If you’ve been leased onto a company or working as a company driver for a while, you’ve probably considered stepping out and getting your own authority.
Having your own authority gives you a lot of opportunities to grow your trucking business, but it’s not for everyone.
Running your own motor carrier takes a lot of additional skills beyond driving. Many great drivers simply don’t have the business skills necessary to run your own company.
So, how do you know if establishing your trucking authority is the right move for you? It’s not a decision you should take lightly. Many great drivers have taken the leap and either burned out or failed.
Before you make a decision, you should consciously weigh both the pros and cons of having your own authority.
When you have your own trucking authority, you get to make all of your own decisions. This gives you a ton of freedom (and responsibility) over your time, money, and equipment.
After you strike out as an independent owner-operator and establish your own authority, you only have to answer to yourself, the FMCSA, and your insurance company. You control your own pay and decide what you do with your truck and when you do it (as long as you stay within the hours of service limits).
When you operate under your own authority, you get to decide what loads you take on. This gives you a lot of control over where you go, how long you’re gone, and how much money you make.
But great loads don’t just fall into your lap once you get your MC number. Having your own authority means you no longer have a big organization above you with a pipeline full of freight ready to be carried.
You have to build your own pipeline to make sure you keep your trailer full. You’ll spend a lot of time building relationships and negotiating contracts with shippers and brokers, then filling in any gaps with loads from load boards.
When you have your own trucking authority, you get to decide when you work and when you take time off.
Having this kind of control over your time is a dream come true for many drivers — but you have to remember that you’re running a business. If you spent too much time off the road, you won’t make enough money to cover your expenses and cut yourself a decent paycheck.
You have to balance freedom and flexibility with long-term profitability.
If you aren’t satisfied with the rates you’re getting per load, you can search out better loads and negotiate better rates with brokers. You aren’t confined to a fixed per-mile rate or revenue share like you are as a company driver or an owner-operator leased to a company.
Instead, you’re only limited by the types of loads you take on. It might be slow going at first and you might feel like you have to say yes to everything, but once you establish yourself as a motor carrier, you’ll compete for better loads and better rates, allowing you to turn down the not-so-great ones.
Having your own authority means you get to keep any cash left over after you pay expenses. Your hard work and long hours go toward making yourself more money instead of padding someone else’s bank account.
But figuring out how much more you can make isn’t as simple as subtracting what your current company receives from each load. Your operating expenses will be much higher as an owner-operator with your own authority.
You have to pay much more attention to maximizing your top-end revenue while cutting expenses to boost your profits from each load.
Becoming an independent owner-operator requires you to be a lot more than just a driver. You become your company’s
Having your own authority comes with a lot of new work that could have you working even longer hours than before — especially while you’re developing systems to make your business run smoothly without you have to work double-time every week to keep your rig on the road.
Drivers who just established their authority often struggle to find consistent loads at great rates. They haven’t yet built relationships with shippers and brokers are usually hesitant to work with new MC numbers — they prefer companies with solid track records that they can look back on.
You’ll also run into a lot of competition for top rates. As a motor carrier, you’re battling both big companies who will take pennies to reposition their trucks and other owner-operators who barely charge enough to keep fuel in their tanks.
If you want to grow your business, you’ll need to actively and persistently look for new loads and negotiate your rates.
Having your own authority means you have to pay for all of your own expenses, including:
While you may have paid some of these yourself if you were leased onto a company, you probably enjoyed some of the company’s fleet benefits that you won’t have access to as an independent driver.
All of these expenses can add up quickly and turn loads that seem great at first into ones that barely break even. As your own motor carrier, you have to diligently track your owner-operator expenses and understand your cost per mile.
When you strike out on your own, you have to manage all of your bills, receipts, invoices, and compliance documents yourself.
Big companies have entire departments dedicated to retaining records for their drivers, but you have to do it all on your own — while also driving and maintaining your truck and managing all the other parts of your business.
It’s easy to get buried under it all if you try to keep up with everything manually.
Using trucking management software like Rigbooks lets you scan, track, and organize all of your important documents and receipts so you know you’re always up to date and compliant.
A good TMS keeps your business organized so you can focus on your next load instead of staying up late, losing sleep, and sacrificing time with your family to sort through a giant stack of paper.
If you want to reclaim your downtime, you can try Rigbooks free for 30 days without ever entering your credit card.
We’ll walk through the pros and cons of QuickBooks in this article so you will have a better idea if it makes sense to use it for your trucking business. Then you can decide if you want to use QuickBooks, or if something made specific for trucking makes more sense.
In this article we explain the Heavy Vehicle Use Tax (HVUT), the Form 2290 tax form, and IFTA tax, and what you need to know about each.
Whether you run a massive fleet or a company of one, you’ll need a driver qualification file (DQF) for each of your drivers — including yourself, if you have your own authority.
FMCSA record retention best practices or how long you need keep driver vehicle inspection reports, testing and more.
Improving your top end revenue can help you invest in better equipment, add more trucks and continue to grow your business. This guide will show you 6 ways owner operators can improve their gross revenue.