Are you tired of driving for a company? Are you planning to become an owner-operator? If yes, then you are in the right place! This article will cover the eight most important steps to be a successful owner-operator.
Let’s be honest for a minute: the stats are horrible. The failure rate of owner-operators is through the roof. 5.5 out of 10 US drivers WILL FAIL in their first year as an owner-operator. Why? Dealerships ripping you off, banks taking too big of a cut, poor time and money management, the list goes on.
Here are those eight essential points to remember before stepping in to be an owner-operator.
Truck Purchase was Made Wrong:
Most rookies get fascinated by the power and looks of the truck while buying it, which is not all necessary. Planning what type of loads you will move and which route you prefer should be the basis of understanding your business. We would suggest working backward, 1st have a plan, and then buy a truck that suits your agenda.
Buying an elephant is easy but maintaining them is a difficult task. The same goes while purchasing a commercial truck! A higher interest rate can rip you off and put you in a cash crunch.
· 18-19% – Damn too high.
· 11-14% – Mid range.
· 9-11% – Lowest possible.
Finance Agreement Duration:
While financing your truck, either new or old, having an interest rate of 15% and above for a longer duration will not save any buck in your account.
Unreliable Truck-fuel Consumption:
The most important criteria one should look for while buying a truck are how reliable it is, its reviews, the road performance, and how many miles it goes per gallon? Understanding these numbers can help to predict your profit margin.
Poor money managing skills:
Time is Money, and both are important while focusing on building a fleet of the logistics chain. Dedicate your time and watch the growth in your trucking business. Don’t buy fancy stuff for your truck. Please keep it simple, invest in the development of the quality services provided by you.
Not Enough Money for Reserves, Maintenance, and Repairs:
Maintaining a 500-horsepower truck is a responsible task. Scheduled maintenance is a must; otherwise, you can risk breakdown and run out of business while still, you have monthly bills to pay for.
Don’t Be Owner-Operator when You Have Debts:
Operating a fleet comes with the massive responsibility of maintaining a regular cash flow. If breached, you will end in a cash crunch and start facing glitches for a smoother operation. Be financially prepared!
Lack of Experience:
Just been a couple of months into trucking, and you are thinking of being an O-P? Not a significant step to establish a strong business in the market. Take your time, understand how the market works, cost per mile, logistics-chain, brokers, dispatchers, shippers, and many more trucking terminologies. The best advice is to drive for a company, understand the business, and then make an entry.