I didn't make it, but I want other startups to learn from my mistakes.

Meaning the poster cant be no worse of a boss than the others.

 

@LoJackDatHo Probably meant leasing on guys and making money off them. The problem with that is OP is already broke and that would require cash and lots of it to cover payroll, fuel, insurance and several lousy leased owner operators who can't afford to fix a flat tire if they get one and need to borrow $20,000 for an inframe. Yeah, great idea...

 

Factoring doesn't take the risk out of not getting paid. It's only a loan.

 

Right, I ask how they handle that and received a open ended answer. From what I gathered the front the money but you are still responsible for billing and having them get paid from your client. I asked what the time frame was and he said if it gets 45 days out they will help get it pushed. ???

 

My .02. Why factor? Why give your money away? Try to work with customers and brokers that pay in 30 days or less. My longest paying customer is 21 days. It's hard starting out, I get that, been there, but once you start factoring and relying on fuel advances to keep you moving, you will never get on your feet. A lot of operators start out thinking that they will factor and advance till they can get off of it. If two trucks are paid for, use one of them for capital at the bank for a line of credit, that way you don't have to rely on what brokers offer what and you can be free to run YOUR BUSINESS. You can get fuel cards on your own too if you like with decent discounts. Factoring can get confusing bc most have a hold back till invoice is paid. Makes it a ###### trying to keep things straight. Then if they don't get paid they come back on you, unless it's non recourse. Then the percentage is higher. Just food for thought

 

Your right. Been there done that before. Had 5 trucks leased on and well......it lasted 8 months. I fired them all. Just bc you bought a truck doesn't mean you are an O/O running your own business.

 

@rollin coal ..sounds like we think alike on a lot of things. I notice we both pop up on similar posts LOL

 

I have heard several of these I didn't make it as a O/O. Like dozens, maybe hundreds IDK. A common theme to them all is they all bought a 'lemon' for a truck.

I certainly do appreciate the OP's heart felt honesty, and certainly do concur that 3 months in the shop is indeed a indicator of a serious truck issue.

The common thread of 'lemon truck' is something I wish more prospective truck owners would not ignore. When buying a used truck, (or equipment, or, car, motorcycle, boat, ect.) you are always buying somebody else's problem. It is best to figure out what that problem is before making a purchase. In the case of the truck, that problem may or may not have not been the truck. It may have been bad business management. However, that poor management might have lead to poor maintenance with the truck. It is always a situation that you have to evaluate before you fall in love with the truck or your title as 'business owner.'

For new equipment of any kind, it has always been a rule of thumb that you will pay as much in maintenance over the working life of that equipment as you paid for the new price. That still kind of holds true. The problem is many don't see that or realize that. The used truck a prospective O/O might buy, might be just due for a lump sum of that maintenance money that it is owed to it just after purchase.

Another example, especially in the world of the fleece, is the fleecer or O/O wrongly assumes that that money put away for maintenance is actual his money. The reasoning is, if he didn't count that is his money he would have earned nothing for all his effort and work, and that is a hard pill to swallow especially if you got into being a O/O for the wrong reasons.

 

If you have to factor you haven't got enough money yet.

You're going to spend at least $20k in unplanned repairs and lose at least a month in your first year. If you can't handle that you haven't got enough money yet.

If you can't afford to have your truck towed back home to your trusted mechanic you haven't got enough money yet.

 

You right.15-20k to be leased on and 20-30 to play with your own MC. IMHO. It takes a month or two of unpaid invoices before they start sending you checks. That's 15 -20 k of money you're waiting for while making payments, fueling and living life. And the money is not coming all at once either.