Is $100,000 enough to get started in trucking?
 

Hi everyone,
This is my first post but have been lurking for a long time now. I am a 53 year old retired machinist and I am thinking about getting into trucking. Do I have enough saved to get started? I will be going to a community college in Jan of 2016 to get my CDL. I know I will need to drive OTR for a carrier for at least a year to get some experience and learn all I can. I would then like to become an owner operator possibly leasing on to a carrier at first before going full bore O/O. Any advice would be greatly appreciated

Thank you

if you don't have to don't do it.

$100,000 is more than sufficient unless you want to pay cash for a new truck. Many start with much less. I am glad to see that you plan on driving for a year before making the leap to owner operator. You may find after driving for a while that you no longer wish to own a truck. Some find that they do as well or better driving someone else truck than their own. There is more paperwork to owning. As a company driver you can step out of the truck and enjoy your home time. When you own the truck, sometimes there are things that need to be repaired or maintained on your truck. Good luck with the new career. Keep us posted as to your progress.

I really dont have to do anything. However I am tired of sitting at a desk all day or standing at a machine tool all day. I feel that I want to do something for the next 10 years of my working life. My wife makes very good money at her job and she has very good health insurance for us. We both have significant retirement assets already and own two homes outright. Vehicles are all paid for and have a sizable nest egg of cash set aside. We both are very proficient and conservative concerning money matters and a good sense of business savvy.

It seems like most all people on here tell the new guy dont do it or you will go broke. You will lose your ass, its a big mistake and so on. I dont get it, if everyone is going broke driving trucks why are there so many trucks on the road. I personally know several o/o that make a great living

Thanks for the encouragement Gman

Because for every O/O truck you see on the road there was at least one or two others that didn't make it! (probably many more!) Of all those trucks you do see how many do you think are just getting by vs making a good living? Ask you friends how many times they see/hear drivers selling a cb or tools just for a few dollars worth of fuel so they can pick up a load.
If you want to drive fine, go for it! But be prepared for a cut in pay and to spend somewhere around 7-10 days away from home and your wife. Honestly I wish I had a part time job like most 'normal' people, 40hrs a week WOW that would be nice!
Like I said if that what you what then go get it, just please do your home work and don't be part of the extremely high turnover rate.

You are welcome, mudsweatngarz. I have employed a number of former owner operators who have lost their equipment, mostly due to lack of financial assets or mismanagement. There is a high failure rate for owner operators. Most new businesses do fail, regardless of the industry. The primary reason is lack of planning and lack of working capital. From your post, you have solved the capital issue. You can still earn a decent living owning trucks. Rates are down as is freight availability. In thinking back to the crash of 2008, those of us who managed to survive had cash reserves and/or low debt. Thousands of owner operators and carriers did go bankrupt during 2008 and 2009. It was a difficult time for this industry. It is important to keep debt low starting out. It is also important to have sufficient resources to make major repairs, such as an engine overhaul, should that become necessary. I have had several former owner operators working for me who simply did not have the resources to make major repairs when the worst happened. I saved my money and paid cash for my first truck and trailer. I have since financed equipment, but paying cash is usually the best way to go. I primarily financed equipment to keep my business credit active. If I were to buy more equipment today, I would pay cash. This is not a good time to get into heavy debt.

I usually don't discourage those wanting to buy their first truck as long as they have the resources to make their business work. It is a good idea to have a good business plan when you start out. Most drivers have no idea what it costs to operate their truck. As a company driver you can get a composition book or computer and keep track of what your employer spends on various expenses, such as fuel, pm's, tires and other repairs. You may not know the revenue side of the business as a company driver, but you can track expenses. Personally, I think it is more important to know your expenses than revenue. Once you know your costs you will understand what it will cost to run your truck and the minimum amount of revenue you will need to stay afloat.

As I said, some of us still earn a decent living and others are going broke. This is a business. Many of those who do fail operate with a driver mentality rather than as a businessman. When you own the truck you are no longer a driver. You are a businessman who happens to drive a truck. Your attitude makes all the difference. As a company driver you can learn about expenses, but may also learn about freight lanes. There are some areas of the country that are dead for freight. Other areas seem to be much better. At one time freight haulers could count on certain areas as being good for freight. That is not necessarily the case these days. Chicago was once an area where you could always count on getting a load. That is not necessarily the case today. It is more hit and miss now.

You can consider your time as a company driver as a good learning experience. Not just for learning how to drive, but how to run your future business. It is sort of like learning while being paid. While you are driving you can also start checking equipment prices. It is good that you have saved $100,000, but I would not recommend you spend all of that on equipment. There are still good deals around if you have patience. You can still find good trucks in the $20,000 or less range. Some trucks you should avoid due to DEF or emissions problems. I believe in having your business buy the next truck. Depending on the carrier to whom you lease your truck, you may want to also purchase a trailer. Some mostly do drop and hook. That is something you can decide in the next year or so. There are several of us on this forum who have owned trucks for a number of years. Most of us are more than willing to share our experiences.

i will be the first to say.. i'm BLESSED to have what i have. i go out every sunday and i'm home every thursday morning/afternoon. i do well but by no means making a killing or rich. i get by. truck is paid off trailers are as well. but.. i've been in this my entire life. know the ins and outs. i know the good the bad and the ugly. by all means i don't know everything either. not trying to discourage but I'm a blunt in black and white person. that $100k will go fast. real fast. you want to pay cash for the truck and trailer fine.. mind you, depending on what you buy could be anywhere from 40-80+k in equipment. thats with out the insurance. no payments thats fine right? wrong. no write-offs. another things.. not everyone will be telling the truth in this business.

ha! whats a 40 hour week? i did a trip and a half this week (dead head back in with the holiday) and i think i logged 43 hours this week.

