9 What You Actually Need to Get Started

 

1973 White Road Commander

View my Other Posts:

A Holiday Wish
Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking

Pro and Cons of Being an Owner Operator

FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Blackrock Auxiliary Power Unit (APU)
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy
1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
10) Truck Driving Schools

OK. You have done all of your research, and decided you really do want to become an owner operator.

Hopefully, you have:

• Read this entire blog
• Talked with other owner operators, especially at the company you want to lease on to.
• Run a "What If" with the Interactive Cost Per Mile Calculator and found you really could make a profit.  Not just a profit, but enough income to pay all of your expenses and to have enough to live on, too.  (Dont forget, you also need to save enough to cover repairs or a major breakdown and enough to live on while you are getting the work done.)
• Made a business plan.
• Gotten your family to support you.  You would be surprised how many people quit driving a truck because their family doesnt like for them to be away from home.
• Decided what kind of entity you want to have.
• Decided what you will be hauling so you can spec your equipment properly?
  Have you found a truck?  Do you need a trailer too?  If you are leasing to a company, many of them have requirements as to how old of truck they will lease.  Be sure to check it out before you buy.
• Made sure your equipment will pass a DOT, state and company inspection.
• Talked with a loan officer at the bank, credit union, or loan company that will financing your equipment to see what information they require, and to see if you can even get financing for your equipment?
• Figured out how you are going to get your Commercial Drivers License (CDL).  Will you be going to a truck driving school?  If not, do you know how you are going to take a road test?
• Found an accountant or tax professional and got a list of what you need to keep track of before you start buying equipment.
• Check out Owner-Operator Independent Drivers Association (OOIDA) for vast amounts of information.  As before, I recommend that if you do become an owner operator, that you join OOIDA (non owner operators can join, too).

I would advise you to get your CDL first.  If you cant pass your tests, it would be a shame if you had already bought a truck and/or trailer.  Then you would be stuck with having to try to sell them.  Now is not a good time to try to sell your equipment.

You do not have to go to a school to get a CDL.


You do have to take both a written test and a (skills) road test. If you can pass both, then you will be issued a license.


A word of CAUTION, however,  I know you can rent trucks in some states, but in my state that is not possible. I know of no place (and I have looked) where you can rent a truck to take a road test.


Also, we tried to loan our truck to a friend to take his test in, and examiner giving the test wouldnt let him use our truck because he wasnt listed on our insurance. Dont forget, you have to take your road test in the "type of vehicle" you will be operating. In other words, you have to have a "Class A" type vehicle to get a Class A license.


In my state you must supply your own vehicle" and pay the road test examiner $75.00.


Also (any state) before you can even apply for a permit, you must have a long form DOT physical.  Cost depends on the doctor.


Dont forget, if you are applying for your own authority, you have to have a drug and alcohol program in place.  You will be required to have pre-employment  drug testing before you begin to operate your truck.  If you are leasing your truck to a company, they will do handle the drug and alcohol testing.

After you decide what type of entity you will become (sole proprietor, partnership, LLC, corporation, etc.) you may have to get an Employers Identification Number (EIN), also called a Federal Employers Identification Number (FEIN).  Its FREE! and will be issued immediately if you apply online. If you will be a sole proprietor, your EIN will be your social security number, unless you will be hiring employees (including family members), then you will need an EIN.  All others will have to file a IRS Form SS4, or file online at Employer ID Number (EIN).  See: 6) How to Do Bookkeeping and Other Necessary Paperwork Permits and Taxes for more information about sole proprietorships, partnerships, spousal partnerships, employees,and more.

After you get your federal EIN, you will have to apply for a business license with your home state.  (If you are going to be a sole proprietor, you will apply using your social security number, unless you will have employees - then you need an EIN.)  You may also have to apply for a business license with your county (parish), and/or city.  If you are going to be a LLC (limited liability company or LLP (limited liability partnership) the you will also need to have liability insurance.

Are you going to be leasing to a company or getting your own authority?  In some states you will need a USDOT number before you can get your license plates.   ** This requirement is being phased out by September 1, 2012.  Since it is until effect until then, I am not sure if you would be required to have it at this time or not.  Check with you state registration office. **  If you are applying for your own authority, you have to have a USDOT number.

