There are several considerations to take into account when deciding whether or not to become your own boss, so let’s get started.
- Experience and level of dedication
- Expenses associated with owning your rig
- Family and home time
Experience and Level of Dedication
So, how much driving experience do you have? Plan on being a company driver for a minimum of 2 years just to learn the ropes of the trucking industry. Most successful O/O’s worked as company drivers for 10 years or more before making the jump. Are you consistently on time to appointments, or do find yourself calling your consignee’s to notify them of how late you’ll arrive? Evaluate your dedication to your profession before making a large investment in your future. Truck drivers who have figured out how to operate efficiently make the best O/O candidates.
Your biggest consideration will be your expenses. As a company driver, your truck payment, fuel, maintenance, insurance–everything, was paid for by your employer. Their truck, their bills. As an O/O, you will be responsible for those payments, and they add up quickly. Start by researching the difference between a new truck payment vs. a used truck payment. This is your biggest monthly expense (assuming you can’t buy your rig outright). In addition to the expenses mentioned above, you’ll also want to set up an emergency fund short-term emergencies requiring cash. Make scheduled contributions to this account. Be smart. Ever had a trucking mishap? How about an accident? If you’re out of commission for a while, your disability insurance will cover your truck payment. Don’t risk depleting your emergency fund. By the way, how’s your credit? Check your credit report for inaccurate information and clear up any errors. Know your credit situation before you apply for a truck loan. Are you a saver, or a spender? Get used to saving if you want to be successful as an O/O. Some of the old pro’s recommend having $75-100k in the bank AFTER you purchase your truck. Take it seriously.
Single, or married? Kids? The amount of time you can spend hauling loads will often be determined by your home situation. If you like to run hard, you’ll have no problem meeting your financial obligations, but, over time, you may compromise your personal relationships. The amount of home time you can afford to take is a balancing act that usually requires sacrifice, if you have a family. If you’re single, you’re golden (barring any previous marriages with negative financial outcomes).
Tracking every aspect of your business is vital to your success. You’ll need a professional tax accountant, preferably someone who knows something about the trucking industry. Most Owner/Operators file their taxes every quarter. Their taxes are complicated and require a professional touch to avoid getting sideways with the IRS. Don’t leave this task to an amateur.
These are only a few aspects to consider when deciding whether or not to be your own boss. So, I’ll close out this article by providing you with a real world example:
A friend of mine became an Owner/Operator in January of 2014 after 13 years as a company driver and driver trainer. He’s a flatbedder driving a 3 year old KW out of Denver and his routes are regional. Wife and 3 kids at home.
His week begins at 6am Monday morning and ends at 6pm Friday evening. He goes home every weekend. During the week, he’s never more than a state away from Colorado–unless he requests to be ($$$). For that commitment, he earns $16-20,000 a month his first year as an O/O. Roughly $200,000/year. That’s his gross pay.
After factoring in all of his expenses–and that incident with a bull moose in the middle of the snowy road near Steamboat Springs–he’ll take home $90,000. Year two will be a bit better because he sat down with his accountant and discussed the areas that could be tweaked in order to become more efficient.
If you are seriously considering becoming your own boss and want to learn as much as possible about how to do so, find a successful O/O and pick their brain.