Flatbed or Refer in the western 13
 

I am thinking about buying a truck and starting my own company. I have been a company driver for 19 years. Am I stupid or is this normal.

I'd take the baby step to owner operator first leased to a carrier. Your plan could work if you've built an extensive contact list over the past years.

thanx B.C.

There is nothing wrong with starting your own business as long as you have the experience and money to see you through your start-up. Another is whether you are someone who is well organized. Just because someone is a good driver doesn't necessarily mean that they are a good businessman. Some people are better off staying a company driver. It is difficult to offer someone this type of advice without knowing them. You can make good money running your own authority. You can also lose your shirt. Leasing to a carrier is a good way to transition to getting your authority. If you want to get a good feel as to what it is like to run your authority, then you may want to lease to an agent based carrier such as Landstar or Jones. There are other carriers who are agent based and pay percentage. Landstar will not hold your hand. You will need to be proactive in finding your own loads, much as you would running your own authority. It is a good way to see if running your authority is for you, without having all the risk.

If you have the resources and desire to be successful and are highly motivated, then you could be successful running your own authority. There are some on this board who seem to be making it with little or no experience and plenty of money in the bank. With 19 years driving experience, you certainly know how to move freight from one point to another. Whether you can run a successful trucking business is something only you can answer. Over the years I have seen a lot of successful drivers fail as owner operators and running their authority. Many have gone back to being company drivers. Running a business is not for everyone. It takes a lot more effort to find good paying loads and do all the paperwork involved in running a business. You need to learn how to manage your time.

I have had several former owner operators who have come to work for me after not being able to make it as an owner operator. Most of them bought a truck they could not afford and little or no money to see them through difficult times. In most cases, they had a major equipment failure and didn't have the resources or credit to repair their truck. That is not a good way to become a successful owner operator. You are taking a great risk if you start out without decent credit and cash in the bank. It costs a lot of money to run a truck, whether it is as an owner operator or running your own authority. If you have been driving a truck for 19 years you should have a good nest egg by now. A good businessman takes measured risks.

you are crazy

Donny Deutch on CNBC says go for it. Life is too short to play it safe.

Now would be the time as the herd is being thinned....

Gonna be another slow year, and it's always felt more out west.

Yes you are stupid and yes it is normal. :)

Thank you GMAN I appreciate the advice. I am taking my time, and doing a lot of research. It is something I am going to do it is just a question of when. 17 years in Teamsters, #31 on a 140 driver board, 5 weeks vacation. I will admit I am not the sharpest knife in the drawer. My father told me that any time you can be your own boss, it is better than having one. Thank you all for your comments.

Really ???? I run the west and had a good 2007. Oh thats right I do not depend on borkers either... :lol:

I assumed since he was just starting out after being a company driver that he probably wouldn't have many direct contacts and would be relying heavily on brokers. Regardless of what any of our individual experiences were, 2007 overall was a slow year. Overall, rates tend to be more volatile on the west coast...individual results may vary :lol:

Notice I didn't make any recommendations, simply stated the industry-wide facts. If you've got good contacts there's never a bad time to get into the industry. If not, well I wouldn't be in a hurry to jump in this year...but that's just me.

One of the best statements I have ever seen on this forum.

Gotta agree with BIG D on this one. There is GOOD money to be made out west....but you HAVE to leave the brokers OUT of it. 8)

I have a friend who runs reefer western 5 and does REEALLY good. No brokers involed.

tootie

Again, I'm assuming the guy doesn't have contacts guaranteeing him good rates. If that were the case, he wouldn't be asking if it's a good idea. The fact is, most people when they first start are using brokers almost exclusively. I've seen nothing to indicate that his situation is any exception, in which case it's dicey.

Take a business man and you can teach him to drive a truck in a couple weeks, now take a truck driver and try to teach him to run a business, it takes alot longer.

The best way to make a small fortune in trucking is to start with a big one.

What would qualify as a small fortune...say for a 2-4 year old truck and just leasing onto a carrier? I'd like the whole number taking into account start up money and money in the bank to survive on during the startup?

Thank you all for your input.
Terry

anthony1995 had a good post, and I would also like to know a money amount I should consider for the same.

Gman and others would be better to say exact start-up costs as for licensing but I have been thinking on this for a bit now that I have been out here for about 6 months.

I have concluded that I have no idea how anyone gets into this without some type of financial backup. Right off the bat say you get a long load and you need to fill up 3 times that's about a grand.

