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Is Being an Owner Operator Worth It? 10 Things to Consider

If you’re a truck driver or considering becoming one, you might wonder, “Is being an owner-operator worth it?” Like so much in life, the answer is, it depends. Being an owner-operator means freedom to choose your own loads and schedule your own time, to make as much money as possible, and to be your own boss. But there are also some pretty big responsibilities, from writing a business plan to covering start-up costs. It’s important to consider all the pros and cons before making up your mind.

Person with crossed arms leaning again the side panel of a truck.

Is being an owner-operator worth it? 10 things to consider before making a choice.

Deciding to be an owner-operator is about more than money. While company drivers only need to worry about getting their loads to the right place at the right time, successful owner-operators have to think about the entire business side of their operations. Is it worth being an owner-operator with your own business? Only you can answer that based on how you feel about these top 10 considerations.

1. Financing

Do you have solid cash reserves? Owner-operators are never guaranteed a paycheck, so you’ll need to have enough money to carry you through any downtimes. How will you pay for your equipment? Is your credit score high enough to get a loan? What about the down payment? Can you afford the payments for a few months while you’re getting your business off the ground? Also, keep in mind that even once your truck is rolling regularly, there can be some lag time between when you finish a run and when you actually get paid for it. Can you afford to float that money and keep working while you’re waiting for payment?

2. Experience

Though it’s possible to become an owner-operator as a new driver, it’s not usually the best idea. Things go wrong on the road, from difficult routes to maintenance issues to shippers who don’t pay on time. Company drivers have the support of their carrier when issues arise, but owner-operators have to figure it out on their own. The more experience you have, the better prepared you are to deal with whatever the road throws at you.

3. Niche

What types of freight (or equipment types) do you plan to work with? What are the average cost-per-mile rates? Before going out on your own, you need to “know your numbers.” This means understanding where you fit into the market and both the average rates and the typical expenses you can expect. Of course, there’s nothing wrong with using tools to help. You can check rate data for different load types with the Truckstop.com Rate Estimate feature.

4. Scheduling

A huge advantage for owner-operators is that you are free to set your own driving schedule. If you want to take a day off to watch your child’s graduation or two weeks off for your dream vacation, it’s no problem. Whether you like being on the road most of the time or at home every weekend, you can create the schedule you want. Of course, you’ll still need to follow the government’s hours of service (HOS) laws, which specify how many hours you can be on the road without a mandatory rest break.

person holding calculator while making notation on a clipboard.

5. Expenses

As an owner-operator, you’ll need to pay attention to all the different expenses involved in your trucking business. Truck payments, maintenance costs, fuel expenses, even food and drink on the road can add up fast. Make sure you have enough cash flow to cover them while maintaining your profit margins, and be sure to keep detailed records for tax time.

6. Income

Owner-operators can generally make more money than company drivers. Exactly how much you’ll make depends on many factors, including what types of freight you carry and which certifications you hold. But remember, you’ll also have far greater responsibilities than a company driver. In particular, you’ll need to worry about taxes. Instead of having them withdrawn from your paycheck, you will need to put aside money yourself to pay them. You can claim a lot of deductions, but only with the right documentation.

7. Insurance

In addition to truck insurance (and possibly business insurance, depending on how your company is set up and where you live), you’ll also need to find health insurance and cargo insurance. Try the national health insurance exchange at Healthcare.gov, and consider purchasing Cargo Insurance for “all risk” coverage.

Aerial view of trucks parked in a lot.

8. Competition

Although it can be an incredibly rewarding career, the trucking business is competitive. Especially now, with supply chains squeezed and driver numbers down. There are upwards of 400,000 owner-operators in the U.S. competing for the same jobs. 

9. Liability

Liability is always a huge concern for any business owner. What happens if you’re in an accident while carrying a load? What if you drop a box during unloading or damage someone else’s property? Liability insurance can help protect you, but you’ll also need to choose a business structure that minimizes your personal risk. This is complicated and has tax implications, so consider talking to a business attorney and a CPA before setting up your company.

10. Contracts

Unlike company drivers, owner-operators aren’t assigned loads and routes. You’ll need to find loads and negotiate contracts to keep your truck rolling. Brush up on your negotiation skills before you become an owner-operator! You can find loads in different places, including signing up for overflow loads from local carriers and working with a load broker, but both options have some things to consider. For example, overflow drivers often get the difficult loads and routes that company drivers don’t want, while load brokers charge fees in exchange for help with legwork and rate negotiations.

Find the highest paying loads.

Being an owner-operator carries a lot of responsibility, but there are many rewards. If you’ve considered all the pros and cons and feel like it’s the right fit for you, start finding loads at the highest rates with the Truckstop.com Load Board. You’ll have access to the highest-paying loads along with features to help you make the best decisions on which loads to accept. Get a demo today.

 
 

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