1) Owner Operator 411 - Welcome

  2001 Kenworth T600

Becoming an Owner Operator

1) Welcome to Owner-Operator 411

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operato
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

2) Income and Expenses 
3) Financing and Credit
4) Operating Authority or Leasing? 
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards 
8) Companies That Lease Beginning Owner Operators  
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

This is the place for owner operators to gain information and tips about starting a business. It probably will be most useful for the beginner owner operator, but old-timers should find it useful, too. This is not the place to be (or the job to choose) if you want to get rich quick. If you want to do that, you need to learn how to hit the lottery, make money online, or have a rich relative die and leave you a lot of money – or anything as long as you don't have to work, because as a small business owner you will have to work - hard.  Driving a truck and being an owner operator can be rewarding and satisfying in a lot of ways and you will learn about that in future blogs. So check back often and see what you can learn about being an owner operator and about the trucking industry.

I often get asked, "Is it hard to become an owner operator?" The short answer is "No." Just buy a truck and start driving.  The real question should be, "Is it hard to become a successful owner operator?"  The answer to that questions is "Yes."  There is so much a person needs to learn and it is a lot of hard work - both mentally and physically.  So read on and see if you still think this is what you what you want to do!  

 Some of the things I will be writing about are: Income and Expenses; This will cover the difference between gross and net, and an overview of what can and can not be deducted.

Financing and Credit; I will explain the basics of getting a loan, and what to do if you have debt problems. I will be telling what you need money for in addition to the truck itself. I will talk about business plans, and the importance of credit reports and FICO scores.

 Operating Authority or Leasing?; There are two kinds of owner operators – those with their own authority and those leased to a company. This will explain the difference and advantages and disadvantages of each.

Equipment; This section will cover the equipment an owner operator needs in addition to the tractor and/or the trailer. It will explain necessary and optional equipment. Equipment can be something as expensive as an auxiliary power unit (APU) or as inexpensive as a screwdriver.

Miscellaneous; I will be listing resources, definitions, and anything else I think might be helpful or informative. I will try to do all this in a simple, easy to understand way, with a little experience, and (I hope) humor thrown in to make a boring subject a little less so I hope to give you enough information so you can make an informed decision about starting your own business, for that is what you are doing when you become an owner operator. You aren't just becoming a truck driver, but a businessperson.

Maybe after reading this, you will decide to not to become an owner operator, but a company driver instead-- or maybe even find another profession.   Two of the main reasons a lot of people say they want to become an owner operator is: to make a lot of money, and to be their own boss. As I stated earlier, you will not make a lot of money, and very few people are their own boss. Sure, you have more freedom to make decisions when you are a tractor trailer owner operator, but everyone has a "boss", of one sort or another.  Mainly, those in long haul trucking has the shipper as their "boss".  The shipper tells you when they expect a load to be picked up, when it is to be delivered, under what conditions it is to be shipped (tarped, refrigerated, on an air ride trailer, etc.).  If you don't follow through in a professional manner, you may get a second load, but you probably won't get a third. You may be thinking, "Well I am going to lease to a company, I don't have to worry about that." You would be wrong.  Your company may be the one giving you the information, but it is the shipper who has the ultimate say.

 My next post will be: Income and Expenses  Be sure to subscribe to this blog to get the latest and newest information.

Interactive Cost per Mile (CPM) Calculator to Aid the Owner Operator

How Much Does an Owner Operator Make?

Interactive CPM Calculator 

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Privacy Policy 

 
1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

To use: Just fill in the boxes on the lower part of the chart. The results will automatically fill in the boxes on the upper part of the chart. Depending on what you enter, the results can give you your Cost per Mile, Cost per Day, Income per Mile, Income per Day, Expense per Mile, Expense per Day, Net per Mile, Net per Day, Average Miles per Day and your Expenses to Income percentage.

You can enter actual amounts if you already have a truck (useful when doing your taxes, too), or you can play around putting in different figures to see "What If?", as in "What if I paid off my truck?" or "What if the price of fuel goes up (or down)?" 

If you are wanting information about becoming an owner operator, you probably want to know how much much it will cost you to get started, and how much money you will make, or even if you can make money if you buy your own equipment.

These are all good questions that need answered before you take the plunge and spend all that money on a tractor trailer rig. I have developed a Cost Per Mile (CPM) calculator to help you answer these questions.

After you get a good grip on your initial outlay, this calculator will help you with the numbers you will need to write a business plan for when you go to the bank to get financing.

These are questions no one can give you a dollar amount on. It depends on many factors and variables (see previous posts). You need to determine how much you will be paying for your truck, find out how much your insurance payments will be, and find out how much loads pay at the company you want to lease to. You need to figure in all expenses, including Miscellaneous (paper towels, glass cleaner, etc.). 

Enter these amounts in the spreadsheet and you will get a rough answer to the questions above.
 
If you are thinking of getting your own authority, then this spreadsheet will help you determine how much you would need to charge to haul each load.
 
You need to talk with other owner operators (see “Income and Expenses” post). You need to determine what you will be hauling, and to where. You need to find out approximately how much these loads pay. If you are going to lease to a company, you need to find out what expenses they will pay and what expenses you will need to pay (taxes, permits, etc.). Do they pay a fuel surcharge?
You need to get a rough estimate of what other expenses you will have: truck/trailer payment, licenses, permits, insurance, cell phone, accountant, etc.
What else are you going to have to buy? Will you need tarps, chains and binders? What about straps or load jacks and hand tools?
 
If you don't even know what some of this stuff is, then you need to ask more questions and talk with more drivers.   Be sure to ask your questions in the comment section.
 
You need to determine about how many miles a year you will have to run to deliver the loads the lease company contracts for, and how many days you will be on the road.
 
After you get all of these numbers, then it is time to use the calculator.

Be sure to subscribe to this blog to get the latest and newest information.
 
I am interested in knowing if you found this calculator useful.

Please CLICK HERE to open, not on the chart below. Interactive CPM spreadsheet by Google (Will open in a new window):

/


Please note that by clicking on the above link, you will leave this blog and enter docs.Google.com The information that Google collects and maintains as a result of your visit to their web site may differ from what I collect and maintain (see my Privacy Policy).