There are considerations which a long haul truck driver must make as to if they want to become an owner operator. One aspect that's captivating is owning your own truck, being the boss and choosing any loads and routes that you want. But it comes with the bolder independence which bears loads of burdens, expenses, and some risks. So, will moving the owner-operator be of any greater benefit? In this article, we will try to sum up advantages and disadvantages to let you make an educated choice.

The Benefits of Owner-Operator

• More Control As with almost every official profession, the major reason why people choose to become an owner-operator is freedom. When you work as an employee driver, dispatchers and time can be a great cause of stress. By owning your truck, you dictate the loads that you wish to carry, the specific routes that you want to follow, and the time management practices that you wish to utilize. For some, the ability to schedule suchwork around prior engagements or only concentrate onload that would give decent financial returns is an impressive drive.
• Higher Earning Potential It is widely held that owner-operators make more money as compared to company drivers. Since you negotiate your own rates and do not have to apportion any profits with a company, your income ceiling is higher. You can select high paying lanes and specialized cargo that could bring in higher return. Nevertheless, it is essential to take note that whilst gross income may be higher, owner operators have to cater for all the costs that are incurred on the truck and business (more on that below).
• Asset Ownership In contrast to company drivers, for whom an employer drills a truck, owner-operators own their truck, which can be very expensive. Over time, owning your truck outright (when it is fully paid off) means greater parts of your earnings will be retained.

Moreover, having your own truck carries with it prospects of business expansion. Most owner-operators will ultimately go into small fleet ownership where they employ drivers to work for them.

The Challenges of Being an Owner-Operator

• Substantial investments on acquisition and continuous maintenance There are negative aspects associated with truck ownership which include significant disadvantage of owning your truck. Some may argue this is a factor that comes with being an independent owner operator business and that new semi-truck leasing does have some negative aspects that can be eliminated. Also, the operational costs are very high. Fuel, insurance, maintenance, repairs, and other expenses add up quickly. Employment as a driver for the company does not involve these continuous expenses, which also imply that a huge portion of your earnings will always be taken towards truck servicing and maintenance.
• All operational issues of the company have to be managed by the owner operator The owner operator is still considered as a driver but they are also very much involved as a businessman. This means that you will have to wear many hats that includes but is not limited to bookkeeping, taxes, load searching, contracts, etc. While some may relish this sort of freedom, to others, it becomes too much. Inspections and analysis on recent pending familial matters, hosting functions, recording expenses and income followed by preparing a budget to control spending can be time consuming, which is quite inevitable in business setup, when the main source of revenue is driving itself.
• Income Volatility The most dreaded factor as an owner-operator is the risk of income fluctuation. Market conditions, fuel prices, and the need for trucking services can, and do, change from time to time. In off-peak seasons or emerging market conditions, demand for freight services may lessen which leaves the owner-operators grappling with low incomes or no incomes at all. Furthermore, unforeseen stalls and troubles with the truck will also mean loss of precious earning time. On the other hand, a company driver gets a regular paycheck from employment. In other words, owner-operators expose themselves to more financial risk, especially when the weather is unfriendly.
• Long-Term Commitments Any loan or lease on a truck that is signed by you will be a guarantee for several monthly payments for multiple years in a row. These payments must be made no matter the conditions in the market be it favorable or not. In a case where the market for trucking declines, you will be under great pressure trying to pay the expenses when a company driver would be least bothered about expenses.

What Kind of Driver Should Consider Being an Owner-Operator?

An owner-operator involves the perfect balance of freedom and control, though only qualified, seasoned and business-oriented drivers who are not averse to financial risk can enjoy a wider scope of earnings than usual by creating this whole new work situation for themselves so if you are one of those, here are a few signs that you may be cut out for owner operator. 1. Experience in Trucking. Trucking is not a new business for you as you already have been in the industry for years and know quite a bit about how the trucking procedures, regulations and operations work. 2. Financial Stability. You are able to afford the down payment for the purchase of a truck, and in addition, you also have a financial safety net for costs like repairs or other such relative downtime.

• Understanding of Business: You appreciate the non-driving aspects of trucking which include developing proposals, controlling costs and paying taxes.
• Need for Independence: You get things done on your own initiative, follow a schedule, and enjoy managing your own time, routes and work.
• Risk-Averse: You are open to fluctuations in earnings and acceptable of the stress involved in operating a small business.

What if You Prefer the Stability of Being a Company Driver?

On the other hand, if an entrepreneurial outlook, fixing trucks and an uneven income is not for you, then being a company driver can be much more suitable. Company drivers are receiving regular salaries, additional healthcare benefits, as well as permanent employment without needing to pay for the mortgage of a truck or its insurance.

Briefly, company drivers lose their independence for security and less distress, while owner-operatives gain freedom at the expense of increased financial burden and extra work away from the travel.

Is It Better To Be An Owner-Operator?

In terms of core objectives, it is up to you to determine whether or not being an owner-operator is considered as beneficial. However, if you feel like taking up the complexity of operating a business with all the risks involved while earning more money and having greater flexibility, it can be a fulfilling career choice. But if you are comfortable getting regular payments without the stress of paying for the truck, holding on to an employment or company driving may be the best for you.

Considering the advantages and disadvantages of each option will help you make the most appropriate decision regarding your trucking career.

Note: For more information, visit IRS website