Buying multiple trucks

I think you need to get some more experience under your belt before thinking this large. Start with one truck and you'll see all the costs and expenses it takes to run it. If everything goes well after a couple years then add another. Biggest mistake a business can make is expanding too quickly .

 

x2!!

 

8.6% return is actually really good. The guy I used to work for had 150 trucks in his fleet and I think his return was around 3%. Mind you, his fleet ran millions of miles every year.

So, for sheets & giggles let's say a truck produces $200,000 in revenue annually. At 8.6% return, that's $17,200 per year or $1,433 per month.

 

Yeah that's about right, I don't look at monthly revenue into the pocket but annual.

3% isn't bad but a bunch of us are running under 9, most of us are about 8 because we run everything tight.

What gets me is people like the OP, who is thinking that it is so easy, when it isn't. I was going to go to the Oil Fields, I was out in ND and looking at Vac equipment, which trucks (which I did buy one and later sold it at a loss) and other stuff to get started, I had drivers who I could pull out of the fleet to go but then the bottom dropped out so fast, I was caught off guard.

 

One other thing is credit, the OP thinks that he will buy trucks with cash, he needs to really think about this because he depletes his running revenue to make purchase and something happens like three trucks going down and cost to fix exceeds the cost of one truck, then he won't expand.

AND if he goes to a bank or lender, they will look at the time line of expansion and may say that he is overextended.

 

You would have to be running everything tight to obtain that rate of return, especially in this industry.

My former boss had a staff of around 30 office related folks in 3 different locations running everything for him.

He spends a lot of time on "business trips" which includes annual trips to the Bahamas, Hawaii, etc. As is in most businesses, the higher the revenue gross, the lower margins of returns. But hey, I could live comfortably on 3% of 30 million a year revenue

 

I've had guys try and tell me that in order to be "profitable" running a fleet, you have to have at least 5 trucks running full-time. I never did buy it and I still don't.

 

You can do it with two, if you do it right but hell I seen so many 5 to 10 truck fleets go belly up, and people think that this is all just sitting back and making money, it ain't.

 

Yeah, if you're running one of those trucks at the same time

 

The guys are right. You need to run your own truck and then assess things from there.

I think the most important thing for you to look at is to realize that more trucks really doesn't equal more Revenue all the time. It actually can be the opposite.

This is a capital-intensive business that you really need a lot of money to get off of the ground, let alone expand. You really need to have a lot of money and be ready when it's time to expand.

Go back and search on this site cost of becoming an owner operator.

When you do that you will see guys that said they had this much money and I bought a truck and this happened and this happened and I needed this and I needed that and when you see all of that hopefully you'll see the capitalization side of this.

Every wonder why rich people seemingly always get richer irregardless even of what business there in? It's because they have so much money they can't fail. Trucking is the opposite. It requires so much overhead and Reserve that when things happen it can just strangle you until you just give up and literally have no more money to continue.

I agree with the person that said you should consider buying real estate. Even if you had a really good plan and became a very successful owner operator, I would say take that money and buy real estate.

Especially if you are a younger person that will make you a very nice retirement and eventually change careers and never have to worry about trucking again.