How to Become an Owner Operator: An Algorithm to Follow
The ultimate goal of any business is to deliver products to the end-user. The globalization drive that is symptomatic of modern civilization has led to the expansion of the companies' reach and consequently to the rampant growth of consumer audience. As the surge in the number of consumers is only likely to enhance, ventures will find it increasingly hard to keep up with catering to the needs of this vast pool of customers. And this is where owner-operators can lend a helping hand.
Meet an Owner Operator
Typically, enterprises address big freight companies to transport goods for them to different destinations. These companies can deliver any volume of cargo wherever you want. But their capabilities have a serious limitation, and that is inflexibility. Big companies are usually quite a cumbersome mechanism that lacks the immediacy of reaction and prompt adjustment to unexpected challenges.
Smaller agents who both own their logistic business and drive the truck themselves (aka owner-operators) are more flexible in their day-to-day activities and have a greater degree of freedom concerning their working routine. It means the ability to select any orders they are comfortable with, flexible working hours, and customized vehicle and other equipment tailored to fit all ergonomic requirements of the driver.
Moreover, having been in the industry for quite a time, we at Ezlogz know that there are considerable financial perks for companies that commission the services of owner-operators. Their moderate rates come from the self-employed nature of such entrepreneurs. Since they keep everything they earn, owner-operators can fine-tune their pricing policies for each particular project. Besides, all related expenses (including insurance and taxes) are defrayed by them as well relieving the customer of this headache and burden.
Owner Operators: All in the Day’s Work
What are the jobs that owner-operators can be engaged in? Conventionally, an owner-operator is Jack of all trades. Their first and foremost responsibility is managing their own business. It presupposes registering and controlling expenditures, scheduling workflow activities, and maintaining their truck and other machinery in order.
In addition, truck owner-operators find clients to transport goods for them acting as a contracted party or an independent one-and-done agent. To do that they search for jobs at specialized boards for businesses in need of transportation services, through personal contacts with the former employers, or using any other channels to cinch an assignment. The search becomes easier if the owner-operator has a contract with a company that sends them shipment orders as soon as there is anything to deliver.
On getting a commission, an owner-operator either runs errands personally or assigns logistic tasks to drivers employed by them on a permanent basis or for this assignment only.
How to Launch Your Business as an Owner Operator
Being your own boss free to make your life choices has always been a part of the American Dream, yet it means taking maximum responsibilities upon oneself too – both for the venture you are embarking on and for the people who work with you side by side. Armed with this awareness, you should approach the future career of an owner-operator with utmost care. What should you do to become one?
Step 1. Size up Your Position
Ask yourself some questions about your future occupation. Are you competent enough in this sphere to start a business of your own? Do you realize all the hardships of the trade (being away from home and family for long spans, driving your truck for many hours on end, etc.)? Are you physically fit for this kind of job? Do you have sufficient seed capital to kick off? Do you have a wide circle of contacts in the industry to last you for a time until you find new clients?
By giving passionless answers to these questions you will see whether becoming an owner-operator is your cup of tea. A tip: if you have worked in this field for less than three years, it is better to peg away as a truck driver first to get the necessary experience.
Step 2. Study the Lay of the Land
It is wise to collect intelligence from professionals in the realm – both fellow owner-operators and other related specialists, such as small business runners or tax experts. Their experience and pieces of advice can furnish valuable information about what the career you have chosen has in store for you.
Also, it is vital to pick a comfortable model of your future activity. By leasing onto some trucking company you will get a constant inflow of transportation orders but it will hamstring your flexibility a lot. A possible trade-off is a totally independent operation. It is likely to generate greater profits but it will require searching for customers on your own.
Step 3. Receive a CDL (Commercial Driver’s License)
If you have a regular license it won’t do. It should be a specialized document called CDL. To get one you should be 21 or older, have a conventional driver’s license, pass a road skills test, and obtain a specific permit with subsequent completion of a CDL training program.
If you are a seasoned CDL driver, make sure your certificate is relevant for the type of cargo you are going to transport (for instance, a hazmat endorsement appended to the CDL to be able to carry hazardous substances).
Step 4. Get Other Licenses
CDL is not the only document you must have to become an owner-operator. The two basic numbers for any freight driver to have are the one from the US Department of Transportation and a motor carrier one. If your logistic routes are going to cross state borders, an interstate license is also a must. Since there is a lot of red tape involved in obtaining these licenses, you should apply for them well before you actually start to work.
Step 5. Obtain Trucking Insurance
Your paperwork routine isn't over yet. You should have insurance to cover possible damage to the cargo, other vehicles, or loading facilities that may suffer in case of an accident. Typically, primary and general liability insurance for legal operation in the industry will do but, to be on the safe side, you should consult a specialist in the sector.
Step 6. Acquire Necessary Equipment
Your truck may not be enough to cater to all needs of your customers. If they want you to carry outsized loads you will need specialized equipment or a trailer. Any of them can be either purchased (in which case you should find a low-interest loan) or taken on lease. The latter option may come at an additional price of doing some jobs for the equipment owners. A possible alternative is a lease-to-own model when you can use the leased machinery until you partially or entirely pay off its cost to become its owner.
Step 7. Peruse Load Boards to Find Orders
These are an invaluable source of information on companies who have some freight to deliver and are looking for drivers to do it. The latter are typically paid by the load percentage or by the distance to carry it. Modern digital technologies offer a wide scope of such boards – from websites to apps. You are to pay to use some of them whereas others are free so make sure which one you are dealing with.
Step 8. Aim for Cost Reduction
There are several life hacks that can help you cut down on expenditures:
- Augment fuel efficiency by driving at a consistent speed that is as close to the speed limit as might be.
- Maintain your equipment in a satisfactory state of operation to save on repairs.
- Choose the shortest and fastest routes that begin a stone’s throw from your destination.
- Keep idling to a minimum by opting for roads with limited traffic.
The owner-operator is an attractive job niche that can help you direct a steady flow of revenues into your coffers. By employing specialized software you can considerably streamline your workflow and facilitate efforts aimed at providing high-end logistic services.