You’ve been a trucker for a few years and are looking for new opportunities in the industry. The next logical step is to go into business for yourself as an owner-operator, but where do you begin? We’ve covered starting your own trucking business in previous posts, however you now have a truck and trailer finance expense and are facing the task of finding your own clients, or is there an easier way to get trucking jobs and build revenue?
Subcontracted Trucking Jobs
A fair portion of the trucking industry giants are moving toward subcontracting out work to owner-operators for fulfillment. This is a cost-effective way for them to expand their brand and empire meanwhile helping you establish your owner-operator status. These subcontract arrangements can be helpful for the upstart trucking company, but they can also be burdensome on a new business owner. How do you tell if a deal is right?
Choosing The Right Firm
Each major carrier has pros and cons for the new owner-operator, and while this isn’t completely cut-and-dry, there are some considerations to make when you are looking for a subcontract relationship with a carrier:
Will You Remain Busy?
Is this a relationship that will keep your schedule full and revenue coming through your doors? Those truck trailer finance bills won’t stop, so you need to be sure your revenue doesn’t either. Some carriers offer plenty of subcontract work to build an entire small business on simply servicing that one contract, while others offer enough work to fill the gaps or be part of a portfolio of contracts.
Are The Rates Right?
This is a key consideration to make, and a lot has to do with the types of loads, certifications required, distance, and whether or not your equipment is right for the work at hand. The last thing you want to do is to pick up regional work through an area where either your truck’s not geared appropriately, or doesn’t provide adequate mileage for the rate, let alone additional wear and tear.
What Are The Contract Terms?
Is the contract at-will or for a predetermined enforceable period, and at what point are the contract rates and terms negotiable? Not reading the fine print can get you locked into a contract that isn’t equitable in 6 months. While you can’t expect the Sun, Moon and the Stars, it’s good to know what you’re getting into.
What Type Of Work Is It?
This might be an obvious consideration, however, sometimes a deal that sounds perfect from a paper perspective isn’t right when you consider the intangibles such as schedule flexibility, regional versus long-haul, pre-negotiated rates or is there variance on a per-load/client basis?
Becoming A Successful Owner-Operator
The migration from trucking firm/employee to a contractor/subcontractor has opened up new opportunities for entrepreneurs in the trucking industry, and with a little grit and determination, becoming a successful owner-operator is attainable. If pursuing owner-operator status or expanding your trucking business is on your radar, talk to our truck and trailer finance specialists to find the right program or financial solution to get you the equipment financing you need.