Benefits of Control
When you are the one who decides your fate, it brings about a new sense of urgency. When the 40-hour week paycheck is gone and you must rely on your own decisions to generate an income, you have to consider more than the superficial data like Rate Per Mile (RPM) and number of miles. As a company driver, miles matter and good base RPM matters. When you decide to transition into an owner-operator role, you no longer just wear the company-issued hat. This is where the realization comes in that there is so much more happening behind the scenes of the company driver job you had. Hopefully, you already did your homework and are at least a little better prepared for the responsibilities of ownership. Whether you are an independent owner-operator or a leased owner-operator, there are stark contrasts from the company driver job.
You are now your dispatcher. You now determine which load is a better choice and why. You decide where to find the lowest-cost fuel on the route you chose. You are now in control of where you go and why. Once you get there, it is up to you to find the next load… and the next.
You are your accountant. You can have an accountant to handle the workload, but they cannot function effectively on your behalf if you do not give them the required information, receipts, and invoices to properly track it for you.
You now need to set aside maintenance funds for the inevitable repairs. You are your best advocate for getting repairs scheduled, completed properly, and in a timely manner. It is up to you to know what the shop is claiming to be the issue(s) with your equipment and determine the validity of the claim. If you do not possess a rudimentary knowledge of your equipment, you would have no idea if the repairs done even addressed the issue.
You are responsible for taxes. Not the taxes your old employer took from your check each week, but quarterly estimated taxes, self-employment taxes, 2290 taxes (if applicable), IFTA taxes and IFTA reporting, etc. That check you receive as an O/O is pre-tax; don’t forget to set aside the tax you will owe and to pay it on time. IRS penalties and late fees are compounded and relentless.
Trucks don’t last forever. Set aside funds for the eventual replacement or the rebuild for engines, transmissions, emissions, etc.
All of the expenses listed above are just a small part of the ownership puzzle. The good news is that all of it, and the other expenses too, can be planned for ahead of time. With a little discipline and a few calculations, you can figure these expenses to a per-mile cost and save accordingly. Tires need regular replacement. Take the cost of a set of steer tires and divide it by the miles you get from them. This is how much you need to reserve in the maintenance fund for this expense. Do the same for drive tires. It isn’t hard to compute; where many fail is in the execution of actually saving the funds for the expense.
Once you control the means of generating your own revenue, you must be diligent in assigning the funds for a purpose. This gives you the freedom to make better choices.
Trucking has always been touted as “Freedom of the road,” but the reality is that when done with a purpose, with a set of goals and discipline, it is more freedom than just of the road; it gives you freedom of choice.
Your life is the sum result of all the choices you make, both consciously and unconsciously. If you can control the process of choosing, you can take control of all aspects of your life. You can find the freedom that comes from being in charge of yourself.
- Robert Foster Bennett
See you down the road,
Greg