Most owner operators will tell you that going out on your own and working independently from trucking companies is a scary thing to do. If you think you are ready to look for and manage your own truck driving jobs, here are some financial management tips you need to consider before entering the world of owner operators.

Arrange some legitimate side jobs without jeopardizing your current job. First, work truck driving jobs on the side for a while. Most owner operators do not jump into the field all at once. Keep your day job, and use off time to work independently. You need to build a client base before striking out on your own.

Key point: Hopefully, you have a good enough relationship with your existing trucking company that they will applaud you for your desire to become independent and support your decision.

As a fledging entrepreneur you must be realistic. Is there really a market for your skills in your area? You may find that trucking companies have a monopoly on truck driving jobs or the loads that are your specialty in your region. Make sure that you will be able to cover your expenses by tracking your expenses in great detail.

Key point: Learn everything you can about the business model before you go solo.

Learn what it will take to be profitable. You need to know what you need to make from your trucking jobs before striking out on your own. Sometimes a job might look like it pays well, but when you start calculating your monthly living expenses; you find that it is nowhere near enough. Knowing what you need is the key to sound financial management as an owner operator.

Key point: Know what it takes to be profitable. Most small businesses fail because they underestimate expenses and over estimate revenue.

For goodness sakes, know your credit score. You will need a loan to buy your truck before you can start working jobs. Most trucking companies will not allow you to work jobs on the side with their equipment. If they do, you will not have a truck when you finally quit. Knowing your credit score will help you know whether or not you will qualify for a loan to start your new business.

Key point: Don’t leverage your home to start a business. Save the start-up capital beforehand.

Track your expenses on a daily basis. Take time to calculate what it will cost to start running your own business. Counting the cost is the key to financial management. You will need to know the costs before applying for a loan.

Key point: Revenue must exceed expenses. For every $1.00 you invest, you should bring in $1.50 in return.

Oh how the tax man will cometh! Yes, owner operators have to pay taxes. As you are calculating your costs, be sure to calculate the cost of catches. Remember to save at least 20% of all of your earnings for tax time.

Key point: Find a good accountant BEFORE you think of going solo. They will advise you objectively.

Pay attention to and keep track of your paperwork. All trucking companies know that trucking jobs come with tons of paperwork. If you become an owner operator, your paperwork will effectively double. Not only will you need to keep logs, but you will also need to track receipts for your deductions, among other things. You must have a financial management system in place that accounts for paperwork.

Key point: Everyone hates paperwork, but you have to mange it so it doesn’t manage you.

Remember, you’re not a charity, so get customers to pay you on time. Remember, it’s not always easy to get your customers to pay after completing a job. Have a plan in place that you will follow if someone conveniently forgets to pay. Keep careful records to make sure that your invoices are paid in full.

Key point: Extending too much credit to customers will kill your dream!

If you’re not using a computer, forget everything you’ve just read, and don’t even think of going it alone. Software can make your paperwork much simpler. Invest in a laptop and some software that will help you keep track of invoices, bills, deductions, and the rest of your paperwork. This could be part of your start up expenses.

Key point: Sorry, but this is reality and it’s best not to sugar coat it

The three most important words in your vocabulary as an owner operator are Network, Network and Network. Owner operators have a tough job, and when you throw financial management into the mix, it gets even tougher. When you throw financial management into the picture, truck driving jobs become increasingly complicated. Take the time to take a coffee break with other independent drivers, and learn from them. Soon you will know what you need to start out on your own.

Key point: find yourself a quality mentor. You CAN reach your dreams.

If you are a professional truck driver who is a successful owner operator, we would encourage you to share a great money management tips with your peers, please leave a comment and we will pass it on to other owner operators.