Quote:
Originally Posted by mudsweatngearz
Thanks for the encouragement Gman
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.
