How to become a owner operator?

An owner operator truck driver is someone who owns their own truck driving firms or businesses. Owning a truck company typically involves leasing or buying one or more semi trucks and finding freight to haul along with handling the day-to-day tasks that comes with owning a business.

There are a lot of complications to consider and regulations to be followed in order to become an owner-operator and handle all the hustle in this trucking business.

Therefore, we could dive a lot deeper into everything related to it but first, let’s get through the procedure of how to become an owner-operator in Canada to kick start your trucking business briefly:

How to become a 53′ Dry van Owner-Operator?

1. Plan out your trucking Business

Planning allows you to estimate how prepared you are to become an owner-operator or how to open a trucking company. It typically includes selecting your business structure, conducting market surveys, and putting together your general blueprint for your operations, revenue generation and other business aspects.

2. Define your Niche

Identify the particular niche you would prefer to operate in by considering the below mentioned factors:

• The Geographic Range of Operation – How far from home would you prefer to cover with your trips? If you want to stay near your family, opt for short-haul trucking. Long-haul shipments can make piles of money, particularly for owner-operators, but at the expense and condition of being away from their loved ones.
  
• Knowledge regarding Loadboards –  A load board, also known as a freight board or a freight matching service, helps in connecting shippers and carriers.
  
  It is an online service platform where truck owner-operators, shippers, and freight brokers can post the available loads they have as well as search for available loads.
  
  Mostly, trucking load boards are systematic and allow you to post and search for loads using certain criteria to provide various services for both freight brokers and carriers.
  
  Depending on the board, you can find services as listed below:
  
  > Load Matching
  > Credit Information/ Days to pay
  > Message Boards
  > Ability to make notes on Shippers/carriers
  > FMC SA (Federal Motor Carrier Safety Administration) Verification
  > Finance of pre-approval loads using factoring
  > Mobile Access
  
  Some of the top load boards in Canada to consider for your business are loadlink technologies, freight finder, The Canadian Loadboard, Trusted Dispatch, etc.
  
• Usage of Blast Emails – Email blasts have been around since 1978 and surely had their moment. In recent years, email campaigns came into existence.
  
  An email blast, also known as mass emails, refers to a process where a single email message is sent to a large volume of customers or prospects simultaneously.
  
  Rather than the classic one-on-one communication between two people, you can deliver your business email messages to a whole prominent list at the same time.
  
  Being an owner-operator, you could use this source as a medium to target a large circle of shippers and also, carriers to make them aware of your business and its services.
  
  Today, a majority of people believe that blast emails are outdated as they are unsegmented, untargeted and unpredictable. However, you can always make an attempt to make it work for your business by sending it on the right day and at the right time.
  
  
  Based on the latest email marketing best practices, it turns out that Thursday morning is the ideal time for the average business to send these blast mails.
  
  
• Using Accounting Software – A good accounting software can help your trucking business with all your invoices, income, and expenses in one place.
  
  An accounting software helps in creating accurate and detailed financial reports for your trucking business (and, being an owner operator). With this software, you’ll be able to run reports and monitor your profits/loss, customer revenue, driver payments, and year-end taxes efficiently and quickly.

Below mentioned are some of the best accounting softwares to get started as an owner-operator with your trucking business in Canada:

3. Create your Trucking Business Plan

A business plan is a brief document that explains your company’s goals, strategies, target market, and financial predictions. It helps you decide how to run your business by narrating timely, realistic objectives, getting outside funding, quantifying your success, defining your operational requirements, etc.

Your business plan also acts as your tool to convince investors, lenders, and other stakeholders to support your trucking business.

Take time to consider how to start your trucking business in Canada, and put your business plan on paper. Include important details, such as market analysis, positioning, and other figures.

You can even work with an experienced professional in this industry to enhance your proposal and increase your investment approval chances.

4. Pickup an ownership type for your Trucking Business

Next, pick the legal structure that best suits your goals: sole proprietorship, partnership, or corporation.
A sole proprietorship usually has only one business owner taking charge of all the responsibilities and functions, including legal debts owed to third-party creditors, revenue and profit.

A general partnership is another type of proprietorship that typically involves two or more owners who develop a partnership agreement explaining their ownership shares, individual powers, capital contributions, profit allotment, and business operating procedures.

Lastly, a corporation is a legally established business that can possess assets and incur debt. They are described as entities legally detached from the business owners – so that even if the owners die, the company can still continue to operate legally.

The first two business structures are generally simpler than corporations, but each one has its set of advantages, disadvantages, and implications. Carefully study them and decide before proceeding.

5. Choose your Business Name

Examine the following when choosing your trucking company’s business name:

i) How you want your clients to recognise your trucking business.
ii) Memorability, and
iii) Uniqueness

The last trait is important not only because it can destroy (or boost) your branding and marketing campaigns, but you could also violate trademark rights unknowingly by the existing companies with business names that are the same or closely similar to what you want to use.

6. Register with the Government

For corporations, you are supposed to acquire a business number and register with a federal or provincial government office through articles of incorporation. These are documents that explain business type established, directors, officers, and by-laws.

