Trying to get started

[Nite Train]

I have a couple of questions is it better to lease on to a company or get your authority ?? like money wise if you lease do you usually get paid weekly or ?? and when you have authority the broker usually does it net 30 right ?? just wondering i have been reading on here for a while and i am just curious..i am wanting to get a truck and put a driver in it to drive for me i do have a job and i want to keep it so i figured i could do this just to help out a little..i am planning it through before i spend any money i have about $ 10,000 in the bank now i know i probably need more though... if anybody has done this and has some advise i would appreciate it thanks

[Sonny Pruitt]

a "driver" is going to want to work every day and get paid every week.
And home all the time
And if he doesn't want to do something
He will make sure it fails
He's going to want to be paid well and benefits and a vacation.

Good Luck

[Nite Train]

thats why i was wondering about the pay on the lease vs the broker if the lease pays weekly or even bi weekly that would work... i was also wondering on how to pay the driver by the mile or a percentage of the load ?? i have a family friend that does this she has a driver and i believe she pays him percentage she is leased with a company her driver is out on the road 4-5 days a week...i have been meaning to talk with her but she has been busy so i figured i would ask yall then talk with her and see what kind of advise i get thanks again

[jonboy]

I have a couple of questions is it better to lease on to a company or get your authority ?? like money wise if you lease do you usually get paid weekly or ?? and when you have authority the broker usually does it net 30 right ?? just wondering i have been reading on here for a while and i am just curious..i am wanting to get a truck and put a driver in it to drive for me i do have a job and i want to keep it so i figured i could do this just to help out a little..i am planning it through before i spend any money i have about $ 10,000 in the bank now i know i probably need more though... if anybody has done this and has some advise i would appreciate it thanks

Nitetrain, after obtaining my own authority and all the paperwork involved in getting set up with brokers, not to mention all the agencies involved ie. IRS, TXDot, USDot, IRP plates, State Comptroller, Business filings etc. etc. Setting up an office and load boards and the list goes on and on, which does not even include the time to check out purchase, register, and rig out equipment for the road.

When you go from a lease operator to a carrier, or as you call it, owner operator, you have ten times more administration and you have to get it right, or risk severe penalties.

I really don't believe I could have done it and held down a job. It took me three weeks around the clock to just going in Texas, and I came home to do more paperwork after I was out a week. My wife also was a tremendous help on the administration side. Some of this stuff just takes time, and one thing can be dependent on another, so there can be delays.

I know when I worked for Schneider, there was a guy that had quite a few trucks leased on to Schneider, and ironically, many of them were former Schneider drivers, so they already knew the program. I think he paid better, but I'm not sure about the benefits.

Lease operators get paid a weekly settlement, and in some cases if the fuel card is provided by the carrier, you would receive what was left after fuel, repairs, insurance. Out of that you would pay your truck payment and employee. Bear in mind you still have an "employee", which will still require workmans comp and all the regs that govern that.

Even if you become a lease operator, you still are in business, where as, if you owned your own truck that you drove, it would be somewhat simpler and you would not be responsible for a lot of stuff and that is why drivers do it. They either don't have the time, or the help to get their own authority, or are making enough money to avoid the hassle.

After going through what I've gone through, I would not run my own authority with just one truck. It is not much more work to run two or three more, the paperwork is already in place.

I would be most concerned about where I was going to get a driver, and could I endure the loss of a driver till I found another one. I have been in the position in business (multi locations), where my employees got the idea I was far enough disconnected from the business (like your outside job), that they used that against me to try to get more money refused to follow policies. I usually would have to go in and dismiss them and do the job myself till I could find a replacements.

If you really want to get your own authority, you really need some business experience, or the help of someone that has had some business experience.

jonboy

[jonboy]

I forgot to echo something Sonny said about a driver wanting to work everyday.....

If you don't lease on, you'll have to dispatch that truck and that could possibly be a conflict with your job.

[mike3fan]

If you ask me your ROI would not be enough to have the headaches of have a 1 truck with a driver in it.

[Nite Train]

What is ROI ??

