How to become an owner-operator: 7 steps to take
September 08, 2022
Estimated reading time: 4 minutes
Making the switch from company truck driver to owner-operator truck driver is a big decision. Becoming an owner-operator comes with a lot of added responsibilities, including owning or leasing a truck (and in some cases, a trailer), running your own business and deciding what loads to take and how often you want to be out on the road.
For company drivers with the experience, knowledge and desire to start their own business, we put together a list of seven steps on how to become an owner-operator.
Owner-operator startup checklist
1. Understand what an owner-operator is.
The best place to start is to ensure you know what an owner-operator does and how they differ from company drivers. Owner-operators make daily decisions about things like:
- How to run their company.
- What freight to haul.
- Whether to lease-on with a carrier.
They also take responsibility for taxes, licensing, insurance and operating expenses.
As they grow, many owner-operators lease or own multiple trucks and trailers and manage a small fleet of their own drivers.
2. Ensure you have enough experience.
If you are going to lease your business to a carrier, you’ll have to meet some owner-operator requirements, which usually include experience. Even if you’re going to operate under your own authority, it’s not a bad idea to run as a company driver to learn the ins and outs of the industry first.
As an example, Schneider requires at least six months of truck driving experience before someone can lease-on as a Van Truckload, tanker or drayage owner-operator.
3. Determine if this is really the career path you want to follow.
Transitioning from a company driver to a trucking company owner is a life-changing decision. You owe it to yourself and your family to consider the decision before buying or leasing your first truck.
Try asking yourself some of the questions below to make sure becoming an owner-operator is something you truly want and should do:
- Do I have the finances available to become an owner-operator?
- Do I want to become an owner-operator for the right reasons?
- How will becoming an owner-operator benefit me (and my family)?
- Do I want to operate under my own authority or lease on with a carrier?
- What kind of freight do I want to haul as an owner-operator?
- If I lease-on with a company, what regulations or requirements will I have to follow?
- What will this do to my time at home, and how will time at home affect my earnings?
4. Understand the costs associated with running a trucking business.
How much it costs to be an owner-operator varies based on the kind of truck you operate, the number of miles you put on and how you run your business. Some of the biggest expenses you should expect as an owner-operator include:
- Truck payment.
- Truck maintenance.
5. Know how to generate revenue.
As an owner-operator, your goal will be to generate revenue. While the obvious way to generate revenue is by hauling freight, there are many other ways to make money owning a semi-truck.
Before making the move to business ownership, consider the following:
- Decide how hard you want to run your business.
- Understand what type of freight works best for how you want to operate.
- Research what types of trucks are available for purchase or lease, and which one would work best with your business goals.
- Consult a tax accountant and/or attorney for financial and legal help.
- Learn how to use Excel spreadsheets to manage your finances.
- Think through how you are going to get loads.
6. Decide if you are going to lease or purchase a truck.
As an owner-operator, you’ll have a few options when it comes to the truck you operate. Some of the most common include:
- Purchasing a brand-new truck from a dealership.
- Purchasing a used truck from somewhere like Schneider Trucks.
- Leasing a new or used truck from a place like SFI Trucks and Financing.
7. Be sure to get proper documentation.
Before you can head out on the road as an owner-operator, you’ll need to obtain the right documentation, including:
- USDOT/MC (motor carrier) number – Can be obtained through the U.S. Department of Transportation.
- Trucking insurance – Talk to the company you lease-on with for more information on discounts you could take advantage of.
- HazMat endorsements – Learn more on the TSA’s website.
- PrePass – Purchase on the PrePass website.