Will you be operating intrastate or interstate? (intrastate is within one state only, interstate is operating in more than one state).

Will you be hauling hazardous materials (hazmat)?  Then you need a hazmat endorsement (any state).  You will also need to have a background check and be fingerprinted and get a Hazmat Endorsement Threat Assessment.  Go to Transportation Security Administration for details.  Cost is $89.25.  It is valid for 5 years, unless you transfer (to another state), upgrade (add endorsements), or renew a license, then you need to go through (and pay) all of this again.

If you will be loading or unloading at ports, you will need a Transportation Worker Identification Credential (TWIC).  You can get information about this at Department of Homeland Security - TWIC.  The cost is $132.50 and is valid for 5 years.


If you plan to operate in Canada or Mexico, you will also need a passport.  United States government passport information. Cost is $120.00

The answer to each of these questions determines what you need to apply for.  Go to Federal Motor Carrier Safety Administration (FMCSA) registration and licensing for a matrix (list) of the required forms, and to apply online.

You will, of course, need license plates for your tractor and your trailer (if you are purchasing both).  Contact your state Department of Motor Vehicles to find out how to apply.  Unless you are applying for license plates within 30 days of your purchase of your tractor, you will need a copy of IRS Form 2290, Heavy Highway Vehicle Use Tax Return, showing you paid your road use taxes. This is an annual fee.  It is  $550.00 a year for an 80,000 pound vehicle (except logging.)

The type of trucking insurance you need will depend on whether you are leased to a company or have your own operating authority, what type of goods you will be hauling, and whether your equipment is financed or paid for.  Be sure to read all of the pages at the FMCSA website.  Join OOIDA ($45 a year) and they will give you all the help you need to decide what kind of insurance you need.  You can even purchase it from them.  Just as with your personal vehicle insurance, your driving record, type of vehicle and the company you buy from will determine the cost

If you are leasing your truck to a company, you may also be required to be fingerprinted, buy Occupational Accident Insurance, and/or Workers Compensation Insurance.

I know that everyone reading this wanted a nice, neat little list of what you need and how to get it, and how much it would cost.  As you can see, however, there are so many variables, it is impossible for me to tell you exactly what you need.  In addition to the federal requirements, each state has their own rules.

The costs are also impossible to calculate without knowing exactly who, what, where, why and how, but here is a rough list:

• Money to pay for a truck driving school, if you are going to go to one
• Down payment(s) for your equipment.
• Licenses
• Permits
• Insurance
• Enough money to operate until you get your first settlement check
• Enough money to live on until you get your first settlement check.  I would recommend having enough for at least 2-6 months 
• Money put up for breakdowns (it could happen on your first trip)

If you need to buy products (training manuals or safety and compliance tools), J. J. Keller is a good source for safety and regulatory compliance products and services that help you increase safety awareness, reduce risk, follow best practices, and stay current with changing regulations.  They are used by most of the large trucking companies.

I hope this has helped you.  I would be interested in your comments.  Let me know if you think this has been useful.  If you need information about something I didnt cover, let me know, and I will update this.

Read my other posts for details and resources for of some of the information in this post.

Be sure to subscribe to this blog to get the latest information, as I keep updating this site.

I am sorry I have to do this, but due to spam "comments"  I feel I need to moderate comments from now on.

I am sorry for any inconvenience this may cause to my legitimate commenters.

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3 Getting Started – Financing and Credit for the Owner Operator

 


2001 K Whopper (Kenworth)

 Becoming An Owner Operator

3) Getting Started - Financing and Credit

See my other posts:

A Holiday Wish

The Way it Was - A Short History of Trucking

Pro and Cons of Being an Owner Operator

FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Blackrock Auxiliary Power Unit (APU)
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy
1) Owner Operator 411 – Welcome
2) Income and Expenses
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Now that you know how much money you can really earn, your next step, if you still think you want to be an owner operator, is to decide if you can afford it.

