Owner Operators Need to Stay on Top of Their Finances
In the trucking industry, there are two main ways to earn an income as a Class A CDL Truck Driver. The first is by working for someone else as a company truck driver. This is a solid way to earn a paycheck, but there are some drivers who more control over everything they do, what they drive, and how they operate. This brings us to the second way to earn money as a Class A CDL Driver: Becoming an owner operator. The major benefit of becoming one is that you’re in charge and the decision to go your own way is something that should be taken very, very seriously.
To see if becoming an owner operator is the right decision for you, Paper Transport, Inc. will be sharing a series about things to consider before becoming an owner operator. Today, we’ll be focusing finances.
When it comes to finances, there are two big things to think about before taking the leap to own your own truck and run your own business.
- Do you have the capital to start? In order to own your own truck, you need to invest in yourself and your business as an owner operator. That means, you need to have enough money to start your business to properly fund the lease or purchase of your truck. Other considerations include insurance (both for yourself and your business), your USDOT, and Motor Carrier Number from the FMCSA, and many other expenses.
- What about a cash reserve? Even if you have the capital to start, it’s also important to have a cash reserve to pay for unexpected things that come up when you’re on the road. Are you ready for truck maintenance or tows if your truck happens to break down? Without that extra money in the bank, you might be forced to extend your credit and that will put you in a financial hole that could be hard to get out of.
Jeff Clark, 18-year Owner Operator and contributor to the TeamRunSmart blog, shared the following thoughts with us on finances:
“It is important for an owner operator to be on solid personal financial ground when they start. An 800 credit rating is more important than $10,000 in the bank. They should have the capability of obtaining bank financing. Too many owner ops start out with a poor credit score and become subject to predatory lending. They are about 95% likely to fail.”
As you can see, finances are a big thing to consider when becoming an owner operator. At PTI, we have many regional or dedicated opportunities that offer consistent freight and weekly pay. If you own your own truck that’s a 2000 model or newer and you’re interested in our program, please call our recruiting team at 1-855-784-5627, email them at email@example.com or visit our owner operator page.
Check back next week where we discuss Knowing Your Skill Set in our series Things to Consider Before Becoming and Owner Operator.