Becoming an owner-operator is a dream for many company truck drivers, but the process can seem daunting if you’ve never been self-employed before. Buying a truck and maybe a trailer is an important part of the process, but it is also one of the easiest. You have to fill out paperwork to make your company legal and either sign a lease with a specific company or find work through brokers or on your own. You will also need to buy a truck and a trailer if you won’t be leasing a trailer through the company who supplies your work.
There is way more paperwork to keep track of when you are an owner-operator than when you are a company truck driver. You have to obtain your own commercial truck insurance and USDOT number. You also need to register as a business with the state you live in. You may want to sit down with an accountant or a friend who is an owner-operator so they can help you decide whether your company will be a sole proprietorship, an LLC or a corporation.
Once you have been given a USDOT number, you will need to display this number on your truck, along with your company name and the city and state where your company is based from. You can get your own operating authority if you choose, but it is not necessary to have your own operating authority as long as your trucks are leased to another company who you are hauling loads for. Many owner-operators suggest that drivers who are switching from being company drivers should lease a trailer from a well-known company and haul for that company for at least six months before getting their own authority and being responsible for getting their own loads. If you are against being leased to another company, you can rent a commercial trailer until you are ready to purchase one.
As an owner-operator, you will be starting your own company. This means that you will be responsible for following all rules set forth by the Federal Motor Carrier Safety Division, including drug testing regulations. You will be required to be a member of a drug testing consortium and will be subject to a drug test before going out on the road as an owner-operator as well as random drug tests whenever your name is drawn from the testing pool.
Daily Paperwork and Record Keeping
It is vitally important to the success of your new venture as an owner-operator that you keep accurate records of your business transactions. This paperwork includes copies of all bills-of-lading as well as logbooks, mileage reports for each state and maintenance records for all vehicles owned by your company. You will also need to keep receipts for everything you purchase for the trucks, especially fuel. Sitting down with an accountant before you haul your first load as a new owner-operator is a good idea because they will help you figure out billing, accounts payable and keeping records for tax purposes.