The registration process for corporations can get complex, so consider consulting accountants and corporate lawyers who have a handful of experience before proceeding with it.

7. Business Number and Cost Audit Report (CRA) Number

Unlock the passage to Government Transactions: Your Business Number clarified

Have you ever wondered what makes your business stand out among all your competitors in this industry? In this complex transaction, your business number is your unique identity, your major key to unlocking doors to various government interactions. So, let’s dive into this concept of business numbers, exploring why they matter and how to get yours.

Understanding your Business Number

Your business number is a special 9-digit number assigned to your company as a legal entity. It acts like a standard identifier when transacting with the federal government for taxes, payroll, export/import, etc.

It is also a part of a 15-digit account number with the Canada Revenue Agency (CRA), from which you would have to register for the following:

• Goods and Services Tax (GST)/Harmonized Sales Tax (HST): for payroll deduction of your employees (if you plan to hire people);
• Fuel Charge (CT): to include fuel charges into your products and services. It is also mandatory for road and other carriers.
• Corporation Income Tax (RC): for corporation registration;
• Import-Export (RM): for importing in or exporting products and services internationally.
• And, other applicable CRA programs;
  
  To get your CRA account number and, automatically, your business number (if you don’t have one) – register online, by phone, mail or via fax.
  
  In case, if your physical office is in Quebec, you can file your returns ar Revenue Quebec with their forms (except if you have a selected financial institution or SLFI to process taxes for you).
  
  Registration costs and requirements can also differ across Canadian Provinces and territories, so be prepared to check out your provincial programs for the exact figures, list and process.

8. Apply for Permits, Licenses, and industry Law Requirements

Apart from the trucking business number, CRA number, and CRA fuel charge program requirements explained earlier, comply with the following regulations and industry requirements when starting your owner-operator business/ trucking company in Canada:

i) International Fuel Tax Agreement (IFTA):
 
IFTA is a cooperative agreement among 10 Canadian provinces and 48 American states that clarifies inter-jurisdictional commercial motor carriers fuel tax reporting and settlement.

Canadian trucking companies are ordered to register if they operate their commercial motor vehicles across IFTA-covered locations in Canada and the US.

ii) National Safety Code/Motor Carriers Safety Fitness Certificate Regulations

Under the National Safety Code (NSC) and in accordance with the Motor Vehicle Transport Act, federally regulated motor carriers crossing provincial or international borders must acquire a safety fitness certificate before planning to operate on Canadian roads.

iii) Canadian ELD and Hours of Service Rules

When you start your owner-operator trucking business in Canada, you should also plan your compliance with regulations on Hours of Service (HOS) and the use of Electronic Logging Devices (ELDs).

Transport Canada is the governing body for these two federal rules and provided them under the NSC and in accordance with the Motor Vehicle Transport Act to enhance road safety.

The Canadian Hours of Services rules regulate the number of hours commercial drivers can drive.

iv) Carrier Insurance
Canadian provincial government offices, such as Alverta and Manitoba, need commercial motor carriers to get insurance coverage while applying for a safety fitness certificate.

Their required insurance packages and cost of coverage can differ but they usually state these types:

• Liability is an unavoidable protection scheme that settles all injuries caused by your motor vehicles, with a $1 Million coverage for liabilities and property damage. If you’re shipping dangerous goods (as described by provincial regulations), you must have $2 Million insurance coverage (as defined by local provinces)
• Cargo insurance is optional but many freight companies prefer their partner trucking fleets to acquire one since it involves protection for the shipment that you are carrying.

v) International Registration Plan

It is a US-based coordination agreement among the states in the USA, the District of Columbia, and Canadian provinces, including Ontario.

It recognizes the commercial motor vehicles registration by other jurisdictions and splits the licensing fees as per the total distance operated in each member jurisdiction.

This scheme is best suited for commercial carriers driving through two or more IRP jurisdictions. In addition, it issues one license plate and one cab card only for every vehicle in your fleet.

9. Calculate Startup Costs and plan for Funding Resources

Trucking startup expenses can differ depending on which Canadian (and US) territories or provinces you will essentially operate in and travel through.

You can consider the following business needs when calculating your expenses for opening your own trucking company in Canada:

i) Registration, permits, and licenses. Check with your local jurisdictions to get the exact cost and requirement for everything needed in it.

ii) Commercial vehicles for your fleet. Check the average cost of the kind of motor vehicle you want to operate, and calculate it by the number of trucks you want to get upon launching your business.

Note down your trucks hauling capacities and horsepower and the range of model years you’ll be willing to consider for your business.

If you have adequate startup capital, you can even decide to get new trucks with extended warranties to lengthen your asset lifespan. If you want to save your funds, find five-to-ten year old vehicles.

Search for truck dealerships in your location and request price quotes on truck models you’re looking to get. You can also ask for further discounts for getting more than one truck in a single purchase.

10. Jumpstart your Owner-operator Trucking Business in Canada

Starting your owner-operator trucking business might seem a little overwhelming. But, it can be totally worth it.