Do you want to be a truck driver, or a businessman? Most people think they can just buy a truck and roll, but there is a lot more to it than that. In the first place, a truck can cost anywhere from $30,000.00 for a used one to $150,000.00 for a new one.

You have to look a your complete financial picture and figure out if you can even afford to purchase a truck, much less all the expenses that go along with it.

First, you want your new business to be a money making enterprise, so you dont want to start out too much in debt. Your truck payments will run from $1,000.00 to $2,500.00 a month. As you can see, you will have to have a good credit history before you can even buy a truck.

Many banks and credit unions will want a written business plan when you try to get a loan. This will tell them how you think you will be able to pay back the money you borrow from them.

The first thing you need to do is check your credit report and Fico score before even applying for a loan. Everyone is entitled to an annual free credit report from each of the three credit bureaus: Equifax, TransUnion and Experian. Check with all three, as they do not provide the same information. If you find any mistakes, have them taken care of before you try to get a loan. Banks will look at your Fico score. The credit bureaus will let you buy your credit score. These are not the same thing, but a credit score should give you an indication of your FICO score (if one is high the other should be high, and vice versa.

Before you try to get a loan, you need to get your business license, so that you can get a business loan. I will write about setting up your business structure (sole proprietor, partnership, LLC, S corporation, or corporation) in a later post. I was going to do that in this post, but decided to wait because if you cant buy a truck, there isnt any reason to start a business, so we need to concentrate on financing before we start talking about ways to make money. In a way, it is just like the old saying, “You have to have money to make money.”

See: Types of Entities in Section 6) How to Do Bookkeeping and Other Necessary Paperwork for the Owner Operator - Permits and Taxes

When we bought our first truck, we paid $3,000.00 for it and the person we bought it from financed it for us. Boy! Are those days ever gone. Diesel was 34 cents a gallon, milk was 50 cents a gallon, and I walked 5 miles to work, uphill, both ways, in the snow, winter and summer.

Seriously, though, we went into debt to get our first truck, and so will you. In planning how much you need, dont forget all the other expenses. If you dont buy a brand new truck, you will probably have to put some maintenance into it before you can put it to work. If you are lucky enough to find a truck that really is ready to go on the road, you still arent out of the woods. On your very first trip, all kinds of bad things can happen, and you need to be prepared. You may blow a tire and have to replace it (cost about $250.00), or you may blow an engine (cost $10,000.00 and UP)

Not only do you have to have the money to pay for these things, you will have to have the money to live on while you are getting the repairs done. If you blew an engine, it can take a week or more to have it repaired or replaced. Dont forget that $1,000.00 to $2,500.00 truck payment. If you are down for a week, you still have that payment coming due (and other fixed expenses like owner operator insurance, taxes, and licenses) – and you are not only spending money for repairs, you are not making any money. The moral is, you need to have some extra money in the bank to fall back on.

Anyone can have breakdowns, anytime, for any reason. I knew a guy once who bought a brand new truck and he had to have the engine replaced 3 times in a year. Yes, it was under warranty, but as I said above, he still had payments coming due, and no income each time it was in the shop having the engine replaced.

Of course, he had a lemon, and it is unusual for something like that to happen, but it does go to show, you just never know. I would like to say the best way to not have a breakdown is preventive maintenance. I cant stress that enough. If you hear a whistle in the turbo, dont just sing along with it until it becomes a scream. Have it fixed at the very first chance you get. Believe me, it will pay off in the long run.

If you can get the financing, in a way now is a good time to buy a truck. Many truck drivers are selling their trucks because of the bad economy, and you may be able to find one cheaper than you could have a year or two ago. For some reason, though, truck prices havent dropped very much – but the freight has. 

As more and more companies are laying off workers and cutting back on production, they arent making as many goods, so they dont have as much to ship. You may be able to buy a truck, but you may not have anything to haul. Like almost everything else today, truck driving jobs (even owner operator trucking jobs) are hard to get.

Resources:

SCORE: www.score.org This is an excellent resource, and best of all, it is entirely free! They have mentors, online or in person to answer your questions and help you make business decisions. They have online workshops, including one titled, “Can you afford to start?” which will help you answer a lot of the questions raised in this post. If you are serious about starting your own business, dont skip this website.

