Owner-Operators: Boost your success with these 5 tips
Staying on the move and making money is critical to the success of every owner-operator. But what are the best ways to do that? Explore some of the most effective strategies for becoming a successful owner-operator and building a profitable business at any stage of your career. Then, discover the benefits of connecting with ArcBest®, a trusted industry leader that offers valuable resources and thousands of unique shipment opportunities every day.
Prioritize your health and well-being
It’s important to remember your health is the most valuable asset you possess. Professional truck drivers have a lot to manage, and as an owner-operator, the stakes are even higher because you’re working for yourself. Being sidelined because of illness (either yours or a family member’s) or burnout means lost income for your business.
Here are some simple tips for creating and maintaining a healthy lifestyle:
- Prioritize sleep
- Plan healthy meals
- Drink plenty of water
- Spend time outside
- Get an energy boost from short workouts
- Make time for things you enjoy
- Communicate regularly with friends and family
- Connect with online communities
- Ask for help if you need it
Become a student of the industry
An estimated one out of every nine truck drivers in the U.S. is an independent contractor. And with more than 3.5 million truck drivers nationwide, that’s a massive knowledge base to tap into. Be curious, ask questions and take every opportunity to learn from everyone you encounter. Build a network throughout all areas of the industry, including other owner-operators, technicians, the company you contract with, and your customers. These connections can help you keep up with the latest news and help you gain industry knowledge.
Choose loads strategically to streamline your operation
When planning routes, do you factor in deadhead miles between origin and destination? Do you take steps to eliminate unnecessary dwell time? Being profitable as an owner-operator requires paying attention to the details of your shipments to make sure you’re taking the ones that help you meet your professional goals. This means you don’t necessarily have to camp on load boards and take everything that comes your way.
With so much advanced technology at your fingertips, gaining access to a variety of shipments — and generating more income opportunities — has never been easier. This is where a logistics company like ArcBest, with multiple types of shipment opportunities, can be a valuable resource for helping plan your weekly miles. Our load-matching functions help you plan efficient routes that optimize for total miles and revenue per mile instead of just accepting the highest-paying single load. This reduces empty miles and wait time between loads, so you keep moving and earning!
Get the most out of your income
Because of the significant investment required to create, build and maintain your business, you want to make sure you’re always making a profit. Consider creating a monthly budget that accurately accounts for all business and personal expenses. Subtracting your trucking expenses from your gross revenue will reveal your net income.
Once you know your net income, the next step is deciding how to allocate it. A general rule could be reserving 60 percent for all personal expenses (such as housing, transportation, food, utilities, personal debt, etc.) and the remaining 40 percent for taxes, retirement savings and miscellaneous expenses.
On a per-mile basis, fuel is the biggest expense for owner-operators, followed by insurance and ownership costs (truck maintenance, etc). To help offset those costs, find out if the company you contract with offers discounts. ArcBest, for example, offers fuel and insurance programs to help independent contract carriers reduce overall costs so they can keep more of their hard-earned money.
To learn more about planning for your financial future, check out this retirement calendar to estimate how much you’ll need and how long it will take to reach your goals.
Know your profit margin
As an owner-operator, it’s essential to know your profit margin to determine how well your business is performing. To figure it out, calculate your average weekly gross profit (the difference between your revenue and operating expenses). Next, divide gross profit by the total revenue and you get profit margin.
What does that look like? Here’s a sample calculation:
- $5,500 gross revenue - $2,500 expenses = $3,000 gross profit
- $3,000/$5,500 = 0.55 or 55 percent
Experts indicate that a healthy business has a profit ratio of between 10 and 20 percent. So, if your equation yields at least that, you’re likely in a good place.
Some simple ways to potentially increase profit margin include staying up to date on preventative maintenance, outsourcing administrative work (ArcBest handles this for contract carriers), remaining compliant with the Department of Transportation and bundling insurance policies.
Scale your business — your way — with ArcBest
Building a relationship with ArcBest is one of the best decisions you can make as an owner-operator. As a trusted $4 billion integrated logistics company, we offer stability and can help you grow your business within our well-defined nationwide network — which includes some of North America’s largest retailers — and choose the loads you want in your preferred region.
Explore all the ways you can drive for ArcBest and learn how the right capacity partnership can benefit your business.
