Is it possible to become a millionaire in the trucking business?
If there is a question that truck drivers definitely asked themselves at one point in their lives, it’s probably this one: how do I become a millionaire in trucking?
No matter the industry, no matter the time of day or the year in which we are, one thing is certain: it takes a lot of hard work, will, and discipline.
Does the big question get easier to answer if we talk about a certain industry? It does not, but I will definitely try.
The independence of the open road brings happiness to every professional driver. You don’t have anyone looking over your shoulder at work and judging your every move. You choose when and how much to work, your schedule is only for you to make.
Being a driver isn’t satisfying enough and you think of yourself as a businessman, able to put in the hard work needed to take things further. You’re also willing to put in the work needed to become a successful businessperson and, ultimately, a millionaire.
If this sums you up, then keep reading. I will try to answer one of the world’s most-asked questions, specifically tailored for an Owner Operator.
1. Love the business of driving, not just the driving
While it’s very easy to be in love with the open road and a big shiny truck, never lose sight of the fact that trucking is a business and a truck is just a tool.
The truth of the matter is that, even if being an owner-operator might seem like it makes you a maverick, free to roam the roads, the successful ones are knowledgeable, disciplined business people that are fully dedicated to their work.
The excitement of becoming an entrepreneur should fuel your desire to learn everything about trucking. You will be the only one responsible for keeping your truck, books, and business in order, along with building relationships with vendors and potential clients.
Even if it seems like a lot of work, the most important thing to keep in mind is that working harder and smarter is the key to earning more. It really takes more in order to make your dream of becoming a millionaire a reality.
When preparing your business plan, you will also need to choose which sort of owner-operator you will become. Just a few things to be mindful on:
Lease operators
They lease their tractors from a trucking company and then contract to haul that company’s freight. The advantage is that it makes it easier to get a truck and a load.
However, if you choose this path, you have to do your research carefully. The trucking company for which you’re hauling is also your lender.
You need to have a relationship with the trucking company based on a lot of trust. If you want to make a profit, they have to give you enough business.
Basically, a trucking lease operator is in fact a company driver, but with all the expenses of an owner-operator.
What does this mean? Let’s see:
- As a lease operator, you’ll have to pay all related costs for the leased truck: fuel, repairs, maintenance, fuel tax;
- Usually, the trucking company is the one that holds the title for the truck. The driver leases the truck directly from the carrier.
- More often than not, there is no down payment or amount of money required to get on board with one of these lease programs. This makes it very attractive for most people.
The whole appeal of this is that of instant truck ownership – getting into truck ownership with a minimal amount of money required as a down payment.
However, your success will not be in your own hands, but it will depend on the trucking company. If the carrier’s freight lanes slow down, they will most likely filter the freight they do have to their own company trucks before the leased trucks.
Lease-purchase operators
They either purchase their trucks independently or they lease them through a third-party leasing company and then contract to haul a single trucking company’s goods.
This arrangement offers some more financial independence, as opposed to being a lease operator. Not only that, but it offers easier access to loads than that of a self-employed independent contractor.
One important thing to keep in mind if you decide to be a lease-purchase operator is that you will need to get lots of miles at a reasonable rate. If you don’t, you might just end up making less than a company driver.
The biggest pro is that you will own the truck – meaning you can modify it and use it as you wish.
Also, you can even take a loan on the truck, trade it in or even sell it if that’s what you need.
While owning a truck sounds great, bear in mind that the insurance and repair bills are your responsibility.
Self-employed independent contractors
You are your own boss – which is where you want to be if you want to become a millionaire. Self-employed independent contractors own their equipment and book their loads. They have the freedom to choose not only the routes but the loads they drive, too.
Evidently, as a self-employed independent contractor, you’ll also have to find, price, book, and drive every trip.
2. Understand the size of the shoes that need to be filled if you are a boss
No person can deny that having one’s own authority brings an infinite number of advantages.
In the trucking business, the most obvious ones are setting your own schedule, choosing loads that suit you, and not having to deal with company politics and rules. But one needs to understand that freedom always comes at a cost. In this case, the cost is the responsibility that you will have to carry on your shoulders.
When deciding, be aware of the fact that it’s not enough to want to be your own boss – you have to think and act like a businessman. In order to get there, you need to learn… as much as you can… about everything in this industry!
Does it sound hard?
– Good. Because it is, but we are not here to break anyone’s spirits. So let’s move on with some further tips on how to make the most of your trucking business.
3. Set realistic expectations
In the words of Mac Anderson, “Dream big dreams, but never forget that realistic short-term goals are key to your success”.
