Home » Career Advice » Professional Development » 8 Things You Need to Know if You Want to Be a Truck Owner Operator

Truck owner operator

8 Things You Need to Know if You Want to Be a Truck Owner Operator

Last Updated on August 6, 2024 by Career Reload Team

Do you enjoy seeing a massive but elegant rig slide down the road? Don’t they look fantastic on their magnificent mission, transporting all the various goods you can imagine? Have you ever imagined truck drivers as special forces working for the benefit of all of us, like some superheroes? If you think about it, they are. And if you’re one of them, congratulations! You’re making a difference in this world, and we thank you.

According to the American Trucking Association, over 38,9 million trucks on the USA roads work for over 1 million trucking businesses. Suppose you’re driving for the company, getting your salary on time, and being ok with how things are. Then you should probably skip this post. On the other hand, if you’re a company driver but have ambitions to become independent, you’re in the right place! Or, if you’re interested in learning more about the trucking industry like we are, stick with us, and we’ll give you a few hints on what a career as a truck owner-operator requires.

Here’s a list of eight top factors to check out if you’re considering becoming a truck owner-operator:

  1. It’s a life-changing decision
  2. Decide how you’re going to run your business
  3. Get all the necessary documents
  4. Buy or lease your truck
  5. Buy insurance
  6. Don’t do your taxes yourself
  7. Have funds for rainy days
  8. Everything is your responsibility

Let’s go over each one so you know what to expect on this exciting new trip called being a truck owner-operator.

1. It’s a life-changing decision

Like when starting any business, becoming a truck owner-operator requires a lot of research and reconsideration of whether you’re ready to take a leap of faith and become a business owner. It’s specific because it’s not just a career change you’re about to enter but a whole new rhythm of life. If you have a family, ensure they’re okay with you being absent many days a year. And also, reconsider: Are you ready for such a sacrifice? Be prepared to take everything on your back, at least for the first three years, because that’s the first critical period, and if you survive it, it’s more likely your business will succeed.

2. Decide how you’re going to run your business

Now that you’ve decided to get into this adventure, the first thing to decide is how you will run your business.

You can choose from these four most popular business ownership options:

  • Sole Proprietorship
  • Partnership
  • Corporation
  • Limited Liability Company (LLC).

A sole proprietorship is an excellent place to start if you plan to expand only a little. As its name says, it’s a type of business where you do it solo or as the only person in charge, and your liability is unlimited. What’s wrong with this option is that it’s connected to your personal assets, and if anything goes wrong, your personal assets might be at risk. If you’re into sharing responsibilities but also the profit, consider getting into a partnership.

Like a sole proprietorship, your personal assets are tied to the business, but there are more of you, so any debts or expenses can be shared between the partners. You don’t have that burden with these other types of businesses. Corporations allow you to separate your personal and business assets. Also, the tax you pay is according to your business’s profit. And you can add as many stakeholders as you like and receive funding from investors. But they’re sharing the profit with you too, and it’s mandatory to have annual meetings with them and to keep a well-documented and organized business structure. An LLC (limited liability company) can be a perfect solution as it combines all of the above.

The company’s members can file taxes similar to those of a sole proprietorship or partnership, listing them on their personal tax returns. There can be more company members, but there can also be only one. The main advantage of this kind of business is that there are no personal assets connected with it; you’re only accountable for your business assets. That’s what limited liability stands for. Many solo proprietors convert to LLCs after a while because the risk they’re taking is so much smaller. Of course, before deciding what type of business to start, find a good tax advisor, attorney, or accountant and hear what they say.

Truck operator

3. Get all the necessary documents

Before starting your own business, you must get all the necessary documents. You’ll make money by driving, so you’ll need a CDL – a commercial driver’s license. You may already have one if you’re working as a truck driver for the company. Also, you’ll need to pass a medical exam and get the “DOT card,” usually valid for about two years. This means your health is significant for this job, so be self-aware and take good care of yourself (not just for the work’s sake). After legally registering your business, you can apply for a U.S. DOT number. This number registers the company with the Department of Transportation. Also, to get this number, you’ll need an insurance policy. We’ll talk about it a little later. Besides all this paperwork, you’ll have to pay various fees, which differ from state to state. For the most recent prices, contact the relevant government organization.

