When you have your own trucking authority, you are just as much of a business owner as you are a truck driver. There is a lot more to manage that you previously didn’t have to as a company driver. Your ability to manage your new business will determine whether or not your trucking company will be able to survive. Let’s take a look at a few of the major responsibilities that come with being an owner-operator managing your own trucking company.
Manage Clients
Managing the clients you work with will be critical. As an owner-operator with your own trucking business, nobody will tell you what you need to haul and where you need to deliver it. It will be up to you to create a consistent flow of work in order to keep your company profitable. It’s important for you to make new customer relationships and maintain them with hard work and good communication.
An online load board is an important tool to help you find new business. There are a variety of free and paid subscription options available for you to choose from. When initially choosing a load board, keep in mind your budget and the reputation of the load board you want to use.
Once you’ve found new customers, you will need to focus on maintaining good relationships. You can do this by planning your route and keeping a consistent schedule. This way you will be able to stay busy with work while being reliable for your customers. If anything happens that takes you off of your schedule, communicate all details with your customers to stay on good terms.
Manage Expenses
As the owner of a trucking business, you need to focus on the money that is going out just as much as the money that is coming in. It’s important to keep good records of all your company expenses to make sure your company isn't losing money. If your expenses outweigh your income, you will need to change the way you manage your business in order to continue running under your own authority. ATBS can help you manage expenses by working with you to build a profit plan and by providing monthly profit and loss statements to help you stay on track.
Major expenses that you’ll face as an owner-operator include fuel, insurance, food/drink, and your truck. We go into detail on all of these expenses in our “5 Biggest Owner-Operator Expenses” article. There will also be sporadic one-time, and unforeseen expenses that you need to be prepared for. We recommend you keep an emergency savings fund to help manage these unexpected expenses.
Over time, you will become better at managing the expected and unexpected expenses. Once you have an idea of how much you spend each month, it will be good for you to come up with ways to operate more efficiently to lower the cost of these expenses. It will be at this point that you will truly be managing your expenses.
Manage Fuel
As mentioned earlier, fuel is one of your biggest expenses as an owner-operator. However, fuel is an expense that you have the ability to manage more than your other major expenses. Even though you can’t control the price of fuel, you’re able to control how much fuel you are using.
In our article, “Top 20 Ways for Truck Drivers to Improve Fuel Efficiency” we give many ways to help you save money on fuel. A few of the easiest ways to improve your fuel efficiency are:
Monitor Tire Pressure
Minimize Idling
Moderate Braking
Manage Cruise RPM
These are changes that you can make immediately to help better manage your fuel. Keep track of your fuel expenses before and after you try a few of these tips and see how much your fuel bill decreases. Compared to other expenses like truck payments and insurance, you don’t have to sacrifice much to pay less for fuel.
Manage Health
Managing your health often goes overlooked when managing a trucking company. You are the most important asset of your trucking business and if you aren’t healthy enough to drive, then your company isn’t going to be able to make money.
The combination of sitting for long periods of time, eating junk food, and not sleeping well can lead to a multitude of health problems. Fortunately, there are plenty of ways to improve your health:
Whenever you are stopped for the day, get out of the truck to move around and exercise
Consider cooking for yourself rather than buying cheap fast food
Give up smoking in order to improve lung and heart health
Drink plenty of water to avoid getting dehydrated
Get plenty of sleep the night before to avoid drowsiness behind the wheel
As an owner-operator, you don’t get sick days. Any day that you aren’t on the road is a day that you aren’t generating revenue. Of course, there will be days when you are too sick to drive, and that will be out of your control. Try to limit your days off the road to days when you are truly sick and can’t drive.
Manage Taxes
One of the biggest differences between a company driver and an owner-operator is the way taxes are paid. As a company driver, your taxes are automatically taken out of your paycheck by your employer. When you have your own trucking company, you are responsible for calculating your taxes due and paying the correct amount each quarter.
It’s important for you to keep an accurate profit and loss statement of your company in order to pay the appropriate amount of taxes each quarter. ATBS recommends you set aside 25%-30% of your weekly net income for quarterly estimated tax payments. Not paying quarterly tax payments will result in penalties that will increase the amount you will eventually have to pay. If you don’t manage your taxes, your company will begin to fall behind and it will become increasingly more difficult to get caught back up.
Owner-operators also have to fill out different tax forms (and often more complicated forms) than company drivers. As a company driver, you will most likely only fill out a W-2 form. When you manage your own trucking company, you now have to fill out a W-9 and you will receive a 1099 from anywhere you earn income. You will then have to file Form 1040 and likely additional schedules, which becomes significantly more complicated. Paying taxes on a quarterly basis and filing a different type of tax return are major differences between being a company driver and managing your own trucking company.
Need help managing your trucking company?
If you need help managing your trucking company, consider hiring ATBS to help you out. ATBS has been in the industry for more than 20 years and has helped over 150,000 owner-operators. We offer a variety of services including accounting, bookkeeping, and tax preparation, specifically for truck drivers. We also offer unlimited business consulting for our RumbleStrip Professional clients. If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827.