This quote should be like a mantra – even if becoming an owner-operator offers the opportunity to make big money, this shouldn’t be seen through rose-colored glasses.
Like in any business, the first two years are the hardest. You should expect to lay out a lot of cash for working capital, out-of-pocket expenses, insurance, meals, oil changes, repairs, and many others.
Don’t worry, we’ll give you some ideas further along this article that might help with managing those expenses in a better way. For now, you need to understand that the best thing you can do is do a lot of research to get an accurate handle on both expected (and unexpected) income and expenses.
4. Live within your means
While this might sound obvious, spending habits and money management can make or break your success as an owner-operator.
Setting ambitious goals is great and it’s what can give you the drive and motivation to move forward. One rule to remember is you can’t spend anticipating future growth.
When budgeting, focus on year-long averages, not the best of times. This will save you a lot of trouble along the way.
In the beginning, buy or lease a truck you can afford, and set aside money for insurance, repairs, and maintenance.
Focus on savings
Don’t ignore one of the three things previously mentioned.
You might think that if you get a brand-spanking-new truck that comes with a warranty, it’s safe to assume that you shouldn’t set some money aside for maintenance. The truth is you never know for sure what is ahead and what problems might arise.
You will not have the large overhead costs that trucking companies usually have with salaries, office space, equipment that isn’t used because of lack of drivers, or even shareholders.
As an owner-operator, your expenses should be much lower. If you can be, apart from a driver, a mechanic, an accountant, and a planner, you will definitely earn substantially more.
Where the new owner-operators get in trouble is they start getting some nice settlements and start spending them.
To sum up, always keep your revenue and income expectations realistic, and budget for the slow time. Know all your costs and, most importantly, live within your means.
5. Test the waters first
When exploring the feasibility of becoming an owner-operator, don’t just jump into it. If you’ve only been a professional truck driver for fewer than three years, your best choice might be a company driver job.
This isn’t meant to discourage anyone. You can use this time to find out whether the trucking life is right for you. You can use all that time to prepare yourself for this big step of becoming an owner-operator.
A successful owner-operator business requires a lot of road time. This might affect one’s lifestyle since a lot of ‘home time’ might end up being spent taking care of business.
Ask yourself a few questions
While it’s true that owner-operators can choose to be home more, they also make more per mile for long hauling. They often decide to spend weeks at a time on the road to cover their costs and increase their earnings.
In the meantime of learning if the lifestyle of a truck driver is suitable for you, gather all the data you can.
Ask yourself:
– How many miles you can travel in a week?
– How many loads you can pick up and drop off?
– What are the regions you prefer to drive?
– Which are the regions that offer the best opportunities for growing a successful business?
– What sort of equipment you would need to accomplish your plan?
– What are the costs associated with maintenance, safety, and fuel efficiency?
This is also the best time to develop some good relationships for business. Use the time to look for future partners, like bankers, accountants, lawyers, and even other drivers.
Never underestimate how important talking about the business with owner-operators that you meet along the way is – ask them as many questions as you can!
How they got into the business, what were the most difficult obstacles they had to overcome, what it takes to be successful in the trucking business – these are some great conversation starters.
6. Invest in professional expertise
While some expenses might be deemed unnecessary, some of them are essential.
If you want to have a successful business you will need to consult with professionals on accounting and legal issues. You’ll need them to set up the most appropriate business structure for your trucking business, keep proper records, plan for taxes and also address various legal issues. You will also need a responsive and knowledgeable business banking contact.
I already mentioned earlier how important building good relationships and searching for future partners is. If you did your “homework” right, this step should not be as complicated as it might seem at first glance. You should already have the right people in mind that will advise you properly for your specific circumstances.
7. Great customer service is key
You may be a great truck driver, but never assume this is enough to please a customer.
Great customer service means following best practices like valuing customers’ time, having a pleasant attitude, and providing knowledgeable and resourceful resources. But you also need to take things a step further to exceed (rather than just meet) expectations.
Earning big bucks in this industry requires much more than just picking up and dropping off freight. As with any profession that survives on great customer service, being an owner-operator is no different. People lean toward truck companies they trust and trust is built on actions.
In order to establish a name for yourself as a reliable owner-operator, you have to make sure the loads are always delivered on time. Hence value your customer’s time and also maintain positive relationships with your customers and fleet managers.
Build business relationships
You might not think that this is important but, in the long run, you will see that certain situations will arise in which you will be the one that people count on – when you build strong relationships, you become the first call a manager makes when they have freight that needs hauling.
No matter how much time and effort it might take to position yourself as a reliable owner-operator, this will ultimately mean constant work and more money in your pocket.