[tootie04]

First of all, I would not buy a truck get my authority and put a driver in it before driving the truck myself. You will NOT get rich doing this. Finding a good driver can and will be the biggest challenge you will have. We had two trucks and hired a "good" driver.....NOT!! After a 2500.00 UNAUTHORIZED shop bill and a torn up transmission we quickly got rid of the 2nd truck!!

I do resent the comments made about drivers in general, there are good drivers out there but they are HARD to find.

I have a friend who has 2 trucks and did manage to find a good driver, this drivers could care less when he goes home, dosent care where he runs, takes care of the truck as if it was his own and stays in close communication with my friend. BUT my friend says it is a full time job almost keeping the truck moving....i dont see how you could work and keep a truck loaded at the same time.

good luck in whatever you decide to do.

tootie

[Nite Train]

i am leaning more to leasing and putting a driver in it that will eliminate alot of headache... i could see how operating off of authority would be a 24/7 job but i dont think leasing onto a carrier will be that bad...i dont want to make a killing just something to basically help out i take home 750 a week and if i could make 300-400 more in a week i am fine and if its more thats no problem either (of course this is after all other expenses including a maintenece fund for the truck)..and i know there are other ways but i have wanted to do this since i was a little kid i am driving a dump truck at my job now and i love it and i would go over the road in a heartbeat myself but i have a wife and a kid so i need to be home this is the next best thing and it will make the little extra money i need at the same time...thanks for all the help everybody !!!!

[Scoe]

What is ROI ??

Return On Investment...something that you should understand. :shock:

[Nite Train]

Well i do understand what a return on an investment is i just dont know all the abbreviations used around here all the time

[jonboy]

Nitetrain, since you are driving a dump truck on your job you have now, why not consider buying a dump truck or a tractor that pulls a dump trailer and starting your own rock hauling business, or doing the same and hiring a driver.

You can get intrastate authority much easier, and you could manage it better, because your truck would always be in close proximity. You could also do some of the driving yourself when you are off work.

This could work for you considering you are not looking for a large return on investment, and could get you started.

I know in Texas there are companies that are looking for owner operators to pull their rock trailers, and there may be some of that close to you.

If you are still determined to do an OTR lease, check out Schneiders IC department and find out what the requirement are for the tractor. No matter what company you lease to, they will do a background check and will have to approve your driver for insurance and also do a drug test. They will require a skills test and orientation before they will let you lease on. You will have to pay your driver while this is going on, so choose your candidate carefully.

Good luck,

jonboy

[tootie04]

If you are going to pull freight for .90 a mile+ fuel surge....you will not be able to afford a driver.

We had a driver in our 2nd truck and we were leased to a flatbed co. They paid percentage we did OK and most weeks made some extra money....BUT what happens when YOUR truck is in CA with a blown engine and you are looking at a 10,000 + shop bill AND have to put the driver in a hotel for at least a week???

Lots to think about other than dollar signs.

tootie

[BigDiesel]

90 cents a mile !!!!!! :shock: :shock: :shock: Double that rate and I might think about turning my key over....

[rank]

i am wanting to get a truck and put a driver in it to drive for me i do have a job and i want to keep it so i figured i could do this just to help out a little

I think you have it backwards. The job will be required to pay for the trucking operation.

First, I agree with everything that has been said.
Drivers wanting something to fail. Check.
Drivers hard to find. Check.
Dispatching truck conflicting with job. Check.
Drivers wanting to work every day. Check.

I have a buddy that did this exact thing. His father ws an auto hauler for a living (driver o/o). So my buddy bought a truck and trailer and thought he would put a driver in it and go hauling cars. This lasted about a year and he lost $50,000 by the time he got out. Drivers abandoning the truck, stealing fuel, damaging cars, not showing up for work. The list is endless.

Let's look at the numbers so you can get an idea of what you need. Based on 100,000 miles;

Fuel: $.60/mile (some guys get $.40/mile driving their own truck...but I think that's optimistic for a driver driven truck)
Driver: $.45/mile
Mait: $.05/mile
Liability + Cargo only: $.15/mile

So your costs will be $1.35/mile if you buy a truck only (no trailer). This does not include employee expenses, taxes, cost of borrowing, accounting fees, set up fees, cell phones, tickets, cargo claims, scale fees, and a million other things.

