The good news is the American dream can indeed become a reality—for the right person. The challenges, however, are substantial. And that’s why trucking business expert Todd Amen calls people just starting out as owner-operators “pioneers.” The characterization is appropriate: It salutes and flatters, invoking the spirit of those Americans willing to risk everything and strike out in search of a better life. On the other hand, as Amen points out, “about 90% of them didn’t make it because they didn’t know what they were getting into.”
“For the pioneer, we think the most important thing is to just think about it before you do it,” says Amen, founder, president and CEO of ATBS (formerly known as American Truck Business Services). “We’ve made it too easy in our industry to become an owner-operator.”
Typically, as Amen explains, a company driver might find himself sitting in a truck stop on a weekend layover, and he’ll decide he needs more control over his career. “Next thing you know, he’s an owner-operator on Monday morning and he really didn’t have to do anything to become that. He just went out and found a truck, but he’s got no business skills.”
Before a driver signs on the dotted line of a lease-purchase agreement, he or she needs to be prepared. Among its services, ATBS helps would-be owner-ops develop a “profit plan.” (Amen quips that telling drivers they need to work up a “budget” is like telling them they need a root canal.)
“It’s just sitting down and going through the numbers and really understanding what a business is going to look like. It’s understanding your insurance and truck payment, fuel costs, what to set aside for maintenance—a thousand questions that nobody really thinks about before they jump into this business,” Amen says. “How much money are you going to make, and is it going to support your household? That’s the most important thing someone can do before they take the step to become an owner-operator.”
The Internet is loaded with guides for coming up with a business plan (see the sidebar on page 19 for Web resources), but the concept is simple: The plan is your road map to success and needs to take a realistic look at your market, products and objectives. For ATBS, it’s a “constantly evolving document that projects several years ahead and outlines the route your company intends to take in order to grow.”
In launching a business, ATBS also recommends that you:
- Know how to create an entity. Every state has different rules as to how a business entity is required to run, but owners are typically better off by forming entities where their permanent home and tax address is located. Options usually are a partnership, S corporation, C corporation, or an LLC.
- Estimate taxes based on current revenue. Tax planning may not be the most exciting part of owning a business, but down the road it can help you save a lot of money.
- Don’t try to do everything yourself—delegate! The inability or unwillingness to delegate has led to the downfall of many business professionals and owners, regardless of the company’s size or revenue.
To read the full story, visit http://trucker.com/business/slow-and-steady-how-grow-small-fleet.