Working as an owner-operator in the trucking business can be a very lucrative enterprise. It can also be one fraught with financial problems. The difference is all in management. Probably the biggest mistake business owners typically make is failing to manage costs appropriately. They may either fail to recognize all the costs associated with the enterprise, or they may fail to budget properly for those costs.
Trucking is certainly no exception. It seems like a pretty straightforward business: Buy or lease a truck, keep it fueled up, haul freight, get paid. But of course, there is much more to it than that. Capturing all the expenses involved in operating your enterprise is essential to making it profitable, so review all the various financial elements of it before starting.
This is perhaps the most likely area to be overlooked. Most owner-operators chose the vocation because they love the work, not the paperwork. The same is true of restaurateurs, contractors, and mechanics. But the reality is that the job is not done until the paperwork is done, and trucking is no exception. It can be very difficult to do not only because of the skills required but also due to lack of time and the fact that you’re on the road instead of in an office. The folks who ship with you use a detailed process to manage their freight. You should too.
Many truck owner-operators use a service to take care of all these matters for them. This can range from establishing a trucking authority with the Federal Motor Carrier Safety Administration to invoicing, licensing, permitting, and much more. These services provide expert performance in a fixed office while you focus on getting loads delivered, which is especially important when it comes to getting paid for your work.
There is a considerable expense associated with being a driver. Although you’ll have a sleeper cab, you’ll still have to think about daily showers and an occasional night in a hotel to get a better night of rest. We also don’t want to forget meal time!
As an owner-operator, you may view this component as something that you’ll do as cheaply as possible while you’re building the business. This strategy is fine as long as you are the only driver, but as the company grows and you have to hire others, it will be imperative that you make sure there’s enough in the budget for the driver to be properly clothed, lodged, fed, and bathed. Without those provisions, you can run afoul of labor laws, to say nothing of quickly losing good workers.
The final area where many owner-operators often mismanage is in fleet upkeep. Even though your “fleet” might be just one rig, it’s your bread and butter, so you have to invest in keeping it roadworthy.
We often focus on the essentials, such as fuel and tires. This is especially true when money is tight and it seems like an unnecessary expense to put a mechanic under the hood of a truck that’s running perfectly fine. The fact is that maintenance is one area where you can pay now or pay later, and later will cost more in addition to throwing prolonged downtime into your schedule.
Go the extra mile so that your truck can too. Get brakes, fluids, belts, hydraulics, and bearings checked, not just for presence but the condition. Your radiator may be full, but the antifreeze could be dirty and headed for trouble.
There are few things more appealing to truck drivers than peering out the windshield of trucks they own. For many of them, nothing is less appealing than ending the day with a stack of bills they can’t pay. With good planning and the help of some outside experts, owner-operators can get the best of both worlds, traveling the highway in a reliable vehicle with enough cash flow to keep current on expenses and live the dream they pursued when they first got the keys.