SBA (Small Business Administration): www.SBA.gov/ They have information about all kinds of things to do with small businesses, as well as online training about how to start a business and how to write a business plan. They even give loans.

OOIDA (Owner Operator Independent Drivers Association): www.ooida.com They give out tons of advice, publish a magazine, make equipment loans, and sell owner operator insurance and truck insurance.

An accountant: They can do tax consultation as well as bookkeeping.

Your local bank or credit union: In addition to making loans, some have legal departments which can help you set up a LLC or corporation.

If you have a favorite resource, let us know and share it with others.

Next post: Operating Authority or Leasing?

Be sure to subscribe to this blog to get the latest and newest information.

I am sorry I have to do this, but due to spam "comments"  I feel I need to moderate comments from now on.

I am sorry for any inconvenience this may cause to my legitimate commenters.

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How to Get Started as a Writer on Fiverr

I have to say I mostly do proofreading and other things on Fiverr, but I was writing blog posts for different people for a while over one summer on there. I stopped doing it because my proofreading was taking off on Fiverr and I didn’t have the time to devote to writing.

Basically you would start by signing up on Fiverr.

Check out the Writing/Translation section of Fiverr to see what others are doing as far as gig offerings … how many words will they write for $5 (remember you only get $4 of that)? How fast is their turnaround? How fast can you turn something out?

Then fill in a wonderful profile with your photo and information about yourself. Check out other profiles to see what others have written. If youd like to see my profile and gigs, I am here.

After your profile is polished, create a gig. You can create as many gigs as you like. I believe you have to wait 30 days to be able to offer Gig Extras like charging more for extra fast delivery, writing more words, accepting a tip, etc.

Offer, for instance, to write a 250-word blog post for a business for $5. Can you do that in about 15 minutes? Good! Then you’ll be making double minimum wage in America while working from home! You can also offer to be a ghost writer for a certain amount of words for one gig, write an ebook, write marketing materials, whatever you are great at!

Yes, there are tons of other writers on Fiverr, so you have to stand out. Make a video to go with your gig and make sure you say your price is “exclusively on Fiverr” or it will be rejected.

Use social media, friends, anything you can think of, to promote your gig.

I have to add here that I make a lot more money writing for regional parenting magazines using the resource I wrote. You can get it FREE on Kindle Unlimited and I give it away free for 5 days every 3 months. Otherwise you can buy it as an ebook but I recommend the print version so you can highlight, Post-It note and write in it! You can make money writing on Fiverr and also do this at the same time! I love working from home ... oh, the options!

Check out my post on how to get started as a proofreader on Fiverr!

Please use the comments section to ask me any questions I may have forgotten to answer and I will update this post accordingly.

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How to Get Started as a Proofreader on Fiverr

Basically you would start by signing up on Fiverr.

Check out the Writing/Translation section, then Proofreading, on Fiverr to see what others are doing as far as gig offerings … how many words will they proofread for $5 (remember you only get $4 of that)? How fast is their turnaround? How fast can you turn something out? I started out proofing 3,000 words for $5 and got busy but wasn’t making good money at all. Now I stick with 1,500 words. Some can get away with only 750 words, and those are usually the people with an English degree!

Then fill in a wonderful profile with your photo and information about yourself. Check out other profiles to see what others have written. If youd like to see my profile and gigs, I am here.

After your profile is polished, create a gig. You can create as many gigs as you like. I believe you have to wait 30 days to be able to offer Gig Extras like charging more for extra fast delivery, proofreading more words, accepting a tip, etc.

Offer, for instance, to proof 1,500 words for $5. Can you do that in about 15 minutes? Good! Then you’ll be making double minimum wage in America while working from home (just dont forget taxes)! You can offer to proofread large projects or stick with small ones. You can adjust your delivery time if you get swamped.

Yes, there are tons of other proofers on Fiverr, so you have to stand out. Make a video to go with your gig and make sure you say your price is “exclusively on Fiverr” or it will be rejected.

