Four Things to Consider Before Becoming an Owner Operator

You know how to handle your semi truck. But do you know how to run a business? This is an important question if you are considering becoming an owner-operator. Becoming an owner-operator requires a serious commitment, and not just from you, but also from your family. Here are four things to consider before becoming an owner-operator.

Get your CDL and start driving

Words of wisdom from experienced owner-operators: Get your CDL before you try to purchase a used semi truck, and whenever possible, drive for someone else for a few years to gain experience before you go out on your own. This initial experience can help you greatly, both in terms of driving experience and knowledge about the trucking industry.

Build a credit history

Creditors look at your credit history, your driving experience and your sources of income when you apply for a loan, and being solid in these areas will help you obtain your first truck. If you currently have no credit history, build one. Instead of always paying in cash, save that cash in your bank account and apply for small, easy-to-get loans. Then, pay back your loans on time or ahead of time. Each time you successfully borrow and pay money back, you strengthen your ability to get your next loan.

Save for the down payment and initial expenses

In order to purchase your own commercial truck and be an owner-operator, you will need to have money in the bank, both for the down payment on the truck loan, and for your initial startup expenses.

Down payments

Depending on your credit history and experience, down payments for semi trucks can be 10% to 30% of the cost of the truck. If the used truck you are buying costs $50,000, the down payment could be as much as $15,000.

Initial Expenses

Start-up costs to get a used semi truck on the road can easily be $5,000 or more. Costs like sales taxes, insurance, registration fees, IFTA taxes, highway use taxes, inspections and other fees are all required when you begin your trucking business.

Educate Yourself — Start Getting Help

There are companies and organizations that can help you. The National Minority Trucking Association, for example, offers training and guidance. You can visit their website, minoritytruckers.com, to learn more. Seek out classes, and begin to educate yourself on running a trucking business. Additional resources include Owner-Operator Independent Drivers Association, Used Truck Association, American Truck Business Services and Team Run Smart. Search the web to find additional ways to learn about the trucking industry, and especially about used semi trucks.