Tips To Become A Successful Owner-Operator
There are several things to consider if you desire to start a trucking business and the decision must not be taken lightly. Every truck driver dreams of owning a huge transportation rig and hitting the road to earn big bucks. Being an owner-operator brings freedom, independence, and profits. Click here to understand more about why truckers do not desire to work as company drivers.
Working Capital is needed
Truck is the first big investment for starting a transportation business. Obviously, you can lease your rig from a financing company, but it is vital to have the funds for the down payment. A substantial upfront payment will keep the monthly payments for the equipment lower and more affordable.
If you go for no or a small upfront payment, then paying big amounts every month can be challenging. A good amount of working capital is needed for a start-up to pay for fuel, insurance, oil changes, meals or unexpected repairs.
Keep backup money, because even new rigs can break down and downtime can kill your business. If you are thinking of using credit cards to pay for these expenses, then make budget allowances for paying them. Long term use of credit cards can easily bang your owner-operator career.
Bad Credit Rating Requires Determination
Getting in transport business with a poor credit or debts is challenging because obtaining the initial capital is made that much more difficult. However, there are finance companies that provide bad credit truck financing. Basically, your habit of money management will be one of the main factors determining the success of your trucking business.
Legal, Accounting and Business Advisers
Sound and solid professional advice when you are making the decision of starting a transportation business is essential. Do not just enter this type of business because you see money pouring for other truckers. Actually, what worked for one trucker may not be appropriate for you, right?
It is also wise to have professional legal advisers and expert accountants to assist you in critical decisions related to business structure, income tax returns, record keeping and variety of legal issues.
Be Ready for a Long Period of Financial Commitment
If you sign a lease contract, then for a certain future period of maybe even years, you will be committed financially. Therefore, think carefully before closing the deal. Here are some considerations and questions to answer:
- Will you get a used or a new truck?
- How much can you afford?
- Determining fuel economy in relation with used and new trucks is a vital factor; even an extra couple of miles to the gallon means a big difference to truck owners
- Make sure to specify a rig properly
- If you select an underpowered engine to save money, then the engine will burn prematurely, due to overwork
- If you select an over specified rig, then you are spending unnecessary money on purchase time
- If your aim is to go into a short-term business, avoid buying your own truck because there are hold back funds involved
- What are the consequences of not fulfilling the contract conditions?
An owner-operator needs to be hard working, patient, and determined. They can build a successful career with smart decision-making and proper planning, even in this unstable economy.