Trucking is a staple of the American landscape of commerce, but an owner operator trucking business can find success anywhere in the world today. With general freight trucking being in demand on a consistent basis, the average trucker as an owner operator can earn an average salary of over $40,000 per year. Top operators are able to earn more than $150k annually.
Although this kind of business has you out on the road consistently, the job is rather straight-forward. You drive your truck from Point A to Point B and deliver an item. You then repeat the process as often as possible so that your business can become profitable. It all begins with your ability to earn a commercial driver’s license [CDL]. A CDL is required for you to drive most trucks that are in an owner operator trucking business.
You will need to complete a training course to obtain your CDL. Many communities offer options that will provide this service for $500 or less. Once you have the license in-hand, you’ll be ready to start hitting the road to earn a potentially substantial reward.
Is an Employment Contract a Good Option?
You may find that there are commercial trucking schools in your area right now that are hiring owner operators. If you don’t have the money to pay for your CDL that involves commercial trucking, then an employment contract with a trucking agency makes a lot of sense. These agencies will often pay for your schooling in exchange for the future work that you will do for them.
As you look at your CDL options, you will also need to consider obtaining certain endorsements on your license that can make hiring you more appealing. If you have an H endorsement on your CDL, for example, you’ll be able to deliver hazardous materials. Extra endorsements typically help you command higher salary levels, which means you make more money on every trip.
Do You Have a Business Plan In Place?
Just because your business is pretty straight-forward doesn’t mean that you shouldn’t have a business plan in place. When you have a course of action to follow that will help dictate how you generate revenues, what expansion plans you might want to put into place if business gets good, and how you’ll manage expenses, you will be able to manage your money wisely.
A good business plan has vision. Plot the course that you plan to take for the next 3 years at minimum. Having a solid 5 year plan in place is a good idea. Make sure that you include all of the goals you wish to accomplish as an owner operator into these business plans you draw up. Having a mission statement will also help you navigate the sometimes murky waters of business that can creep up.
Are You Planning on Hiring Employees?
When you earn money in the United States, you need to have an identification number. If you are a solo owner operator, then your business is classified by the Internal Revenue Service as a sole proprietor if you haven’t incorporated it. This means your personal business funds are mixed together. It simplifies the returns, but exposes all of your finances to risk if you have a bad accident where you are at fault out on the road.
Having a separate business identity to protect your personal finances is a good idea, but that means you’ll need to obtain an employer identification number and file as an LLC or as a corporation. These each have added costs to them and the right choice depends on your specific circumstances. You will want to consult with an attorney and your tax advisor to determine which course of action is the right one to take.
Once you’ve taken care of all of this, you’re ready to purchase a truck.
What Kind of Truck Should Be Purchased as an Owner Operator?
There are a number of trucks that are available today in multiple designs and styles, so the best choice is to select a truck that will help you achieve the goals that you put into your business plan. Certain hauls may require trucks with certain capabilities and if you plan on carrying two or three trailers at a time, there may be certain restrictions or endorsements required as well.
If you have a solid business plan in place and can show a lender that you’ve got customers already contracted for work, you’ll have a better chance of obtaining funding for your truck. Getting the funding secured before shopping for the truck is often a good idea. You’ll also want to make sure that you have proper insurance on your vehicle and general liability to add another layer of coverage for your business.
Promote Yourself When You’re Ready to Go
You may wish to open a business checking account and if you’re operating under any other name than your own, you will need to register your business name. Having an administrative office can help to promote your business, but social media and other traditional advertising methods can help you get this done as well. In the trucking business, your reputation matters. The best way to market yourself is to be reliable.
As you grow your owner operator business, you may find that your contracts require you to purchase more trucks or hire employees. You will need to repeat the financial steps for each purchase and you will likely need to setup withholding accounts for taxes unless you hire independent contractors for your trucking runs.
An owner operator business is something that can help bring a lot of success your way. If you love the open road and want to make money doing something for which you have a passion, then a trucking business could help you create a salary that can provide you with a comfortable standard of living. Follow these steps today and you’ll create a business that makes you very proud.