11 Steps to Becoming an Owner Operator
When it comes to becoming an Owner Operator, there is no such thing as being too prepared. Here are 11 standard steps you should follow when it comes time for you to make the switch and become an Owner Operator.
1- LLC Formation – regardless of what your plan may look like, if you want to become an Owner Operator, the first thing you need to do is form your LLC. As it says in the name, a Limited Liability Company business entity will limit your liability as an Owner Operator on the road.
2- Accounting Plan – Will you be running your own books, or have someone else do this for you? Either way is perfectly acceptable, but going on the road knowing you have a plan for this will make a world of difference when you start making money.
3- Authority Application – Trucking authority, also known as operating authority, is the permission given by the Federal Motor Carrier Safety Administration (FMCSA) to transport freight as a motor carrier. Having your trucking authority is necessary to transport freight across state lines.
4- Credit Repair & Business Training – Just because you’ve been in a driver’s seat for 15 years, doesn’t mean that you know how to run a trucking company. In trucking, there will always be unforeseen issues that arise, and it will be up to you to handle the problems while maintaining a business.
5- Truck & Trailer Shopping & Financing – What do you need to buy? Where do you begin your search? How much can you afford? Should you buy used or new? All these are questions you need to be asking yourself as you begin your search for your new “office.”
6- Insurance & Extended Warranty – Because issues are bound to arise sooner or later, and you need to know how to react and respond appropriately as a business owner.
7- ELD/E-Logs/Cameras/Lawyer – Get everything in place that you will need to protect yourself from potential issues, lawsuits, and for overall compliance records. You’ll thank me for this later.
8- Compliance & Safety – If you do get pulled over, your books need to be clean. There’s no such thing as being too safe when it comes to compliance.
9- Website & Marketing Prep Plan – Not only will this set you apart as a professional in the industry, but it is overall very important when it comes to gaining trust from whoever is on the other end of the phone.
10- Fuel Cards & Factoring Company Selection – Fuel cards (also known as fleet cards) are unique payment instruments designed to help trucking companies save money on the cost of fuel and maintenance as well as monitor their workforce’s spending. Freight Factoring is when your company’s accounts receivable are converted into cash by selling the freight bill of lading or outstanding invoices to a factoring company. Instead of waiting for 30, 60, or even 90 days for a load to be paid out a factoring company will get you that money now, for a service fee, of course.
11- Load Source Plan – Whether that’s going to be yourself, direct from the shipper, from a broker, or a dispatch company, it is always a good idea to hit the road knowing you have a plan in place to get you back home after you drop off.
Written by:
Tim Griffin
Director of Marketing & Media, C.L. Services Transport
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