You have said you are looking for another $300-$400/week from this venture. $300 x 50 weeks = $15,000/100,000 miles = $.15/mile for profit. You'll probably owe $.03 tax on that $.15 profit so now you need $.18 profit.

So now you need $1.53/mile for all miles in order to make $15,000. Factor in 8% DH and now you're up to $1.65/loaded mile required.

[jonboy]

[quote="rank"]

Fuel: $.60/mile (some guys get $.40/mile driving their own truck...but I think that's optimistic for a driver driven truck)

Nite Train, rank is bringing up one of your biggest variable expenses that will be very difficult for you to control from your day job.

There are two reasons trucking companies govern their trucks, and one is for safety, as in, speed kills, and the other is to control fuel costs. It is true an ungoverned truck can actually get better fuel mileage with careful driving (using speed and momentum to advantage on hills), but most drivers (who are not paying the fuel bill), will drive faster than 65mph, and there is a considerable difference in fuel usage between 65-70, even with proper gearing, due to increased drag.

There is potentially a great difference in the fuel usage of two different drivers as well......

I drive my truck like I've got an egg under my foot, and I refuse to let people behind me, rush me, when I'm heavily loaded. I can consistantly get 6+, even with some hills, and upward 7's, on lighter loads. The next guy might get 5.5 on the same load. I've gotten 6.5 with 44000#, but I was being real careful and minimizing starts and stops.

This also goes back to my previous rants about lease companies paying loaded HHG miles. Not only are you driving more miles than being paid, but you are still paying the fuel on those extra miles. If you lease, get on a percentage or at least practical miles.

Also, I would never put a truck on the road without a GPS in it, because there is a great deal of fuel waste because of bad directions and searching for drops at night. Remember fuel waste is your enemy.

I used to get a kick out of Schneider every time I saw the sign that asked us to save a gallon a day, and I thought, I could save ten gallons on some days if they just put a GPS in the truck. It would pay for itself in no time, not to mention the fact, that a lot of accidents occur when drivers get lost and start making mistakes.

Bottom line is, carefully do the math on any lease and if you want to get a good driver, rig out the truck and treat him right, pay him right.

These would be minimums:

Frig
GPS
Satelite Radio
Idleaire (its cheaper than idling)

jonboy

[rank]

Frig

actually, I think he should frig the whole idea.

Can't agree more about keeping the driver happy. That is the small operator's key. You only need one good driver to keep the customer happy. Big guys need many good drivers and they don't have them so they eventually pi$$ the customer off.

[jonboy]

Well, a cooling off period would really help this situation.

I think you always have a better chance at a return on your investment, when you are working in your investment. I always put all my money into my business and beat what I could've gotten in the markets. I prefer real estate (only if I'm using it for business), so I can't imagine being as far removed from my money as Nite Train is supposing.

Nite Train, I wish you well, but if you only have about 10,000, you'll probably loose it. I'm in 20,000 deeper than I thought I'd be and I had not choice. Thank God, I had options.

jonboy

[Mandilon]

Nite Train

SBA literature recommends to 'carefully' estimate your total start-up business cost.

They recommend DOUBELING your estimated start-up cost to come to a MORE realistic ACCTUAL cost.

Besides ROI, look-up 'Economies of Scale.'

Good luck in your endeavors.

[LexAtlanta]

Wow....lots of good information being put out by everyone. First off, $10,000 is WAY too little cash to start anything. I think you will go through that little bit of money really fast. Once I saved up $50,000 or so then I would consider starting my business. I work for a used truck company and I know that our finance company looks for between 20% and 30% down on a truck that is non owner driven. If you buy a $40,000 truck...there goes $8,000 of your $10,000. Rig the truck out and your money is gone. Now you have a truck and no reserve for anything.

I work with a man who ran a truck like you want to for 2 years. He went through 10 drivers in 24 months. It is a good thing he has a CDL A so he could go get the truck and trailer and drive it.

Starting a trucking company is not as easy as it might look. There are a number of variables that must be accounted for. the biggest one is....not fuel.....but the human driver! A good driver will be difficult to find. Everything you will do takes money....and $10K just isn't enough. Good luck with whatever you do and keep us posted.