5 Ways to Succeed and Fail as an Owner-Operator
The pressure is on as an owner-operator – you’re excited to own a business, earn more than ever and venture outside of the employee comfort zone, but there is much, much more to manage and plan for.
It’s important to establish the right routine, structure and spending discipline that will help your business grow, rather than the opposite.
Many owner-operators develop bad habits at the start of their careers that stay with them and end up affecting their business negatively, sometimes to the point of failure.
Although the business can be highly rewarding, it takes careful planning, a business mindset, discipline, and organization in order to reap the highest profits possible and minimize losses.
Below are 5 ways you can fail as an owner-operator, all of which you should avoid to keep your business running smoothly:
Owner Operators Fail by Choosing the Wrong Truck
There are few decisions that will impact you as much as your choice of truck. From your repair costs, to your potential downtime, to your monthly payment, fuel efficiency, warranty coverage and more, this decision has far reaching implications.
Making the mistake of buying a lemon, not doing your research on a particular model, buying the wrong specs for the type of loads you want to haul (too much or too little engine power), or buying without plenty of advice can cost you heavily once something goes wrong.
2. Owner Operators Fail by Letting Debt Pile Up
Sure, you might be getting to the point where you are bringing in plenty of revenue each month, but it can all be negated if you are piling up your expenses on credit cards and neglecting to pay them off. Starting your business off with large debts will make it even harder to keep your balances low.
Credit cards serve an important role for owner-operators as they allow access to initial capital for a variety of different upfront expenses, along with an easy way to track expenditures, but they should be paid down as quickly as possible. Put as much of that big check right to your credit card bills as possible before you give into the temptation to splurge.
3. Owner-Operators Fail by Trying to Do Everything Themselves
Any successful business has a smart team behind it. As an owner-operator it’s not just you versus the road, you need a great accountant, lawyer, and experienced mentors who can guide you along the way and show you the best ways to operate your business efficiently and profitably.
4. Owner-Operators Fail by Not Saving for a Rainy Day
Unexpected expenses pop up in any business, from maintenance issues to major repairs, downtime when you aren’t working, illnesses and more. If you don’t have a rainy-day fund of 6-12 months of expenses, you need to start working on one.
Live within your means and keep your personal expenses to a bare minimum if you need to build this fund up, but do it as quickly as you can. You never know when you might need to break the bank, and if you don’t have the option available, it can add a lot more headaches to an already bad situation.
5. Owner-Operators Fail by Neglecting to Take Care of Themselves
With all the minor things you have to manage, the long hours, and the heavy workload, it can be easy to forget about your own health and exercising.
This is always a mistake, and it could cost you a lot in the future, compared to the small amount of time and effort it takes to manage your health proactively. Find the time in your schedule for regular exercise, avoid the temptation to eat junk, and keep your health as a top priority along with everything else.
Avoiding the above-mentioned mistakes is a must. But, just as importantly, you’ll need to establish some good habits that will drive your business growth.
5 Tips to Help Succeed as an Owner-Operator
1. Owner-Operators Succeed by Treating it Like a Business
It’s easy to want to shut out all the distractions and fall in love with the work itself, but that won’t get you very far as an owner-operator. Of course, you enjoy being on the road, but you’re in this to make more money than ever, and everything that you do should move towards that goal.
Whether it’s making sales calls, carefully tracking your expenses, or cutting waste from your monthly budget, you’re in business now and it should be treated that way .
2. Owner-Operators Succeed by Networking and Branching Out
If you want to avoid working with a contractor company, you’re going to have to network to get contracts, and that means going to industry events, trade shows, conferences, picking up the phone, and building up a list of contacts. That list you build up is going to become a major asset for you – something you’ll be able to rely on for work in the future anytime you need it. Focus on building long-term relationships, not just getting loads for the short-term.
3. Owner-Operators Succeed by Budgeting Carefully
Work with your accountant to identify what your expense budget should be for the next 3-6 months in order to build your business to a profitable level. Look for ways to cut expenses down such as limiting the amount of times you eat at restaurant or using a fuel card to get additional fuel discounts.
4. Owner-Operators Succeed by Preparing for the Future
Failing to plan is planning to fail, and that holds true in the trucking industry perhaps more than anywhere else. Have a fallback plan for when things go wrong, whether it’s having enough savings for several months of expenses, an emergency repair fund, and even a sales strategy with different ways to drum up more business if work starts to slow down for you.
5. Owner-Operators Succeed by Continuing to Learn and Grow
The process of growing and learning as an owner-operator should never end. Attend trucking events and expos, learn from industry leaders, and stay on top of technological trends. GPS, trucking software and vehicle technology is always evolving, and you should keep up with it all. Find skilled, proven mentors and spend some time picking their brain and getting feedback on what you might be doing right and wrong.