Figure out your plan for every aspect and eventually work on your requirements. Start off slowly by taking one step at a time until you complete all of them.

Lastly, associate with reliable service and software providers.

Before we get any further, it is important to know the key responsibilities and factors that sets a company truck driver and an owner-operator apart. Below displayed table shows the major differences between the two.

Difference between a Company Truck Driver and Owner Operator Truck Driver:

Company Truck Driver	Owner Operator Truck Driver
> Drives a semi-truck provided by the company they are working with.	> Owns and operates an independent small business, which includes one or more semi-trucks they either bought or they leased from a company.
> Picks up loads they are assigned by the dispatcher.	> Has the liberty to choose their own freight – either from the spot market (if they hold their own DOT operating authority) or by leasing on with an experienced firm and taking advantage of freight choice load boards.
> The major responsibility is to pick up and deliver loads that are assigned to them.	> The major responsibilities is owning/operating a business that includes finding loads, managing expenses, making employment decisions (example: hire other truck drivers or back-office staff), hauling freight, managing the truck and also making revenue & earning decisions.
> Does not pay for fuel, truck maintenance or insurance on the truck.	> Responsible as a business owner for all expenses related to owning a truck and a trucking company.
> Is paid by the mile and sometimes receives loading/unloading pay, detention pay, performance pay, etc.	> Generates business revenue by selecting freight to haul and executing on the freight (payment terms often set by a written contract).
> Probably became a truck driver for the stability, freedom and fulfillment that come with the job.	> Probably became an owner-operator for the opportunity to own a independent business, generate revenue and have optimum flexibility

How much do 53′ Dry van Owner Operators make in Canada?

The average income of a 53′ Dry van owner-operator salary in Canada is $68,250 per year or $35 per hour.
Furthermore, the entry-level positions start at $53,660 per year and on the other hand – the most experienced workers make upto $1,98,600 per year.

Owner Operators Income as per Region

Region	Income
Nova Scotia	$81,656
Alberta	$64,125
Saskatchewan	$63,704
Ontario	$63,689
British Columbia	$62,738
Quebec	$62,718
New Brunswick	$62,643
Manitoba	$62,040

Do 53′ Dry van owner-operators in Canada get drug tested?

53′ Dry van Owner operators are not specifically described in the DOT-FMCSA drug and testing regulations. Anyhow, owner operators are generally considered to be employees of the motor carrier for whom they operate.

And, therefore they are subjected to the same drug and alcohol testing requirements as other drivers in accordance with DOT-FMCSA regulations.

How to find Loads for 53′ Dry van Owner-Operators in Canada?

There are a lot of factors to consider while finding loads on load boards for owner-operators. Some provide to specific markets or trailer types. However, some have complex and low pay structures, and some don’t vet the drivers properly. That’s why you must find a load board app that provides sufficient loads by legitimate customers that pay fair truck wages.

Finding  Heavy Equipment Truck Loads for owner-operators in Canada

Heavy hauling can sometimes be a slim margin game, however, if one thing goes wrong, you could be in the red zone, which is why It’s better to find loads that offer better margins.

Finding profitable loads immensely contributes to the monetary success for an owner-operator. Although truckers don’t make any revenue when searching for truck loads, their revenue potential is determined by who loads the trucker hauls.
Advanced digital technologies that serve truckers and digital boards have become the go-to source for many truckers while looking for loads.

Even if you have a stable client base, revenue margins for owner-operators can be small. Owner-operators who are looking to reduce the number of empty miles and increase their profits must join the best load board in Canada.

Is being an owner operator worth it?

Owner operator covers a significant part of Canada’s trucking industry. Therefor, they enjoy numerous benefits such as:

Pros of working as an owner operator in Canada:

• Choice of freight – Owner-operators can choose whether to accept or decline the freight, therefore, they have good control over their work-life balance.
• Increased Work Flexibility – Owner-operators can choose their route, truck stops, length of layover, and truck type.
• Capability to work for extended hours – Owner operators are not limited by Canadian Labor Law, unlike their equivalent parties.
• Access to higher income – Mostly, this relies on the contract details, hours worked, and the owner-operator’s business skills.

Cons of Working as an owner operator in Canada:

• High cost related to payments with license, purchase and repair of equipment.
• Boost in stress level.The owner-operator is solely responsible for making truck repairs, and delays resulting from this could lead to decrease in profit.
• Higher risk of unfavorable contracts. During these contract negotiations, owner-operators risk undertaking adverse contracts with conditions such as huge penalties imposed while switching companies.

Conclusion

In conclusion, being an owner operator in Canada is not just an occupation but it’s a way of life. It requires dedication, resilience, and the ability to navigate the unpredictable ups and downs of the road. It’s about grabbing the opportunities, handling the uncertainties, and building a successful & satisfying career in the trucking industry.

Whether you’re planning to become an owner operator or looking to improve your existing business, the information provided here serves as a valuable resource. The journey of an owner operator in Canada is a remarkable one filled with opportunities and potential for both personal and professional growth.