Opening up a trucking company. Limited experience. What could go wrong?

I am fully aware of this. That's the tax burden. But you are ignoring the real expense. The benefits burden. Good health insurance and matching 401k is not cheap. And workmans comp. By doing 1099 you are easily saving 25 grand per driver. It's certainly not a choice you are making for their benefit. Let's not pretend it is.

 

Occ/acc is not even close to the same coverage an employer is required to carry. Nor does it offer the employee the same level of benefits.

 

'Opinions are like ########'

I really dig what you're doing, if I were you i'd ask the friend for a partnership and add on more trucks to his fleet. He's already got the MC# and brokers to deal with aligned, seems like he knows what he's doing and your financial / business experience will help him while he's helping you.

If you continue to increase the fleet on your own eventually after 3-5 trucks you'll have to start paying W2 to avoid a mess on the accounting side. You don't want to become one of the White Volvo carriers from Chicago that change names/dot# every other year.

Once you do this you'll have to worry about workman's comp issues, which last I received a quote for was 10k per driver per year (ILLINOIS, #### this state)

Also brush up on safety regulations, even if you hire someone to be a "safety director" as owner of the company you should really be on top of that

 

True, but for the state of Illinois that's all I need to offer my contractors

1099 also - please don't bash me

 

Honestly I'm surprised is only 10k up there. Down here in a very employer friendly state the cheapest i can get is almost 9k.

 

Last I received a quote was about 2010 - probably closer to 13-15k now. I was planning on opening up a small shop just for the postal address in Iowa to benefit from their regulations

 

It's illegal. If you are ok operating illegally to save money that's fine by me, but you forever give up the right to complain about freight rates.

These artificially low operating costs is why freight rates are so low. It's no different than a guy running with no truck insurance or on bald tires and bad brakes.

 

I have been on both sides of the 1099. first was miserable,.. but the owner was a tyrant.
The second is the same carrier I have my truck leased on with now. Being 1099 allowed me to learn itemization, deductions etc where I would never have understood those things with W2. It put me that much more ahead when I finally bought my own truck.

Many here immediately bash anything said when it comes to paying drivers on 1099. Many like me prefer to be paid 1099 as long as the compensation works out.

I agree,.. $.45 is low and you get what you pay for. In 2012 I was started at $.52 with a bump to $.55 after 3 months and then $.62 after 1 yr. I grossed $78k my first year. I was also given weekly bonuses for watching my fuel mileage. Also gave me $2500 Christmas bonus my first year.

Hurst

 

I'm still trying to figure out who gets 300k out of a set of tires?