No experience but getting Authority

i've never seen anyone make good money with a hopper. leave that for the farm boys who truck part time

 

Anyone who has read RedForeman's posts should understand why those of us who have been at this for a number of years push new people to have a good cash reserve before starting out. Some get lucky and are able to start with little and make it long enough to put money back for those unexpected expenses. Others are out of business because they don't have the resources to make needed repairs. They started without a plan for their new business and haven't a clue as to what to do when something goes awry. They only planned for the good things to happen.

 

G/MAN you are exactly right. I've read your many great posts suggesting caution and capital. I've done it twice with more credit than capital and have one success and one failure.

As I look at going owner/operator with my authority, my 50% success rate doesn't bring great feelings of success and excitement. I know I have what it takes to do it but even then there is no guarantee. With experience, research and the tools to succeed I have no illusions as to the work involved. I also know the cost of failure. I try to set realist goals and expectations. I figure my chance of success at about 70%. To me that is a manageable only if I have an exit strategy to protect what personal assets I have.

I’m all for living the “Great American Dream” but it scares me to death to read some of the posts. If you’ve been driving for less than a year, you’re thinking about becoming an owner/operator, leased or with your authority and your question is how much money can I make…………..My answer, with all due respect is none.

I’d like to see several owner/operators weigh in on why they make that choice. I think all of us put some weight on the earning potential, but I’m willing to bet that there are many more factors that motivate all of us much more than money. IMHO, nobody that understands business goes into business just for the money. It’s a lot simpler to let someone else take the risks and you reap the rewards in the form of a job. If you don’t understand that you shouldn’t even consider going into business. Delayed gratification is as much a part of a business as earning potential, especially in the beginning.

 

I appreciate it, BigJohn. There are some mis-perceptions about those who are owner operators. One is that not all who profess to being an owner operator are owners. They are lease operators. Regardless of what some who push these programs suggest, there is a difference between being an owner operator and a lease operator. I won't rehash what has been written on other threads, but most lease operators pay out more than they can afford on a truck they will usually never own. They also must keep the truck with the carrier until they decide to leave the company or pay the truck off.

Another is that all owner operators make more than company drivers. That is also not always true. Some may actually make less. At one time I felt that everyone should attend college and earn a degree. I have since changed my thinking. Some should, but others would do much better by learning a vocation. Just like earning a college degree, not everyone is cut out to run their own business. Some make great company drivers, but poor owner operators. Some make good owner operators, but have difficulty running their own authority. I think the trick is to know your personal strengths and weaknesses. There is no shame in staying a company driver. It may surprise many of you, especially the new drivers, but there are segments of this industry where company drivers can earn over $120,000/year. Most won't be able to earn this much. Most will settle down at around $40-55,000/year.

My reasoning for owning trucks is that I prefer being in business for myself. I have always made more money in my own business than working for someone else. It also offers me flexibility to run when I want and stay home if I so choose. Keep in mind that I don't have big equipment payments. If I did have the big payments, I would have little choice but to run all the time. I think that people have different reasons for wanting to become an owner operator or get their authority. I think some are infatuated with being a cowboy, roaming the open west. Others like to tell others that they are an owner operator. Some are genuinely good at running their own truck or authority.

I also think that many who want to become an owner operator or get their own authority underestimate the time and money required to get started and keep the wheels running. It is easy to throw something on the truck and keep running. It may not be so easy to keep the wheels running while making a profit. Freight is plentiful right now. But, rates are still soft in some areas, such as Chicago. Historically, Chicago has usually had better than average rates. That isn't the case right now. As we get into fall, freight usually drops off. That is when it becomes more of a challenge to keep your truck moving and to get decent rates. Last week I had the best revenue week than I have had in 3 years. I should be very optimistic, but I see signs that the economy is weaker than what the media and politicians are telling us.

Most people who buy or lease a truck don't prepare for the worst. They expect the economy to do well year around and don't account or prepare for the inevitable slow down that will come. This another reason so many fail. When the economy is soft, it becomes even more unpredictable.

It seems that when you own a truck there is always something that needs to be checked, tweaked or repaired. When you go home there are things that need to be done to the truck. If you are a company driver you don't need to worry about it. You park the truck and let the owner worry about getting the repairs done.

I do agree with you that there are other reasons than money or profit which motivates drivers to go out and lease or buy their own truck. Sometimes, it isn't always in their best interest.

 

Our little Saturday morning breakfast club of O/O's in the area is growing. Someone that has been doing this for over 25 years today told a company driver looking to buy a truck that if you have to use a factoring company when you start, you don't have enough money.