I mean I guess it's possible, they give out advances and you could factor your first load and get the money right away but if you have to factor every load that will get costly. Also I'm not sure it's so easy to get set up with a factor. I could be wrong, but I pulled my business credit and the factor was there. They did some state filing, I forget what it was. So they might be checking credit. Don't quote me on that; I could be wrong.

But all of this implies that you know how to run credit and have a factor set up. I didn't when I got started.

The best thing would be to get a credit card with 0% interest where you can get fuel and pay for things and not have to pay the balance off each month or pay obscene interest fees.

I have not even mentioned money set aside for repairs. I think it was within the first month my fan hub motor (I forget the name) went; it was under warranty but if I had bought an older truck which is advocated here a lot and it wasn't under warranty that would have hurt.

In short I don't think you can quantify an exact figure you need to start off with but it is a business after all and you are going to need capital and the more the better.

I just looked at some 2003 trucks for $35-42,000. The price you pay will be dependent on the brand, mileage, condition and your negotiating skills.

Some carriers pay for your base plates and permits. Others will advance the money and take a fixed amount out of each settlement check. Most require you to post an escrow of from $500-1,000. Again, they will take something out of each weekly settlement until it is funded. I paid just over $1,400 for my base plates last year. A lot of carriers buy their base plates in Illinois. I would expect to pay around $2,200 if that is the case.

Most carriers require bobtail or unladen liability insurance. Rates run from about $30-60/month. Collision insurance is required by most lenders. Rates run from 2-4% of the stated value. Collision for a $40,000 truck will run approximately $80-160/month.

You will normally be required to furnish your own workers comp or an occupational accident insurance policy. It is less expensive to buy the occupational accident policy. OOIDA sells them for about $140/month to members. Workers comp is much more expensive and rates vary from state to state.

Carriers usually furnish owner operators with their fuel card. Once you are loaded they will usually load up to 30% of your money on the card for fuel. Some are loading up to 40% with the higher cost of fuel. Expect to spend from $1,200-1,800/week for fuel.

Almost all carriers require drivers and owner operators to attend orientation. Expect to spend 3-4 days at their facility. Some pay a small stipend for attending, others do not. It will likely take from 2-3 weeks for you to get your first settlement check. Once a load has been delivered you will need to submit your paperwork. The way it works with most carriers is that your paperwork must be submitted by a certain date in order to be paid at a specified day. For instance, if paperwork is submitted by Friday you may be paid on the following Friday. So you need to plan on taking care of your expenses until you receive your settlement.

I would have at a minimum $2-3,000 set aside. If everything goes right, that should get you through. One breakdown could take all of that money. A fan clutch can run from $600-1,100. A turbo for my truck costs over $1,500. If I pay a garage to install it I will spend over $2,000. A fan clutch or turbo can go out at any time. New tires can easily run over $500 on the road unless you can buy on national account. Most carriers have a national tire account but you must have money to pay for the tire. I have been charged as much as $200+ for an old used tire at a truck stop. That is why I usually keep a spare tire on my trucks.

Before carriers will lease on your truck they will perform a DOT inspection. Some have someone do it at their facility, others have an outside source. If it is done at an outside source then they will often require the owner operator to pay for the initial inspection. I would expect to pay no more than $60 for a truck inspection.

I suggest having at least $5,000 set aside. You may not need it, but this amount will allow you to have a cushion in case you have some things go wrong. At a minimum I would have at least $2-3,000. In business we plan for contingencies. We plan for the worst that can happen and hope for the best.

Merrick4 and GMAN, thank you both for your comets. I will owe you both my knowledge when I go and dive into being an O/O.
Thank You Both,
Terry

It is important when buying a truck that you not get in a rush. Take your time, check pricing in publications such as The Truck Paper and dealers. If you have cash in hand or financing in place you are in a much better position to take advantage of a good deal. If you are not mechanically inclined, consider paying someone to check the truck out for you. You can have a dyno and oil sample pulled from $150-300. I would not go to that expense until I was ready to buy the truck. If you don't want to pay a mechanic to go with you to check out the truck, you may find a garage that does DOT inspections. They should be able to give the truck a good check without breaking the bank. Most truck dealers will be able to check it out for you, as well.

You can sometimes find trucks for sale along roadways or truck stops. You never know where that good buy will be. With the economy a bit sluggish and owner operators losing their trucks you should still find some good buys around. Some dealers are still holding out for higher prices, but others are coming down to reality. When you take your time you can find a good value. Get in a hurry and you will ALWAYS pay a premium.