Lastly, you don’t just want to build great relationships, but long-term ones with the right customers.
In doing so, you will need to know what you’re getting into before you sign, so research is fundamental.
If you think of it on a larger scale, jumping from carrier to carrier will only cost you more money. The reason you might have to jump is probably that you didn’t do enough research upfront.
8. Keeping your expenses down in order to increase your earnings
This one circles back to our fourth point a little bit – which was about living within your means. You have to be careful with your expenses and budget a lot so that you are prepared for anything that might happen. The good news is that there are a few tricks that you can have up your sleeve.
While saving money can seem like a daunting task, some readily available means can help you do that. You might have even used some of them without realizing how much money you were saving in the process. We are talking about sign-up fuel cards and loyalty programs.
Tips and tricks
Fuel card programs and various e-discounts for truckers make travel easier and, most importantly, cheaper.
There are many loyalty programs that offer per-gallon discounts on diesel fuel, as well as savings on services. Some programs even offer discounts not only on fuel but also on tires or parts.
Make sure to not only find this sort of loyalty program but also make the most out of them!
Another great way in which you can avoid making unnecessary expenses is by avoiding deadhead miles. If you want to maximize your earnings as an owner-operator, it is crucial not to deadhead.
Why would this be considered an ‘unnecessary expense’ you might ask?
If a truck is driven without transporting anything, you are just burning fuel. You paid for that fuel without making any profit to make up for it.
Not only are you burning fuel, but you are also putting wear and tear on your truck. Just make sure you are always making money while behind the wheel.
The easiest way to avoid deadhead miles is to backhaul. Backhauling is when you take loads on your return trip back to or near your home base after completing your original haul.
While it’s true that backhauls usually pay less than the typical haul because demand is lower, some pay is better than none!
To make the most possible as a trucker using backhauls, plan your route beforehand and know your round-trip rates. If you are making a substantial amount of money with your original haul, the backhaul revenue can be used for maintenance purposes.
Get this into your head: Backhauls are always better than empty miles!
9. Use technology to grow your business
Let’s not forget the times we live in – technology is all around us. So why not use it as a tool to enhance your owner-operator business?
Don’t worry, you won’t be inventing the wheel, as the technology already changed the trucking industry in the past years.
The most obvious change is load boards.
Load boards
Load boards are an online marketplace where owner-operators, shippers, and brokers can post and find loads in real time.
Using load boards makes it so much easier to make more money. You can tell brokers where you are and where you want to go.
There are many free load boards that you can find on the web – however, we recommend investing in those that come with a monthly subscription. Those are usually better as they offer more services than just load information. You will gain access to things like the best routes to take to avoid deadheading.
You might not even need a laptop in order to access load boards, since there are apps for most of them. The opportunity to make more money as an owner-operator is right at your fingertips.
Other things to consider
Evidently, finding the best loads that will generate the most revenue for your business comes with time and, most importantly, with research.
Getting higher rates on your loads means that more money is collected. In order to maximize your earnings as an owner-operator, you must minimize downtime.
Using services like load boards will help you make the needed long-lasting connections and build rapport.
10. Learn things yourself – be your own mechanic
Yes, I know how this sounds.
You might think that being an entrepreneur means you won’t have to get your hands dirty trying to repair your truck and that it’s easier to pay someone else to do that for you. While this is true, it doesn’t mean it’s cheaper.
Your focus should be on saving money and investing it where you should.
Be a continuous learner
As an owner-operator, becoming also a mechanic means reducing your repair bills, which will keep more money in your pockets. By learning how to fix your truck, you can save thousands of dollars in labor costs, but also time.
Trips to the repair shop can take a chunk of time out of your day, and repair shops can take hours to fix even the smallest repairs.
Circling back to our previous point, using technology, you will be able to learn a lot of things (especially the easier repairs) following video tutorials, as you will be able to visually follow along with someone doing the same work as you. Of course, not every repair can be made by you so it’s important to know when to involve someone who is more skilled.
Ultimately, this is your key to unlocking the treasure that is becoming a millionaire as an owner-operator.
It does not matter how new you are to the trucking industry or if you have been an owner-operator for years already.
In order to stay one step ahead of your competition, you need to continue to learn.
Connect with industry leaders and learn from them, the information you will gain from them will prove to be indispensable at a certain point. Those connections can also help grow your business in the future, too.
You will also need to continue your professional training. if you plan properly, you can do it while on the road without taking hours away from your home time.
Success in any business is not a right, but a reward for a well-executed business plan. Becoming a millionaire as an owner-operator is indeed possible, but you have to be smart and willing to work hard for it.