 

Well, it is not a full-time gig and this week was a lesson that I could afford. Many of these guys that buy these overpriced trailers can’t afford to have the week I just had. In fairness, two of the days wasted on shopping.
Many guys make money with hoppers. It is about area that you are in and being able to sit or have something else to pull. So many of these guys refuse to do anything else. Kinda like some flatbed guys that refuse to pull a van and have periods of cheap or no freight.
But in my area the money is great during harvest. I can net $4-5K/week during harvest. Long days but I can make as much in 6-weeks as many make in 6-months.
Speaking of working a hopper. Here is a picture of pulling beans off a farm. Fun days.
View attachment 11584

 

With my first truck, the cowboy roaming the West was the biggest part of the decision and planning. I thought all I had to do was look good, keep the truck loaded and drive. You can read about how well that worked in this thread and there’s a lot more to the story than I shared:

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/146942-how-to-become-an-owner-operator.html

I have looked at lease/purchases. If you can find one where you end up owning the truck, they certainly take a lot of the day-to-day risk and management out of the equation. They cover many things that a driver without years of experience and good business sense will fail at. I believe there are a few that a savvy driver might be able to make work out. The earning potential just isn’t there, so more miles and less home time is the only way to survive, but it could be a means to an end. The fact that they take my control and freedom away, make them have no appeal to me. I think the most important thing to remember is that these lease/purchases are about making money for the company and not you. In addition, you will pay a premium price for the truck. You will pay dearly in blood, sweat, tears and cash to be successful this way.

The control, freedom and potential are what make me tick. However, the fact that the kids are grown and the debt is low make me more able to tolerate the financial risk involved. I’ve spent a number of years in service work and made wages equal to what I could as a driver over half that time. The financial risk and family life were much better than being an owner/operator. I share all this because I believe that while few understand a business and the work involved, even fewer look at the many other risks and sacrifices necessary to be successful.

On the subject of good driving jobs, I have done a lot of research. I’m personally thinking about taking a crude oil driving job in the oilfields. This is a boom or bust industry and the work is harder than OTR. It appears to me that $70,000 - $90,000 is realistic, with lots of long days, until it goes bust.

I’m thinking about doing this for 2 - 3 years and paying off my house (17 years left). I could then use my house to borrow the money at a lower interest rate. This would leave me owing about $10,000 less than I do now (15 years). I could pay cash for equipment, authority, one year of insurance and my repair/operating capital. Making the equivalent of a truck and trailer payment (3X house payment) on the house would pay it off quickly (40 months). If the money wasn’t there that month, I could make the scheduled house payment. Having a first year with no payments and cash for the unexpected…………priceless. Of course I could pay my house off and take it easy but that would be boring. Hopefully as we share our ideas and experiences, some of the drivers wanting to become owner/operators will see how tough it is and realize with some planning they can raise their odds of success considerably.

I’ve put together several plans to get back in the business myself. Not a one includes rushing out to get the equipment and getting on the road. At 54 the clock is ticking, but I haven’t had a single success in life that didn’t include a well thought out plan. Too bad I spent almost half of those years not realizing the importance of planning. I like the plan in that last paragraph the best of all. If it works, my business is up and running with little chance of failure. I owe less than I did when I started the plan and it pays off one year later. The cost was 2 - 3 years of hard work. If it doesn’t work, I end up with my house paid down some and in a better position to make a new plan. And none of this takes into account any money from liquidation of the business should I reach that point without success.

The things I have learned about good planning with goals in mind:

1) Things seldom turn out like planned,
2) It always gets you closer to where you want to be,
3) Even a foiled plan makes more progress than rushing in and
4) You can always evaluate, revise and stay on course.

Well, enough with the John life lessons. I’ve had too much time on my hands the past month. I just hope that someone gets something from my rambling about planning and the sharing of some of my plans.

 

Figure it's time to bump this thread back up with an update. It started out as a short one and an hour later, wow. I didn't know I had it in me LOL.

I'm still running my plan and, according to that, my last day on my day job was Friday the 1st. The relief of pressure has freed me up to be a lot more effective at running this business. The day job project I've just walked away from has been running for almost three years. Waking up on Saturday morning knowing that there would not be another week of that to look forward to was huge. Right now I'm more enthusiastic about doing this than I was the day we filed for our authority or bought the truck. I think the high point last week was actually having a new broker call on me to get me signed up and take a decent rate to run a load home. Nice.

Anyway, I'm giving myself the next 2-3 weeks to tighten up my audit readiness and get my accounting to a better level of perfection. I met with my CPA today and ran my game plan past him and got a thumbs up. He's offered to help me set up the books to make it easier on the both of us. Of course he will.. he charges by the hour LOL.

