Table of Contents
Thousands of truck drivers and couriers criss-cross the United States while making other people rich. They are good at what they do, competent behind the wheel and deliver their freight on time and intact. In this they take pride. Still, the paycheck is not all it should be given the time and effort expended. When the owners rake in the lion’s share of profit, the driver is left wondering if the long hauls are worth it. It is times like these when the prospect of being an owner-operator is most appealing. Understanding the rules of success and failure is paramount.
Do Be Sober: It’s Not Just for Driving
A driver must be sober to protect legal liability, commercial driver’s license and, well, life and limb. An owner-operator must also be sober, i.e. go into business with eyes wide open. Entrepreneurship is alluring, especially when the idea of more money and independence looms. Yet instant prosperity is a pipe dream for most O/Os. There are always inputs and expenses that surprise new owners — fuel price hikes, higher insurance premiums, truck maintenance and repairs. No longer an employee, an owner-operator loses certain labor law protections, as well. Reading up on the business and talking to seasoned O/Os keep newbies from getting intoxicated by the potential benefits.
Do Spend Wisely: Living Better…Later
Upfront outlays of capital are high when starting a trucking business. New O/Os are sometimes bitterly surprised when they run out of money. The key is to remember that revenue comes before expenditures. It takes time to build a customer base, and that source is not always reliable in sending jobs to the new company. Carefully budgeting the income against the financial demands–including establishing a fund for emergencies–requires the owner-operator to cut back on conveniences; invest in a more modest vehicle; and favor the cab over pricey hotels, among other things. Most importantly, factoring for owner operators benefits from doing without…for now. Why? Keeping spending modest puts the O/O in a better position to secure a factoring company and get unpaid invoices off the books. It also reduces the temptation to take on less reliable customers whom factors will view as liabilities. In this way, minimizing spending can maximize income.
Don’t Incur a Negative Credit History
Those owners that follow the above should–in most instances–keep their credit scores acceptable. Opening lines of credit should be done for the purpose of emergencies and unforeseen financial demands. All the same, some entrepreneurs do everything right and still find their credit records tarred by wrong information, identity theft or medical collections. Most of these can be avoided by regularly checking the credit report and clearing up errors.
Don’t Fall to Illness
Especially at the outset, O/Os can not afford too many sick days. Eating right, exercising and getting adequate sleep are essential to assuring consistent productivity and customer service. Clients need calls returned and orders filled on a timely basis. Otherwise, the competition gets hired.
Granted, these rules of thumb are common sense but they can be overlooked in the press of getting a new business off the ground. While a successful O/O can enjoy independence, sovereignty and a larger cut of the revenue, they must pay their dues up front.