Use social media, friends, anything you can think of, to promote your gig.

Please use the comments section to ask me any questions I may have forgotten to answer and I will update this post accordingly.

Check out my post on how to get started as a writer on Fiverr.

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How Can I Find Proofreading Jobs Here are 9 Places to Get You Started!

Im going to freak you out here.

If my kids were in school and I didnt care how my house looked or what anyone ate, I could easily make $5,000 per month proofreading (dont forget to take taxes out of that at the end of the year and its not as much as it seems like but still a lovely income from home).

I have had INSANE months where I was able to make close to $2,000 proofreading in a month but I wanted to die at the end, only because I have other things going on for income and managing everything gets difficult. I like to have other income streams because proofreading can be feast or famine, usually feast once you get going and get some good reviews and recs. Heres my income report for September, for example.

Heres what I have come up with so far so maybe you can do what Im doing! The first two I am not familiar with because I just havent had the time to dive into them. They are reputable sites that ask for a proofreading test or sample, but I hear competition can be fierce, and Im not about underbidding my services!

1. Elance

2. Upwork (formerly Odesk)

3. Scripted is a great way to find proofreading work but you have to BE ON TOP OF YOUR GAME, as in full-on GRAMMAR NAZI MODE. I did some writing for them and also some proofreading. I was shocked at the great money I was making and had the down payment on my yacht (just kidding!) when they canned me. They seriously culled their proofing pool and I did not make the cut. I was entirely bummed. If you are a better proofer than I am, GO FOR IT!

4. Hunt down people when you see things written wrong! Is your doctors website WHACK (not in a good way)??? Offer to proofread it for cheap. Did you get a piece of direct mail that had errors? Figure out who to contact and offer your services.

5. Tenrr is a place I gave a shot and got some work but it trickled in. I havent promoted my proofing there or anything. Knockoff of Fiverr, which I talk about later.

6. Gigbucks is akin to Tenrr. I am only signed up at all of these places because I like putting my chocolate proofreading eggs in lots of different baskets.

7. PeoplePerHour is another place I signed up at for free but nothing came of it. Some of these sites are flooded so you just have to sign up all over the place and wait and promote your services.

8. Outsource.com is a place I tried for a hot second but didnt have the patience to keep at it. I had to pay for credits so I could bid jobs. I did have plenty of credits in the end and the jobs to bid on were picking up, but the competition was fierce. I did get chosen for one job and it went well and I made back what I spent in credits. I was up for another job but they had a zillion and one requirements instead of just the simple proofing and editing I do and I cant focus on jumping through hoops. I like to fix documents and get out. I dont want to get wrangled into trying to write copy or critique what theyve done because those things get touchy and subjective. You might have a better experience. I broke my own rule of paying to get jobs so I could basically get the experience to share here!

9. Fiverr is my go-to place since I signed up in April 2013 and the jobs started flooding in. I have a separate post for it because I have so much to say on the topic!

As far as signing up and getting jobs right away, I dont know if I just got lucky or what but people gave a newbie a try and soon I had good reviews coming in and more jobs. I was so busy at one point in 2013 that I was outsourcing, which was a total shit show (Im going with two words for shit show instead of making it one ... haha!).

I shut down my outsourcing situation and tried to keep up with the work on my own but soon had no life and my kids were eating too much fast food all summer. I got a bad review because I was hurrying through my work and it all went to hell for a while. It picked back up and then I overused Vacation Mode. Just in the last few months have I gotten back on and made a decent income again.

Ive done many different gigs on Fiverr besides proofreading so poke around to see what else you can offer. I put my delivery on at least 3 days so that keeps my orders low enough to manage. The main guy who does 24-hour delivery basically works full-time all day long doing small jobs. The client is charged $5 and you receive $4. At first I thought that was robbery but now I realize THEY are finding the clients for me pretty much so I will happily take my $4 for proofreading 1,500 words. I got more orders when my gig was for 2,000 words but it was taking too long to proofread that for $4 with so many non-native English speakers sending projects my way. Those projects just take longer because they require more time and reworking.

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