The next step will be to go out on the truck with my son for a couple weeks and get my driving up to par to pass the DMV road test and have my CDL fully restored after almost 20 years. After that I'll start looking for another truck like the first one and someone to drive it. I'm estimating having that going by the end of August at the earliest. There's a lot of moving parts and I'm not in a rush.

Since the last of the tire replacements last month we've had a reasonably trouble free run. With the holiday weekends, it gets awkward trying to route the truck back home. Over the 4th, things just fell into place. The first highlight was the weekend before. I got a load of tomatoes out of FL going up to Detroit for a Sunday unload. Remembering from a while back that there is no good rates out of there (sandbagged the rate up to cover some DH, also seeing the same signs on the load boards) I had him reposition just north of Dayton, OH. for Monday morning. By 8am I had locked in a good load heading southwest. Made a loop thru Dallas and back into Atlanta for an empty truck on Thursday night. We had noticed one of the new drive tires had been wearing funny and was losing some air, but only when under a heavy load. Friday morning we showed up at the local tire store when they opened. We were in and out of there with a valve stem repair in an hour with a $45 bill. On the way over there, I was following in my pickup and noticed a tail lamp on the tractor was out. The QT TS a few exits down had them for $6 so I ran over and grabbed a couple and installed one before hooking the trailer back up.

No big plans for the holiday weekend, so Sunday afternoon I went over to install those cab airbags that never made it out of the toolbox. While I was in there I discovered that the lever arm for the pressure valve had fallen off and dropped down. Consequently the bags were running full pressure all the time. No #### wonder the ride was so rough on all but smooth highways. I rigged it with some cable ties, and then later Tuesday morning picked up a replacement at the FL dealer and installed it.

After getting the new bags in under the cab, I spent a while inside the trailer tacking the reefer chute back to the ceiling in a few spots. Which leads to another great story. Friday afternoon just in time to beat closing time I'd made a rush hour suicide run down to the other Carrier dealer on the southside to get some pins. I told the parts guy I needed about 20 but that depended on how they were packaged and how much they were. He goes in the back and comes up with a 20lb box of them. Drops a handful on the counter and counts off 20 and starts trying to get them into a little ziplock bag. After a minute of pins bouncing all over, he just holds the bag open at the edge of the counter and sweeps them in until the bags full LOL. When I asked him how much, he just shook his head and said bring the trailer back next time for service. Mind you, we've never been to this shop before.

I decided to press my luck and ask for an operator manual for my reefer, even offering to order and prepay if needed. The other parts guy found a pdf of it and just emailed it to me. This parts dept just won my business for reefer service. If their salesman is as good as the parts guys, they may have me coming back in a few weeks for an APU.

So the weekend wrapped up pretty good and we've had a profitable short week this week. This morning I was combing the loadboards trying to decide what crappy destination to head to out of Houston and decided to give my favorite broker a call out of the blue. As luck would have it, he hooked me up with a good one into an area fat with good freight and I immediately booked a return trip home for tomorrow too. Sometimes even a blind squirrel gets a nut LOL.

Two funny notes to wrap it up for tonight:

1. All you van guys are yukking it up over me having to tack my chute up and do the extra stuff you just get to do with a reefer. Guess what? Take a break in my truck a/c while the reefer runs down to about 60º and it's not too bad working in there an hour or two on a 95º day LOL.

2. I asked my son to let me know how the ride was after unfking the cab suspension control and putting in the new bags. Turns out he had to pull off three times that night because he was sure he'd had a tire go flat due to the difference in the ride.

 

Thats a pretty awesome run of luck there Foreman!



Also helps when you get good parts places that go the extra mile to earn your business (anyone in this economic climate who is not on their knees trying to please a customer is a moron, IMO). Good freight, good broker, easy and effective repairs.....

You mind emailing me some of that?

 

Well, my little trucking venture is growing. Bought a flatbed today. Blinded by rates I guess. I was bit ching about the heat and having to open and close trailer doors yesterday. Do they have any no-tarp, no-strap, no-chain loads? Maybe like a McD's drive-thru. Pull-up, they drop a load of steel on the back, sign the bills and I am on my way.
But more exciting than my sudden loss of sanity is that in the next couple weeks I can call myself a carrier and not feel silly saying it. Getting my first O/O on board. This is going to be for a farmer that has a guy with 15-years farming experience and wants to keep him on year round. So I put a deposit on an '05 Int that should be in by the end of the month that if it looks good the farmer will buy. He will pull my hopper and likely average about 26-weeks a year pulling for me.
This is a good first one as we are all figuring this out together and if I am off fees here or there it is not going to be an issue. Farmer does not even care if he can make a profit on this just cover the overhead on the truck and some of the driver expenses.
So let's just say that I am glad I have the unlimited plan on my phone this week.
Lot's of other things going on but getting late and want to be rolling early tomorrow.
Cheers