Ready, Set,....Fail

Just like any other facet of life, really. Those who can manage their money wisely do well and those who can't make and stick to a budget fail. I've never understood why anyone who can't manage their own personal finances thinks they can own/operate a business of ANY kind, not just in trucking.

 

I can somewhat the heavy reliance on factoring IF you're using the low (1.5% or less) companies, anything higher than that I just don't see how they can give that much money away. Just a vicious cycle for them really and once you get into it it can be hard to break out of it. Easiest to just start out with a nice sized rainy day fund and maintain a nice account balance there.

 

The way I see it having that money in your hands for an extra 30-60 days at 1.5% enables you to leverage far more than the sum you're giving away. When these people get behind the 8 ball with creditors at 10-15% there's just nor a lot of ways to come back from that, margins are too small.

 

A lot get behind the so called 8 ball with spending $ on JUNK. Then when they need $ for legit truck items its CREDIT CARD time.

Just bought a truck & trailer at an auction, guy that had it had every toy known to man , but bank repo'd the unit.

He had been pulling good $ freight , just poor $ management.

I offered him a job driving his old truck.

 

Offering him a job--was a classy thing to do! Good for you!

 

I quoted this because it bears mentioning twice. You hit the nail on the head with your comment about extending personal financial success into business financial success.

Factoring at any rate is just like any other cost of doing business. If you use it as one of many levers to pull when managing cash flow and your time spent doing collections, it adds a lot of value. When it becomes a lifeline, it's a symptom of bigger problems, not necessarily the problem.

 

May be new to trucking, but not new to life and I suspect the majority of "rules to live by" apply to trucking. It is really amazing how many people have all these worthless toys and no savings at all. Backyards loaded with 4 wheelers, bass boats, etc. and $3000 rim & tire sets on the daily drivers meanwhile carrying 10-18% credit card balances.

If you want to succeed longer term, you gotta put off at least some of that instant gratification no-payments-till-January on the 60" flat screen type of stuff!

Hopefully the poor guy is not behind the 8 ball on all the other toys too. Or more important his house.