Owning Your Own BusinessJuly 24, 2014
If you are an independent contractor, you are self employed, i.e., you own your own business and work for yourself. Many trade the safety and security of working for someone else for the freedom and control of working for themselves. Sure, some people like the security of a regular paycheck, but if recent events have taught us anything, it’s that this kind of security is an illusion. The most important ingredients for success are a mindset that (1) takes the responsibility for consequences along with the freedom, (2) takes control of the business’ money and (3) constantly looks for improvement.
- Do you have a business plan? If you want to get somewhere, it helps first to know where you are going. A business plan looks out into the future, sets goals and defines steps along the way to achievement of those goals.
- Do you have a budget? Being self employed carries with it the opportunity of making a profit and the risk of losing money. Successful independent contractors work with their spouse to develop a budget for the business, as well as a budget for the home. This will help you to set goals. Revenue is a function of miles. Miles depend on how often you go home and whether or not you turn down loads offered. Work with your spouse to achieve an agreement to balance home life needs with your business needs. Expenses are easier to control. The largest expense by far is fuel. Your budget should include goals on miles per gallon. Keep your expenses low on the road and don’t take advances against your settlements unless you have to. Stay ahead of the curve by building up some cash reserves for your business. Have you planned your budget so that you have left enough for savings? In one way trucking, your miles will not be consistent. You will have busy times and slow times. Plan for this.
- Do you know your numbers? A good accountant also will provide you with monthly profit and loss statements. You can’t be successful without this information. Profit and Loss Statements add up your revenue, your expenses and shows your profit or loss. Good business people always review these numbers to see if they are meeting budget. They also always look for categories to improve. Successful business people are always on top of their numbers. A weekly settlement statement does not show your profit or loss…it shows your cash flow.
- Have you planned for taxes? As a self employed person, you are completely responsible for saving for and paying your own taxes. This includes not only federal, state and local income taxes, but self employment taxes as well. You must file quarterly estimated taxes and if you don’t or are too far off the mark you will pay penalties and interest. One of the advantages of being self employed is that there are more deductions you can take. A good accountant is worth their weight in gold and they are deductible.
- Read and understand your agreements. People who contract with you expect you to perform what you have agreed to and you expect no less from them. Then doesn’t it make sense to know what the agreement says?
- Are you willing to work hard? I can often tell failure up front when someone says I want the freedom to turn down loads and go home every week. People find that running your own business usually results in more work than working for someone else. You’ll have to work much harder than you currently do. And you’re probably going to make a little less money – at least in the beginning. It takes planning, discipline and patience to build up a successful business. Are you really ready for that? Being self employed is about loving what you do, about working hard to build something you’re proud of, about pouring your heart and soul into something rather than giving it to someone else. Make no mistake about it: you’ll work hard, or you won’t succeed. But you’ll love every minute of it.
- Are you a self starter? No one except yourself is going to make you do the things you need to do to be successful. If you’re the kind of person who needs someone looking over your shoulder, stay at your job. Being self-employed isn’t for you.
- Do you love doing an excellent job just for its own sake? Do you look for opportunities to improve everything around you? Do you love solving problems? If not, rethink this decision. Being self-employed means putting your clients and customers before yourself. You have to be client-focused. Are you in it for you or them? If you blame everything that goes wrong on someone else instead of analyzing problems to fix them, you won’t make it.
You must be able or learn to handle time and money. Create a clear plan and envision yourself experiencing success every day of your life. You are more likely to compel yourself to do everything in your power to acquire your goals when you write them down and focus on them daily. We wish you success!
Happy Trucking, Tom