Starting your own trucking company as an owner-operator is a great way to become your own boss while potentially making more money in the process. Although the median annual salary for heavy vehicle and tractor-trailer drivers is $43,680 (BLS, May 2018), Payscale notes the average salary of owner-operators in the industry to be around $97,000. The potential higher income may be enticing, but becoming an owner-operator is not as easy as just buying your own truck.
What it Takes to Succeed
To start your own company and be successful, youâ€™ll need experience, capital, and skills.
Because you need at least two yearsâ€™ experience as an OTR (over the road) driver, most owner-operators start their truck-driving career working for a company. Whether working for yourself or someone else, youâ€™ll need a commercial driverâ€™s license (CDL) to become a truck driver. Having experience with another company also helps you gain insight into what it takes to run a trucking company.
There are also other ways you can start out in the driving industry, including as a bus driver, highway maintenance technician, construction equipment operator, or a tractor-trailer technician. Technician and vehicle maintenance jobs are particularly helpful if you want to be an owner-operator. Knowing how to service your own vehicle, or what might be wrong with it when you have problems, can save money and time.
Thereâ€™s no escaping the fact that starting your own business requires money. Some up-front costs are:
- Purchasing your own truck
- Truck maintenance and servicing
- Class-A CDL, DOT Motor Carrier (MC) number, and authority through the Federal Motor Carrier Safety Administration (FMCSA)
- Accounting and business software
- Insurance costs
- Typical on-the-road costs for the first set of load contracts, such as fuel, food and drink, and truck servicing
Beyond these initial costs, you will need back-up savings in case anything goes wrong. The upside of these initial costs is that you will eventually make them back and, if your business is successful, will earn a solid income beyond them. Plus, because youâ€™ll be operating your own vehicle, youâ€™ll save money by not having to pay other drivers in a fleet. All earnings you eventually make will go back to you and your business.
While being a good driver is important, owning and operating your own company takes skills beyond that. Here are some other skills that can help you succeed in running your own business:
- Entrepreneurship: Youâ€™ll need to be able to turn your ideas into action. Entrepreneurship involves understanding risk while staying optimistic and motivated to make your business work.
- Leadership: Whether youâ€™re the only employee or you seek to expand to a larger fleet of vehicles and drivers, you need leadership skills. These include confidence, drive, curiosity, focus, and ambition.
- Management: As an owner-operator you manage your own business, so you need to understand the various elements that go into running it. Youâ€™ll need to know how to find business, what it takes to carry out your contracts, and all other pieces of the puzzle that make your business run.
- Business-savvy: Youâ€™ll need to create a system and structure that ensures your investments lead to increased profits and business growth.
- Industry knowledge: In particular, you need to know whether thereâ€™s a market for your work where you want to operate. This knowledge comes from understanding the industry, its needs, and how you can fill them.
- Flexibility: Because market needs ebb and flow, so does business and income. Youâ€™ll need to be flexible and open to a changing market, and factor those changes into your business plans.
- Strategic thinking: Operating your own business is a long-term endeavor, so thinking strategically about the futureâ€”for yourself and your businessâ€”is essential to long-term success.
Pros of Being an Owner-Operator
There are some great aspects to being an owner-operator:
- Youâ€™re your own boss: This is one of the most compelling benefits because, essentially, you can make your own rules. You own the truck and can create an environment that works for you and your lifestyle.
- You have control over your income: While becoming an owner-operator doesnâ€™t always guarantee youâ€™ll make more money than a driver, you can have more control over what you earn. You can choose to take on more work to make more or slow down if youâ€™d prefer a lighter schedule.
- You have control over your equipment: You can customize your truck to your liking. You spend so much time on the road. You may as well make it as homey or personalized as possible.
Cons of Being an Owner-Operator
Some challenges of being an owner-operator include:
- Start-up costs: Up-front costs can be pretty substantial. Launching your own business requires a lot of planning and saving.
- The pressure of running a business: It can be stressful to run your own business because you bear all the responsibilities, such as booking loads, managing expenses, and servicing equipment. High levels of responsibility can increase stress.
- There are no guarantees for success: Even if you do everything right, thereâ€™s no guarantee that your business will succeed. Many outside factors could come into play, including economic or market shifts.
- There are high risks involved: All small business ventures come with a degree of financial, safety, legal, and other risks. Because youâ€™re operating a large vehicle, all responsibility ends with you, the owner-operator.