will encounter? Ongoing truck maintenance, insurance expenses, and applicable taxes are just a few of the costs you will encounter as part of running your new business. Be prepared to meet these expenses and understand their impact on profitability.
- Are you committed to your new career? If you run your owner-operator truck business in the right way, you will experience great rewards and ROI. However, this requires commitment, so make sure that you are ready to devote your time to this goal.
Getting Started: the Practical Steps to Becoming an Owner-operator Truck Driver
In order to begin your career as an owner-operator truck driver, you first need to obtain your commercial driver’s license. This is an additional license to your standard driving license that permits you to operate heavy goods vehicles or vehicles with cargoes that have been registered as hazardous. The CDL represents your first major step towards running your logistics business.
Part of the CDL application process involves a Department of Transport physical examination to assess your physical fitness. You will also need to select the right type of license for your business model, as different types of commercial vehicles require different license levels.
Understand Owner-operator Truck Driver Expenses
An effective business starts with an effective business plan. Review your finances and get on top of all the expenses you will meet in your first 12 months of operation. Think about owner-operator truck driver expenses, such as the equipment you need, as well as insurance and general living expenses.
Building a strong trucking operation takes time, and it is likely that you will not begin to see proper returns on your investment until at least a year into your new career. This may take even longer in some cases. Understanding your finances and formulating a plan will help to protect you from the risk of bankruptcy.
Bear in Mind Owner-operator Truck Driver Tax Deductions
As you formulate a business plan, remember that many of the expenses involved also count towards your owner-operator truck driver tax reductions. Equipment costs, maintenance costs, and other expenses can be subtracted from your annual tax bill.
It is important to remember this point, as the savings you will make on your tax payments will make it easier to properly plan your business’ future.
Build Your Set-UP
You will need a substantial amount of equipment to make a success of your owner-operator business. Of course, the truck itself will be the primary expense here, and you should take time to select the right vehicle to support your new business. Consider what kind of cargo you will be carrying and the kind of routes you will be covering.
Stick to your business plan and your budget when building your equipment set-up. If you find that your original research and estimates were wildly incorrect, you may need to go back to the previous step and create a new business plan.
Register Your Business
The CDL is the starting point for your license and registration as a commercial truck driver. Depending on the state you operate in, you may need to obtain other licensing before you can carry cargo out on the road. The Department of Transport in your state or jurisdiction will help you understand what licenses you require.
You will also need to register your business. It is likely that your owner-operator business will cover several different states, but you will need to register your business in the state your headquarters is based in. You may decide to headquarter your business in your own home to save on costs, but you will still need to register this as your place of business.
Decide your Career Path
As an owner-operator, you may decide either to operate under your own authority or lease to a company. There are a number of advantages and disadvantages to each option.
If you decide to operate under your own authority, you will be responsible for finding clients and developing your operations. You will also enjoy more flexibility and freedom as you run your business.
Leasing to a company will make it easier to find the loads and contracts you need to build your business, but you will be dictated to by the terms and conditions of the company you lease to. Give both options the appropriate consideration and decide which business model best suits you and your short- and long-term plans.
The decision you make in the previous step will also dictate which insurance you need. If you decide to work with a company, this organization may be able to provide some of the insurance you need. If you decide to operate on your own terms, you will be responsible for all insurance yourself.
Different states and jurisdictions will have different insurance requirements. It is important that your insurance covers you across all of the different areas you plan to operate in, providing comprehensive legal compliance and complete peace of mind.
Plan how You Will Connect With Jobs
Finding loads to carry and jobs to take on is a key part of your work as the owner-operator of a trucking company. You can use online load boards to help you find loads from freight brokers. This is an effective means of finding the jobs you need to build your business.
As you develop stronger relationships with clients and customers, you will find it easier to find the loads you need to secure a return on your investment. You may even find that you need to expand your operations to fill the demand.
Reach Out to Logity Dispatch and Start Your Owner-operator Business Off in the Right Way
Here at Logity Dispatch, we can help you get your owner-operator business up and running smoothly. Reach out to our team today to find out more.