How to Rent a Truck to Be an Owner-Operator
Becoming an owner-operator in a trucking business can give you the ultimate freedom. Work when you want to work and fit your travels into your own schedule. Unfortunately, the cost of owning a truck can be prohibitive to brand new entrepreneurs. This is why renting can be an excellent option to kick-start your trucking business.
The world of trucking is highly regulated. You need experience and you need certain certifications in order to legally work. You can’t become an owner-operator overnight, but if you’re patient, you will fulfill your dreams of the open road.
The type of license you need depends on the weight of the truck you plan on driving and the amount you plan to tow. Sure, you can get away with driving a small box truck with a normal driver’s license (think about how anyone can rent a U-Haul to move), but you’ll probably need to get your CDL or commercial driver’s license to truly have a successful career as an owner-operator.
To get your CDL, you’ll have to enroll in a truck driving school, take a course and pass a written and driving test. Some truck driving companies will pay for this course if you sign a contract with them, so you might want to get your start driving for someone else before you go at it on your own.
Driving a truck is tricky, and you’ll really need to develop some serious driving skills to make your small business work. Don’t underestimate how difficult it is to complete a delivery on time while accounting for terrible weather, uncertain road conditions and major traffic. Plus, there are all the routes you can’t take in a truck – especially one carrying hazardous chemicals. It’s best to learn how to accommodate all the uncertainties in trucking by driving for a company before becoming your own boss.
You’ll also need to see what’s required of an owner-operator and how trucking businesses work from the inside out. How do you land contracts? What permits do you need to cross state lines with an oversize load? Once you understand the industry and have the experience, it’s easier to go out on your own.
Trucking is heavily regulated and to become an owner-operator, you’ll legally need a registered United States Department of Transportation (USDOT) number and a Motor Carrier (or MC) number before you launch your business. The USDOT number federal filing fee costs around $300. Once you have that, you can request an MC number from the Federal Motor Carrier Safety Administration.
At this time, you’ll also have to pick the type of trucking authority you’re going to have and fill out an OP-1 form with the department of transportation. Trucking authority allows you to operate on your own and book your own loads rather than working for a company who books them for you. There are two types of trucking authority and you’ll need to get certain insurance to match:
- Motor Carrier of Property: you’ll need public liability and cargo insurance.
- Motor Carrier of Household Goods: you’ll only need public liability insurance.
This is also a good time to get a business license from your secretary of state’s office, which is legally required, and set up a tax structure with the IRS. Will you be an LLC or S-Corp? The fees paid to the state and your taxes vary based on what structure you choose.
Your vehicle is the next step. Buying a truck is pretty cost prohibitive considering it can run an upwards of $100,000. Instead, you probably want to lease a truck from a trucking company. There are rent-to-own options that make each month you lease an investment into your future business. The only downside is that if you lease a truck from a company, you might be expected to drive their loads as well as your own.
Once you’re registered and have the correct permits, you’re ready to start carrying some freight. There are a number of job boards, such as Truckloads, that help you find freight that needs to be carried. You can also use your previous experience to contact companies on your own and work out your own contracts. Never underestimate the value of a cold call!
Additional permits allow you to carry different goods or operate in a wider area. For example, if you want to cross state lines, you’ll need an intrastate permit. If you want to carry alcoholic beverages, you’ll need an alcoholic beverage permit. If you want to carry hazardous materials, you’ll need to take a HAZMAT course and get a HAZMAT license. These permits can help expand your business.