Getting Started as an Owner/Operator
Many truck drivers eventually decide to become their own boss and enjoy the freedom of choosing their own work, managing themselves and reaping the benefits of their success.
Owner-operated businesses are the UK’s most popular way of running a commercial vehicle. Statistics show that 44 percent of the of the UK’s O-licences issued are for a single vehicle.
Becoming an owner driver requires hard work and commitment plus the need to deliver excellent standards of service to customers and suppliers.
You may need to sharpen your business skills in order to overcome any challenges that may arise and run your business effectively.
Make yourself aware of the costs associated with running a truck and trailer and prepare yourself financially as lack of planning could lead to financial difficulties or even disaster.
Responsibilities Incurred by Owner-Drivers
- The need to keep a track of expenses
- Maintaining accurate and up to date accounts
- Correct preparing of invoices
- Tracking payments / chasing late payers to avoid cash-flow problems
Costs of Standard National and standard International licences
Before applying for the required Operator’s Licence (O Licence), you need minimum funds of £7000
- First Vehicle £7000
- Each additional vehicle £3900
- First vehicle £3,100
- Each additional vehicle £1700
Choosing an Operational Base
Your operating base needs to be a safe and secure place suitable for parking your truck when it’s not being driven.
After selecting your operational base, post an advertisement in the local newspaper declaring your intention to obtain an O Licence for operating there.
Any objections must be submitted within 21 days, after which you can apply for your licence. Complete the application form and send with copies of your advert and payment.
Expect a wait of around nine weeks for an O Licence.
Goods Operator Licensing Fees:-
- Application fee for a Licence (GV79) or publishable variation (GV81) £257
- Fee for issue of licence £401
- Fee for the extension of an existing licence £401
- Fee for issue of interim licence or direction £68
Selecting your Truck
After obtaining your licence you can choose your perfect truck. Weigh up the pros and cons of renting versus buying but the right truck for you is down to personal preferences and your financial situation.
Renting a Truck
Renting gives a solution when there are insufficient funds to purchase a truck. Many owner drivers begin by renting to reduce start up costs.
Renting means you will benefit from the rental company’s responsibility for resolving most problems that arise with the truck.
Renting long term works out more expensive but enables you to obtain a new truck and know that should anything go wrong you will be provided with a replacement and wont loose time off the road.
Buying a Truck
- Be wary of a salesman’s spiel on MPG
- Fuel efficiency will vary according to the engine, load and weather conditions
- The downside to ownership is repair bills and the need to rent a replacement whilst repairs are underway
- An almost new truck is often an attractive option. They are cheaper than brand new, suffer less depreciation and come with a guarantee
- If you opt to purchase, buy the newest vehicle you can afford from a reputable company and check its service history
Benefits of Obtaining Finance:-
- No lump sum to pay out
- After paying off the finance you own your truck
- Operational costs drop when monthly payments finish
Insurance for Owner Drivers
There are many types of insurance cover. These are detailed in our Insurance guide.
Lining up Potential Work
Start lining up work whilst going through the process of setting up your business. Accept work for when you are good to go. (Haulage companies are usually sympathetic to the lengthy setting up process.) Keep companies that have offered you work up to date on your progress.
Find multiple companies to sub-contract work from to maximise your potential workload. Don’t commit to a single company promising full time work but insisting you work solely for them. They may not have enough work for your needs.
Use a freight exchange to source work and grow your network. These give you access to numerous loads, making it easy to source lots of haulage work and become an established owner driver.
Operating Your Owner Driver Business
- Forming a limited company is usually beneficial as many companies prefer working with these rather than sole traders
- Work as a sub-contractor for one major haulage company
- Float between several haulage companies by using a freight exchange
- Work directly for customers eliminating the need for expensive middle men
Rates will differ as you may be paid per mile, by the weight of your load or even by the hour.
Tips for Owner Drivers
- Before starting a job get the delivery rate in writing from the company
- Don’t accept a job until you have confirmed the price and mileage
- Be wary of carrying livery
- Always obtain a signed proof of delivery sheet detailing the time and date and retain for your records
- Delivering excellent service to set you above your competitors and improve your chances of gaining work
- Invest in a finance software package that makes it easy to spot overdue payments and monitor cash flow
- Always wear high-visibility clothing and steel toe-capped boots to avoid being refused entry
Costs of Getting Started as an Owner-Operator
Remember gross revenue is different than profit. Numerous expenses have to be deducted from gross revenue.
A survey by Commercial Motors found that the initial outlay of getting a commercial vehicle running as a business was £31,151 whilst eight weeks of driving would bring in an average wage of £4740.
Top Tips for Success
- Remember rates and loads in the trucking industry are driven by many factors including fuel costs, supply and demand
- Staying informed on current rates gives greater negotiating power with brokers and shippers
- Note what causes downturns in your business or improves conditions
- Be prepared for changing costs and revenues plus drops in workload and budget accordingly
- Find your niche market and grow it