4. Buy or lease your truck

Owning at least one truck, for starters, is, of course, essential. There are two options to choose from – to buy or to lease. If you have enough funds to buy the truck and support your first year in business, go for it. But consider that you will have to finance all the repairs and maintenance. And you’ll lose money on depreciation costs. If you choose to lease, having funds in your bank account is also essential for the down payment, but you’ll have a few benefits, like no hidden costs, such as taxes, and no depreciation cost. Also, if you choose a full-service lease, you’ll have most of the truck maintenance covered, like oil, tires, and routine inspections.

5. Buy insurance

Whether you’re leasing or owning the truck, insurance is necessary, not just because the law requires it. It’s a must for any business, especially a high-risk one like trucking. Being on the road is a risk in itself, and especially if you expand and hire other drivers, you’ll never know what might happen or how good drivers they are. Insurance is a way to make your life easier and put less worry on your mind. In today’s market, you can choose from various insurance companies that are available in all US states, and depending on your needs, you can choose what’s best for you. For instance, with CoverWallet, you can get coverage tailored precisely for your specific business and easily calculate your quotes online. Also, it supports and works with small and medium enterprises and startups.

With The Hartford and Sentry, you can get good deals for fleets if you have one. Progressive offers various discounts and reliable digital tools but limits the fleet size. Before deciding the best solution for you, thoroughly research and compare all the different insurance offers. Additionally, explore the benefits of fleet management tools like Fleetio’s free vehicle inspection form to streamline maintenance processes and ensure your vehicles remain in optimal condition. Make sure to consider other offerings, customer feedback, and the specifics of your business.

6. Don’t do your taxes yourself

We all know that starting a business or a new career can be overwhelming with all the new things you must deal with. Even experienced drivers face new obstacles, and it’s stressful. Above all, you want to save every penny you get and consider doing the paperwork and taxes yourself. We strongly advise you – don’t. It may look like an easy job, but sooner or later, you’ll understand why there is a whole occupation called – accountant. Hiring a good accountant will give you more time for everything you’re good at – taking care of your business and getting more routes. Also, research and hire someone specialized in what you need – trucking businesses. They’ll be more informed on all the specific regulations, and if any changes in laws do happen, they’ll be the ones to know.

7. Have funds for rainy days

Having the funds to start your new business is essential, but having some savings for rainy days is equally important. Remember that bad things happen, and in this industry, they can cost you a lot of money. Every truck malfunction costs money, and some can be very expensive. So, it’s better to be financially prepared for every outcome than to have your business suffer or even lose your vehicle. Start that habit now if you’re not used to having a rainy day fund.

8. Everything is your responsibility

As we mentioned before, when starting to be your boss, the side effects are – everything is now on you. You can decide on your working hours and workload, but you’re also responsible for making your business function. It means you have to take care of all the steps of the work, from getting contracts with more prominent trucking companies to scheduling and on-time delivery. If anything happens that distracts you from your goals, it’s also your responsibility. Maintaining the truck is one of them too.

Make sure you’re prepared for all the ups and downs

Now that you know more about this career, reconsider whether you’re a good fit. Every new start is complex, and making your way into the trucking industry is hard, but the benefits are rewarding. Being a truck owner-operator requires good self-preparation. It means being prepared for life on the road, separated from friends and family. You must care for yourself because nobody will step in for you if you get sick. At least in the beginning, when you’re the only employee. This kind of sacrifice is not for everyone, and it’s more vital that you’re true to yourself and self-aware than to face your new career failure. Take all this into consideration and make your decision. Either way, we congratulate you for taking one step forward on your life’s journey.