It seems to be useless... They do not understand...or simply already set up their mind, and just looking for the word of encouragement! So i'd just save my breath...

I really like Solo's comment but I will say this. You say you know several O/O that make a great living. Well have you seen their bank account. I live on the edge of a blue collar town but literally 10 minutes or less from a very wealthy area. Very wealthy. Further my cousin works in a bank around there too. Many, not all, seem to be doing well as they live in these huge homes and drive fancy cars but have nothing in the bank. Further, as my child has always been in private school, she gets invited to a lot of birthday parties from the friends when she was in Pre-k. If I go to the parties (not often) almost all of them send their kids to public school. They blanche when we tell them where ours go and the price. They say that's too much money.

Yet the fact is we live in a townhome and have minimal bills. So don't be so sure that just because people say they are doing well they are. And don't get me wrong, we go to birthday parties with the kids in her current school and I'm sure they are doing very well as they pay the tuition which is more than a university. But they are lawyers, doctors, dentists etc.

In my opinion be a company driver as you don't seem to need the money and enjoy seeing the country. Why go through all the hassles of being an O/O? As GMAN said many do well or better than an O/O. Put that money you have in another piece of property or something.

could not have said it better. while i know if i wanted to i could have a real expensive car, nice house, new truck and trailers.. i'd rather just pay off what i have and bank the rest for when the rainy day comes. anyone that will be real with you in this business will tell you there is more bad then good days in this business

I was a Distribution Manager in a large distribution center for 20 years and then it closed and I was left with no job in a town of 4,000 people.

I went to school at a community college for 6 weeks and got my CDL. I had never seen the inside of a truck before I started school.

I bought a truck and trailer when I got out of school and leased on to a small company and lasted 2 years there. I quit there because I didn't like someone telling me where I was going to run and for how much money. They didn't care if you made any money as long as they got there 20%. The last straw was when they gave me a load home 1700 miles that paid me .83 after they took their cut. That was when fuel was $4.00 a gallon.

I got authority in 2010 and everything has been great since then. I run 2 or 3 days a week and make way more than I ever did being leased on. Some weeks I run 4 or 5 days and some weeks I just go fishing. I keep my runs at about 300 miles so I am home everyday. I use a broker who has a load I do as a dedicated out and I have a broker who has 20 loads a day coming back so all I have to do is call them and say I need a load home.

I will disagree with everyone saying you need to be a company driver first. The one thing you need most is common sense and a company can't teach that. You will need some business experience and know how on how to handle money. I paid cash for my truck and trailer and I use cash or debit card for everything. (fuel, repairs, etc) I feel you need your truck to work for you and you not work to make a payment.

It sounds like you have plenty of cash on hand to get started the right way. I paid $32k for my first truck and had it 4 years until the motor blew and I sold it to the junk yard for $7500. I then bought a truck for $15K 3 years ago and I haven't had any major repairs on it yet. I bought my trailer for $5500 and then put another $2k in it to make everything on it good.

The thing you have to sell is yourself. Build a good relationship with your customers and brokers. I am always on time and bring donuts or pizza from time to time. The place I haul into has called the broker and told them they want only me bringing their freight to them. By them doing that they can't lower their rate like all the brokers are doing now. The load is 280 miles and pays $700, the load back is 262 miles and pays $675. I do 1-3 rounds a week depending on what they have going over. Sometimes if they have a week with with only 1 load going over and I want to do another round I will find a load on the load board going over because I know I always have a good load coming home.

I know I have done it like you are not suppose to do it but it has worked for me. I started in 2008 and wished I would of quit the office job and done this long before. There are a lot of people out there that think if you buy a truck you are going to make lots of money. Those are the people that think if their wheels are turning they are making money. You have to use a little common sense and figure out if the load is paying you enough to make the money you want and if it isn't don't haul it. When you don't have any bills you can do that.

The only hard part on starting up is finding insurance. I had to lie a little and tell them I drove a shag truck at the distribution center for 20 years.

If you have any questions and want a opinion from someone who has did it the wrong way let me know and I will pm you my phone number.

There are a lot of people living in expensive homes with several new cars in the drive or garage who live paycheck to paycheck. There are also some who live modestly have money in the bank and a comfortable lifestyle. Some who live paycheck to paycheck would lose everything if one of them lost their jobs. From their appearances you would think they were living the so called "good life." In reality they are a couple of paychecks from bankruptcy. I know people who have done well. Most don't flaunt their wealth. If they want to buy something or take a trip or help others, they have the resources to do it. I learned at a very early age that you cannot judge people or their worth by appearances.

I don't think you necessarily need to be a company driver first, in order to achieve success as an owner operator. However, there is a learning curve in this business and it is much less costly to learn on the other guy's dime. I do agree with you in that it is better to have common sense and a good head for business. A good company driver may do well as a company driver, but fail as a business owner when he buys the truck.

I will agree with you on that. I don't know how many many guys I have talked to that say I am running my tail off but not making any money. I ask them what it costs them to run a mile and they say well I'm getting 6.2mpg. I quit right there because there is no hope for them.

Regardless of the type of business you are involved, you must know your operating costs. I had a guy ask me the other day about my operating costs. I didn't hesitate to give him the figure. With fuel prices your actual operating costs can change from week to week. But, if you own a truck you need to have a close idea of what it costs to run your business. The last thing you need to do is run a truck for less than it costs to at least break even (plus some profit).