In this article, we’ll explore three tips for owner operators, that you need to know for the best chance of cash flow success. These are new owner operator tips, so if you’ve been an owner operator for a while, you may already know these. With that said, let’s dive in.
1. Don’t Take Cheap Freight
The first may seem obvious at face value, but many new owner operators fall victim to taking cheap freight in an effort to build long-term relationships. While this is true and works in many cases, your customers will only see you as a cheap & trusted asset, and not something of higher value. While this can depend on the customer, it’s important to recognize your value and be paid accordingly.
Doesn’t Build Long Term Cash Flow
Taking cheap freight doesn’t help owner operators in the long run when it comes to cash flow. Cheap freight should only be seen as a quick buck, and nothing more, but there are a few more caveats to this.
If You Take Cheap Freight: Consider Fuel Costs
Another reason that you may consider avoiding cheap freight is the outside costs associated with delivering a load, such as fuel.. If you do take cheap freight, be sure to account for the mileage and the cost of fuel, especially if it’s at a great distance. Maximize your fuel discounts with a fuel card to offset any cashflow lost from taking cheap freight. One such fuel card is the OTR Fuel Card which can save you an average of $0.54/gallon and up to $500 per truck each month, and even give you exclusive benefits such as discounted lodging. Apply for the OTR Fuel Card today and save on your fuel costs.
2. Build Partnerships
The second tip that we’d argue is one of the most crucial is to build partnerships early on in your career as an owner operator. What exactly is a partnership? Who are you partnering with? Let’s talk about these questions in more depth.
What is a Partnership?
Partnerships can mean a variety of things but in our context, a partnership is partnering with freight-focused companies to provide you with discounts, exclusive perks, and lasting cash flow solutions.
Who You Should Partner With
When you’re building partnerships, it’s important to find the ones that work for your business and not against it. You should consider partnering with companies that offer discounts around services that you may need or already use frequently This can include lumper fee services, insurance brokers, or even capital lenders.
Working with OTR Solutions gives you access to our trusted partners:
When you work with OTR Solutions you instantly unlock a wide range of unique partnerships that help with every area of your business. With our unique partnerships, you can save on insurance, find business capital at a great discount, unlock low-rate payment processing, and so much more.
For a complete list of partnerships, you can access with OTR Solutions please visit our partnership page.
3. Using Cash Flow-First Solutions
And finally for our new owner operator tips, we recommend using cash flow-first solutions. These solutions drive insane value to your operating venture.
What Are Cash Flow-First Solutions?
Cash flow-first solutions are as its name suggests. They are solutions that are purposely built for carriers looking for long-term growth and security with their cash flow.
Cash Flow-First Solutions You Desperately Need
When it comes to cash flow-first solutions, we’ve mentioned that these drive great value to your owner operator ventures. With that being said, there are still a wide array of options to consider. The great thing is OTR Solutions can provide you with intentional cash flow solutions through our freight factoring program and back-office support.
1. Freight Factoring
The first cash flow-first solution you should consider is freight factoring. Freight factoring is when a factoring company purchases your invoices at a discounted rate and pays you within 24-48 hours, instead of waiting 30,60, or even 90 days to get paid. In exchange for the rate, you receive your payments quickly to increase your consistent cash flow.
OTR Solutions is a non-recourse factoring company which means that you get payment for your invoices, while we assume the majority of the risk for the customer not paying. Other factoring companies may offer recourse factoring which holds you accountable for unpaid invoices if the customer doesn’t pay.
How freight factoring can benefit new owner operators:
Freight factoring is a solution that can benefit new owner operators for many reasons Here are just a few of the most important benefits:
1. Reduce & mitigate risk for non-payments
The first benefit is that non-recourse freight factoring mitigates the risk of customer non-payments by simply selling the invoice to a factoring company. For new owner operates, this is very useful to maintain cash flow to cover expenses and put back in your business.
2. Back Office Support
Another cash flow-first solution is having a dedicated back office to do your daily administrative and operational tasks. When you opt to use a factoring company for your freight invoices, the company assumes the responsibility of administrative tasks such as paperwork, invoice follow-up, and collections. Leveraging a factoring company such as OTR Solutions gives you access to back office support without any additional fees or payments, allowing you to focus on booking more loads and managing your business.
Partner with OTR Solutions & Scale Your Trucking Companies Cash Flow
We hope that this guide helped new owner operators explore tools they need to take on their cash flow ventures. If you’d like to take advantage of these tips, reach out to OTR Solutions today and unlock the benefit of all our services including freight factoring, fuel card savings, back office support, mobile app, client portal, safety monitoring and so much more.
Thanks for reading!