Let’s say you buy a $50,000 truck for cash....

Write offs are taxes you don’t pay, on money you didn’t make. One term I never hear anyone mention is “break even point”. Most business models use this principle. Try applying it to Trucking, with all the variables. Better to keep as much of the $50k, as possible. See if the Truck can support itself, and provide income. If not sell it. Cut your losses. A Truck loses value, the only thing that offsets the loss, is revenue made. I think, investing $25k, in a solid Index fund, putting $5k down, finance 45k, for 3-4 yrs. would be better. After 3-4 yrs. you might just have $50k in the fund. Once the moneys gone, it’s gone. That $50k Truck in 4 yrs. will be worth $12k. on trade, if you’re lucky.

 

You got no guarantee that you pick a good truck, even with all the pre buy testing. Before you get it home it can go sour.

Lease to a carrier, use their insurance and trailer. Better chance of surviving the first year..

You have to work hard and pay some dues to be a part time trucker, you don’t just buy a truck and start running like you dream about, after 45 plus years I still go places I don’t want to and work days I don’t want to but you do what you have to do.
I’ve ran a paid for truck for years, it’s nice but it is not the cure all end all way to make a living.

 

Carefully of making business decisions, using its tax deductible as part of the reasoning.
Tax deductions are great and glad toy uave them on apr 15th. Every other day of the year its just money out the bank.

 

Those Ritchie Brothers auction lots are jam packed with trucks. I would think you could get a 300k mile truck for a lot less than 50k in this market.

 

Cash is great. That's the best of all to have everything paid off.

But if you are only working part-time or let's say you're not working full-time it will be hard to replace the truck in 2 or 3 years.

Plus you also are looking at the truck you know versus the truck you don't know and in two or three years you may have sunk enough money into the truck that you have that you would rather keep doing that.

The one that you don't know could be a problematic lemon.

 

I beg to differ.

My commercial parasail business was.

My performance boat and all the hi performance motor build and drive and rigging was my next addition to the business .
Wink wink.

Also my sailboat. All my dive gear. Windsurfing and kiteboarding gear. A few trips all over the country and the islands researching future business sites.

If it floated it was a write off

 

I'd be very leary of them, more than likely owned by somebody who went belly up, who knows how many oil changes they skipped trying to save a buck.

 

Nothing wrong with leasing to a company. Especially if u never negotiated with brokers or know which lanes u wanna run.. At the end of the day , trucking is a relationship business , and id say it would be suicide to go out on ur own in these market conditions without any contract freight behind u, or any company to cover some of the bills like insurance, registration, and ifta, trailer maintenance, etc. If it was me i would lease to a company first just to get a good feel for how things work and be able to mitigate some risk to the company u lease on to, rather than taking on everything on at once. Just my 2 cents

 

Working capital is king.

It’s a nice and fuzzy feeling to have paid off equipment, but if you don’t have a sustainable income being produced by a new or totally rebuilt truck that feeling is a High that can quickly wear off .

The first time I failed at business was because I ran out of working capital even though I had no real large business bills .

I’ve seen it many times dealing with commercial renters In my dads Stripmalls.

Doesn’t take a mechanical or economic slow down to put you out of business .

You or your significant others health or an incident or accident can Rock the boat.

I’ve seen a lot of people lose inheritances , family borrowed money , grandmas savings,and cashed in investments on starting their own business.

Incurred bankruptcy and Trashed credit.

Owning a business takes a Lot of work and dedication along with endless hours and knowing when you must change your plan and up your Game or you are going to sink

A lackadaisical attitude like I have is almost a guarantee to fail.

My only advantage is my mechanical ability , tools and past business experience along with expecting pitfalls.

I have started many small businesses over the years.

The largest factor judging for me to continue a business, is the return on my Free Time I am losing to keeping it profitable.

My good buddy up in Michigan that owns a small home ran Brokerage comes to mind.

He’s been in business for 30 years and is very successful . He has a good following of shippers and O/Os out there to keep the bank rolling and his 4 employees paid.

But he is still working his Butt off after 30 years to keep the bank rolling.

Up at 5am and Gets 2 hours office work in before the employees come in. Phones never stop. Reminds me of that movie Boiler Room.

5 pm. It’s ####tail time and he sits down and knocks out all the orders for the next day until 6.

He is on speed dial constantly and if he wants a week off it’s rare he isn’t dealing with a problem on the phone that his office help couldn't work out


I know there is a Lot of Shoulda Woulda Coulda out there
I wouldn’t encourage leaving a good secure company job Right now if you don’t have to.

Luck is Timing.